Patriot Scientific

Patriot Scientific Reports Profitable Quarter; Q3 FY '08 Net Income $6.3 Million or $0.02 Basic and Diluted Earnings Per Share.

As was PR'd back in 2012, there were 13 companies that we took to task at the ITC and in US District Court. They are:

  1. Acer Inc.
  2. Amazon.com Inc.
  3. Barnes & Noble Inc.
  4. Garmin Ltd.
  5. HTC Corp.
  6. Huawei Technologies Co. Ltd.
  7. Kyocera Corporation
  8. LG Electronics
  9. Nintendo Co. Ltd.
  10. Novatel Wireless Inc.
  11. Samsung Electronics Co. Ltd.
  12. Sierra Wireless Inc.
  13. ZTE Corporation

HTC & Acer were on the NDoC docket for trial beginning next week. The other 11 of this Dirty No Good Gang of 13 had their NDoC trial proceedings indefinintely stayed pending the resolution of the ITC proceedings.

As we know, Sierra Wireless settled some time ago, Kyocera settled a short while ago, Acer and Amazon settled most recently. For PTSC shareholders, those settlements have been less than positive.

So the No Good Gang of 13 is now a Dirty No Good Gang of 9. HTC is set to get smoked at trial beginning next week if we have the stones to go through with it. The other 8 companies will still be on the hook for District Court Trials once the ITC proceedings are fully finalized. While the 4 companies who have settled would obviously not have any more exposure at the ITC or the US District Court, I would think that the Dirty No Good Gang of 9 would still be subject to an ITC appeal if we believe there is value to pursuing that. At the least, the 8 other than HTC, will still be subject to US District Court litigation should we continue to pursue that, as I would think we will, depending what happens in the HTC case and what that precipitates as far as settlements from those other 8, if any.

According to the PR, the relief we are seeking through the US District Court proceedings and still potentially through the ITC if appealed are:

  • An exclusion order preventing the importation of unlicensed products - (ITC venue)
  • Damages for past infringement and for unpaid royalties, including interest on those royalties, both TRIPLED for Willful Infringement as well as attorney's fees - (US District Court Venues)
  • Injunctions barring the sale of infringing products in the US in the future - (Both ITC & USDC Venues)

We've heard from Amazon, that our claims amount to $42M in damages/royalties, and $17M in interest, though it's not clear if those were already tripled for Willful Infringement or if they are before that 3x is applied. We've seen references that HTC would have agreed to pay either $8M or $10M if they had licensed without the legal battle, so I assume that amount would have included an early mover discounted rate, and pretty sure there was no interestd or tripling for Willful Infringement in those numbers. So, it would seem they should have at least a $50M exposure and hopefully perhaps much more than that at this point if we prevail. I can't remember any quantification of the other Dirty No Good Band of 9's exposure to damages, but I would assume the whole group represents at least a $200M-$300M amount, especially if willful infringement is ruled.

To me, it feels as though strategically, we intended, and it will help us to have HTC as the lone litigant, and that if we don't cave, and we do prevail, it will most likely induce the other Dirty No Good Gang of 9 to come to the table and settle.

3 weeks to possible CLARITY! Hard to believe! The question is, is that light at the end of the tunnel paradise, or an oncoming train! Lol.

Good luck to all, except the Dirty No Good Gang of 9, of course!

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lambertslunatics
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