IMO, whether or not the forthcoming settlement with ArcSoft will actually be good for shareholders really comes down to whether or not royalties will be included in the final settlement agreement.
I understand that we will be told very little if anything at all, however we should at least see a PR once it is finalized (since this would be the first Nunchi license) and that PR could contain something stating that it is a royalty-bearing agreement (if it is).
I don't need to know how much or on which or how many products. I don't need any earnings guidelines. I would just like to hear that we will be getting at least a tiny little piece of what we already know will be a growing market (IoT) just like Pat Nunnally suggested several years ago when the Nunchi concept was first introduced.
If Handal/EDIG settled for a one-time license fee, it is almost certainly for too small of an amount given the growing market. I know that a one-time (past/present/future) fee is easier to negotiate since ArcSoft doesn't then have to track specific sales numbers over the next several years and cut quarterly checks (or whatever) to EDIG. But if Handal/EDIG did NOT insist upon a royalty component, then they will have placed the bar way too low and set up a bad precedent for other potential infringers in the future.
Thus we should have what I think will be a key indicator soon about whether Nunchi can finally produce some value for us. On one hand I don't like that Handal is settling after only a few months because I doubt enough pressure has been exerted on ArcSoft in that time for them to offer more than a nuisance amount.
On the other hand, it appears that just hammering out the settlement agreement is taking longer than normal (what we might deduce from the language/timing in Pacer docs for past Flash-R settlements). So maybe this indicates that royalties WILL be included and it is taking longer to work out those details. We can hope.
- Sinkman
