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Technology Stocks : Ericsson overlook? -- Ignore unavailable to you. Want to Upgrade?

To: Raymond who wrote (1460)	4/4/1998 2:57:00 PM
From: Caxton Rhodes	Respond to of 5390

Raymond - This from the Q's annual report. Most believe that these types of lawsuits are intended to be used as bargaining chips to reduce royalty payments to Qualcomm. I believe that ericy will settle with the q and end up with a license this year. If not, they risk falling too far behind and I doubt seriously if they can proceed with any form of cdma without the Q's IPRs. The meetings of ETSI on the April 8th to discuss the cdma IPR issues should be interesting. Qualcomm has stated publicly on countless occasions that they will not cut deals with anyone regarding the royalty rates. Caxton ITEM 3. LEGAL PROCEEDINGS On September 23, 1996, Ericsson Inc. and Telefonaktiebolaget LM Ericsson ("Ericsson") filed suit against the Company in the U.S. District Court for the Eastern District of Texas, Civil Action No. 2-96CV183. This case has been set for trial in October 1998. On December 17, 1996, Ericsson also filed suit against QPE in the U.S. District Court for the Northern District of Texas, Civil Action No. 3-96CV3373P. This latter case has been set for trial in mid-1999. Both complaints allege that various elements of the Company's CDMA equipment system and components infringe one or more patents owned by Ericsson. In December 1996, QUALCOMM filed a countersuit in the U.S. District Court for the Southern District of California. The complaint alleges unfair competition by Ericsson based on a pattern of conduct intended to impede the acceptance and commercial deployment of QUALCOMM's CDMA technology. The complaint also charges that Ericsson's patent infringement claims against the Company violate a 1989 agreement between the companies. Finally, the lawsuit seeks a judicial declaration that certain of Ericsson's patents are not infringed by QUALCOMM and are invalid. On April 9, 1997, the suit against Ericsson in the U.S. District Court for the Southern District of California was dismissed so that all of QUALCOMM's claims in that case can be litigated in the action filed by Ericsson in the U.S. District Court for the 27 Eastern District of Texas. On September 10, 1996, OKI America, Inc. ("OKI") filed a complaint in the United States District Court for the Northern District of California, Civil Action No. C-96=20747 RMW (EAI), against Ericsson seeking a judicial declaration that certain of OKI's CDMA subscriber products do not infringe nine patents of Ericsson and that such patents are invalid. The nine patents are among the eleven patents at issue in the litigation between the Company and Ericsson. In December 1996, the Company filed a motion to intervene as co-plaintiff with OKI in the OKI-Ericsson case. The court granted the Company's motion on August 25, 1997. This case has not yet been set for trial. Although there can be no assurances that an unfavorable outcome would not have a material adverse effect on the Company's results of operations, liquidity or financial position, the Company believes the named Ericsson patents are not required to produce IS-95 compliant systems and that Ericsson's claims are without merit.