It’s no secret that shareholders of Wi-LAN Inc. (TSX: WIN.TO) are looking at the company’s patent suit against eight companies, including Alcatel-Lucent USA Inc., Ericsson Inc., Sony Ericsson Mobile Communications, HTC America Inc. and LG Electronics and other related companies, as a potential payday and while that trial isn’t expected to begin until April 2013 the company recently picked up a significant victory in a separate legal matter. On June 11, 2012 WIN.TO, together with 01 Communique Laboratory Inc., announced they had entered into a Settlement and Patent License Agreement with Bomgar Corporation, settling all litigation among the parties.
The settlement carries added significance due to the disappointing revenue losses experienced by WIN.TO during the second quarter. While a confidentiality clause prohibited the disclosure of the agreed financial terms of the settlement investors are beginning to eye that April patent suit, a suit that some say could be settled in the range of $150-$200 million over a five- to six-year licensing term.
Shares of WIN.TO, a leading technology innovation and licensing company, have been relatively stable, currently moving around the 5.27 level, a mark that puts them just ahead of their 50-day moving average of 5.24 but still trailing their 200-day moving average of 5.67. As the April date draws nearer that share price can be expected to move rapidly as investors place their bets but with the recent settlement there will likely be plenty of investors putting their money on WIN.TO.
Of course that’s not to say that the two issues are anything alike but rather that WIN.TO is capable of protecting their partners intellectual property. In the case of 01 Communique, WIN.TO’s Gladios Division had day-to-day responsibility for developing the licensing program as per the terms of the agreement and following the announcement of the settlement Andrew Cheung , President and CEO, 01 Communique stated “We are very pleased with the results that were achieved by working closely with WiLAN’s Gladios division, which is a testimony to the professionalism and quality of their team. We look forward to continued success and to working closely with the Gladios team on additional programs.”
The importance of this settlement is that it shows other patent owners that WIN.TO’s Gladios partnership model has weight. In the words of Michael Vladescu, COO of WIN.TO, “I am confident that the Gladios program will continue to grow and look forward to reaping rewards for many patent owners in the future.”
Whether or not the patent suit filed against Alcatel-Lucent USA Inc., Ericsson Inc., Exedea Inc., HTC America, Inc., HTC Corporation, Sony Mobile Communications (USA) Inc., Sony Mobile Communications AB and Telefonaktiebolaget LM Ericsson works out the way WIN.TO hopes is yet to be seen but they did get a boost back in May when the U.S. District Court for Eastern Texas, where the patent infringement suit was filed, rejected all arguments made in support of the defendants’ motion for a partial summary judgment.
This could give legs to WIN.TO’s claims that these companies infringe on one of its patents related to CDMA (code division multiple access) and HSPA (high-speed packet access) and another related to Wi-Fi and LTE (long-term evolution). This is the belief expressed by Jim Skippen, President & CEO when he stated, “We believe that the constructions enable WiLAN to demonstrate infringement of the patents by the defendants’ 3G HSPA base station and handset products. We remain very confident of our position in this case.”
As a company WIN.TO has licensed its intellectual property to over 255 companies worldwide with inventions in their portfolio being licensed by companies that manufacture or sell a wide range of communication and consumer electronics products including 3G and 4G handsets, Wi-Fi-enabled laptops, Wi-Fi and broadband routers, xDSL infrastructure equipment, cellular base stations and digital television receivers.