Q4 2019 Earnings Call
Okay and welcome to the Interdigital fourth quarter 2019 earnings call Today's conference is being recorded.
This time I would like to turn the conference over to Patrick Vanderwilt. Please go ahead Sir.
Thank you Todd good morning, everyone and welcome to Interdigitals fourth quarter.
Your 2019 earnings Conference call with me. This morning are Bill Burke, President and CEO first Dorsey old.
Which brings the our CFO.
Consistent with prior calls will offer some highlights for the fourth quarter full year 2019 in the company.
Nicole two questions.
Before we begin our remarks I need to remind you that in this call will make forward looking statement regarding our current beliefs plans and expectations, which are not guarantees of future performance.
Were subject to risks and uncertainties that could cause actual results and events to differ materially from results wasn't contemplated by such forward looking statement.
These risks and uncertainties, including those set forth in our earnings release in our annual report on form 10-K for the year ended December 31st 29 team.
And from time to time in our filings with the Securities Exchange Commission.
Forward looking statements are made only as of the dates euro and except as required by law, we undertake no obligation to update or revise any of them, whether as a result of new information future events or otherwise.
In addition, today's presentation may contain references to non-GAAP financial measure.
Reconciliations of these non-GAAP financial measures for the most directly comparable GAAP financial measures are included in our fourth quarter 29, chief financial metrics tracker, which can be accessed on our home page Www Dot digital dot com.
Clicking on the link on the West side of the home page that says financial metrics tracker for Q4 29 team.
With that taking charitable turn the call over to Bill.
Hi, Patrick and good morning, everyone and thank you for joining us on the call. This morning.
I thought I'd start with a quick recap of last year, where we see ourselves strategic strategically and then talk about our priorities for this year.
The 2019 represented the culmination of along in productive strategic journey for the company.
I get about four years ago, we embarked on a plan to expand upon this is our successful research back licensing model. We had built a model focused principally around cellular wireless technologies key ingredient that model was our focus on standardized technologies, where we can concentrate our energy.
An incredible innovation and let the industry carry our technology to all the users in a large invaluable market.
This was a perfect model for a small company that could not create its own market like an apple or overwhelmed one like allawi instead, our job with to innovate like no other.
And have the Giants in movers and Shakers in the industry agreed that our innovation was superior to others.
And that's what we did year after year after year registering indices World first santucci, Threeg Fourg and Fiveg technologies.
In writing they become one of the top contributors to the global cellular technologies.
First included the world's first digital wireless phone call in 1986.
Absolutely demonstration of working Fiveg platforms in Barcelona in 2013, seven years before the start of the broad five you roll out that we see today.
That's success was driven by the incredible strength of our wireless innovation team a team that create a innovation that has met with broad industry acceptance similar to a much larger organizations and rose to leadership positions voted there by our industry peers.
It was also driven by our innovative in reasonable approach, the licensing, which embraced flexibility pragmatism and the willingness to have independent third parties resolve dispute.
When we had our customers could not [noise].
We've always believed our licensing approach led the industry in terms of contemplating that.
Complementing a cooperative nature of the standards process and delivering the best value for the dollar.
This was evidenced in our recent transparency effort, which many of you saw on our website in our news announcement.
Well, we brought together in a more accessible way a variety of statistics and information around our large patent portfolio, our licensing rates and our licensing philosophy.
Much like much like we have let on innovation, we are an industry leader in terms of our level of disclosure around or less licensing practices of which we're very proud.
So when we look to expand our market position. He wanted something that would complement our success. We found that in the research and innovation units Technicolor and in the vast portfolio visual technology patents that have created.
Like our team in wireless there aren't I team is a world leader and advanced video related technologies.
To prove that point you need to look any further than the recent Academy awards with it or our 19 contributed key technologies to the Oscar nominated films like the line King and 1970.
That's the team has incredible and the two teams combined wireless in video represent one of the finest research teams in the world focus on these two critical technologies.
The licensing attack management strength of the technical isn't team was also very exciting maybe the best way to describe them as I said that when we looked at them. We saw ourselves skills, but also programmatic licensing professionals, who realize that licensing as a return business, where the customer needs to believe that the last deal was a fair deal and that.
Well, we will treat them fairly in respectively in the next deal as well.
Oh that came together in 2018 2019, and after a period of integration, we end 2019, any and exciting new strategic position.
On one side, we have a single R&D engine fueling our mobile device licensing business, a 500 million dollar annual licensing opportunity driven by our continued wireless innovation and complemented by our new video capabilities.
That same engine now also drives what we see as $150 million year like consumer electronics licensing opportunity leveraging the strong visual technologies capability of our ROI team.
Complemented by our wireless technologies and that same engine will drive added licensing opportunities and I have a ti and infrastructure.
All in that represents a annual licensing opportunity in the wireless and consume a lot in consumer electronics about 650 million.
And beyond $700 million with identity and infrastructure added in and we will do all that when essentially flat cost structure as rich will discuss in other words the cost level before we began this journey.
In short we have built a remarkably valuable research driven licensing business. Unlike any other in the world. Unlike five companies that also license were not locked into the direction of our product families and unlike pure license most pure licensing companies, we aren't limited by what quality IP, if any we can find for sale.
We drive to research, where the research needs to go we see it adopted on a global scale and we license it to consumers who benefit from that innovation.
That is what we do and we do it very well and frankly that is what 2020 will be all about executing very very well.
Let's start with driving revenue from our mobile customers as you. All know we have faced a challenging licensing of arm in China and environment fueled by the historic reluctance of Chinese companies to license on a consistent basis.
And the U.S. trade wars, which injected and uncertainty into their businesses. Nonetheless, applying our persistent pragmatic and innovative licensing approach, we successfully secured a licensing deal deal the ZT in the fourth quarter.
Our innovative approach this time combined with other license stores also resulted in a licensing deal with Google. We also move forward another discussions.
And initiated litigations, where we believe the licensing discussions has stalled and our regional positions were not being perspective.
As we enter 2020, we have a robust robust set of discussions underway.
We have litigations, we're moving forward on with the balance sheet strength to seek additional enforcement of our patent right if needed we.
We also have the strength of phase one of the U.S., China trade agreements to leverage and the continued focus of the U.S. administration on protecting IP.
We also have very strong already capacity that we can offer as additional value to our licensing customers.
We are bringing all of that Advair now and expected to be successful both in driving deals across the line in 2020 and in building a strong pipeline going into 2021.
2020 will also be the first year, we enter with our new CE licensing business at full operating strength.
As you know we ended the year securing our first digital TV licensee, we intend to build on that result to other licensing successes in 2020.
We also have a range of discussions underway with set top box manufacturers computer display manufacturers and PC makers.
Among the interesting things about this licensing opportunity is that it provides not only product diversity, but also geographic diversity as the vast majority of the CE customers. We are engaged with our outside China.
Our third priority for 2020 is defining our technology direction for example, while our advanced Fiveg and now six Gi and video coding efforts will continue in full force. We also see significant opportunity for new innovation areas of our artificial intelligence and machine learning, particularly how those technologies are applied until the.
It was in video domains.
And our last priority will be the finished delivering on the cost management goals, we laid out when we when we began this journey, which will provide more color on the expense side, but in a nutshell. We can see the destination ahead. We're on course to get there and we expect to arrived on time.
So to summarize exiting 2019 and entering 2020, we're excited by the licensing potential of the company, which now extends beyond our wireless licensing goals. We're focused on new technologies second expand our footprint in those markets and we're laser focused on our expense goals to maintain our full operating love.
With that let me turn over to Guy.
Thank you Bill I'll make a few remarks about our licensing progress and touch upon our continued technology it at all.
In terms of licensing we have some success in fourth quarter, two no wireless licensees and a new licensing across from electronics side of the business, where we continue to see progress.
We discuss dose wireless licensees in the last earnings call earnings call and Bill May also mentioned that you imagine approach that we took with Google.
The approach of partnering with others in the industry is one of which we will continue to examine closely.
Earlier. This year, we also provided the additional information related to our rates and patent portfolio in the wireless area.
With that we are now one of the most transparent companies in our industry and we feel all rates in relation to the quality and the strength of our portfolio also makes us makes us great value.
We think it's a great move that positions us well with all stakeholders and that we that we hope will once you get too so shortening negotiations.
Next let me touch on the consumer electronics license that we signed last quarter licensee for night, it's a recognized manufacturer of digital televisions and sub sub second subsequent to the.
The signing of them that license, we were able to publish the market market estimate of 150 again yearly revenue run rate in CE that we hope to achieve in three to five years.
While this some revenue sharing associated with that which will describe.
I will note that.
That run rate would represent a yearly revenue contribution equal to the purchase price of the technical color licensing business. So.
We are very excited about that opportunity.
Nation to the consumer electronics, we are very focused on wireless licensing well trade disputes and now Corona buyers have not made things easy in the past 12 months, we're launching continuing to work very very hard.
Among other things pursuing enforcement of our IP.
On the R&D side.
Cancellation of mobile World Congress, we lost a wonderful opportunity on but unveiled that we believe.
What we believe our some of oil finest in mobile communications.
Well, we will fall off with a press release these in coming weeks. So I invite you to keep a close eye on our announced announcements.
On our projected demos in Barcelona also included some groundbreaking AI at the edge demos.
And some fantastic technologies on the imaging Science science side.
On AI.
It's such a hot technology, one might think that is not much room for a company like specialty innovate.
It's not simply the case.
There are specific technologies, we are looking at the ensure that that intersect with our core research area, So what wireless and video.
Areas, where we feel that we are second to none and while a lot of AI. He is focused on large scale applications using significant resource. There's also a network edge or on the device, which we have a much lower and as you footprint and will be a very important going forward.
These areas provide us with tremendous opportunity.
So to summarize we are progressing in our licensing efforts. We are excited about the potential of the business. We are we've added in 2018 and 2019.
And we'll have a tremendous portfolio of technologies, where we where the opportunity to innovate continues.
With that I'll hand over to rich.
Thanks, guys.
Our fourth quarter 2019 results were highlighted by both recurring and nonrecurring contributions from new license agreements, we signed in the quarter, including cellular based licensing agreements with BG and Google and a video based licensing agreement with Tonight.
Well actively these agreements contributed over $26 million of revenue in the quarter.
Putting more than $4 million of recurring revenue.
These contributions along with another $2 million of nonrecurring revenue associated with true ups from existing customers and a contract renewal.
Our total revenue to $102 million for the quarter and nearly $320 million for the year.
Moving onto expenses, our fourth quarter 2019, operating expenses increased over third quarter levels, but less than expected.
The $8 million sequential increase was driven by a 5 million dollar revenue share to our Madison partners really it's a nonrecurring revenue.
And a $3 million increase in litigation expense.
The litigation increase was only half as much as we expected, resulting in a favorable variance against our expectations and was due to the initial pace or the proceeds.
Excluding these items our expenses were relatively flat with third quarter levels and we remain on track to bring our ongoing economic cost metric back in line with 2017 levels by the end of next year.
Looking forward to 2020, we expect first quarter revenue to be in the range of $73 million to $75 million comprised almost entirely of recurring revenue from our existing agreements.
As always these expectations could change based on any new agreements. We may signed during the quarter were true ups or other nonrecurring revenue from existing agreements.
Our Q1 2020 operating expenses are expected to decrease by $3 million to $6 million from Q4 2019 levels.
Driven by an expected decrease in revenue sharing of more than $4 million.
However, there are a number of factors that could impact our Q1 estimates.
Including the timing and pace of litigation.
And any potential favorable expense impact from the ongoing Corona virus epidemic on travel litigation or other expenses.
One final note on the guidance.
Operating expense forecast includes less than $1 million of Rev share under our Madison agreement, representing less than 25% of our expected consumer electronics revenue for the quarter.
As previously disclosed we see the CE Echo system as a 150 million dollar topline opportunity.
We estimate that roughly one third of that revenue opportunity would be shared with our partners, resulting in a net opportunity for us of approximately 100 million hours.
I'll close with an update on cash and capital allocation.
We ended the year with nearly $925 million a cash.
And roughly one half of 1 billion in that cash.
In addition to this balance we have approximately $375 million due to us in the form of fixed payments under existing agreements.
Just future collections under per unit agreements.
As has been the case in the past we continue to maintain strong balance sheet, especially what we are enforcing our rights against parties that had been unwilling to pay fair and reasonable royalties for their use of our technology and their products.
Having said that we did repurchase approximately $25 million of stuff in the fourth quarter, bringing the total share repurchases for 2019 to nearly $200 million and the total since June of 2014 to over $625 million [noise].
I'll now turn it back over to Pat.
Thanks, very much rich Todd if we can open the call for questions.
Thank you if he would like to ask a question. Please signal by pressing star one on your telephone keypad. If you were using a speaker phone. Please make sure. Your mute function is turned off to allow your signaled to reach.
Again press Star one to ask a question.
Well take our first question from Eric Bolton B. Riley FBR.
Thank you good morning.
Couple of questions I guess one.
This is not going to the second quarter and get a row, where you. Your your operating expenses come in well below what you've guided to even.
Relatively close to being in the quarter I guess, what's what's the biggest.
In that it did the litigation expenses, because that's how much visibility do have in that and then.
No I don't.
Engage the expense and that's in each of the want to guide you but.
Yeah.
I viewed unfortunate expenses at 9.2 in the quarter the highest.
Some time, obviously as you move forward and litigation against Lenovo and a and why waves UK, you actually thinking about that run rate going into 2020.
Eric This is rich over the last two quarters. It Didnt litigation expense was definitely a big part of it and that was that's really the sold.
Ordinary driver anyway offer that for the most recent quarter.
As I indicated that litigation increase was only half as much as we expected.
And there is.
While we have visibility into the pace as its moving along we do rely a lot on outside counsel and folks outside of our four walls to do a lot of work and that drives a lot of the expenses a little bit of a lag in terms of collecting the information on.
How much the the pace is actually impacting the the expectations.
Beyond that.
And you probably recognize that we historically don't provide a lot of operating expense guidance, but we have been doing that over the last two years because expenses have been fluctuating as we've been.
Degrading the two Technicolor acquisitions.
Which first off as a step function change to at least initially to bring one this this new cost base.
But as you know we have the ongoing.
Cost programs to kind of bring that back in line and then you throw in a different onetime integration costs and there's a lot going on so.
I would attribute part of the third quarter.
That said those areas as well.
Okay and then.
Broader question on the.
Even if the million dollars licensing revenue projection from consumer electronics. The next three to five years any any details you can provide kind of behind that in terms of maybe how much of that revenue would come from your existing sales enhance their customers I know when you first made the technical or acquisition you talked about that devising kind of a 10% left.
To kind of that core license revenue in the maybe what makes up the remainder of that in terms of largest segments. You know set top boxes GBS et cetera.
Right.
So if you look at.
CE and that 150 million dollar revenue.
Opportunity you know the bulk of it is in TV or not that's all that's had a good portion of it isn't TV.
And then if you look at a TV market and how your leaders there are Samsung and LG see taxi and this is I think one of the real values of the.
Acquisition its customers that we now.
And so it's not we have to not processes are getting to know who we need to call. We already know that it's also customers that we can have a broader discussion with now. It's also gives US an opportunity for example, with Samsung They haven't earlier conversation around a lot of things because there's an opportunity to do that.
So as I think TV is a good portion of the once it density and I'd say good portion of the TV opportunities actually customers that we are familiar with there are other people in that space that are new so like a vizio would be a new fund I was a new customer. So it also gives us a.
Gives us a larger database as well.
If you look at that Iraq. This he he it's a mix of things. So it's a set top boxes. There I'd say, it's a it's mostly new customers, but there's a there's some folks that would be customers. We had for for example, Wally is a set top box manufacturer.
You have PC.
Manufacturers again, it's a mostly new customers, but theres a couple of people that are there are overlapping there and then you have other streaming devices or so from sticks and other things that again and mix in new and existing customers. So I think that the synergy there is great because the fact that someone.
The folks are ones. We know is fantastic because we can move those discussions along at least you have the relationships to do so but it also extends our footprint on licensing to assist in new customers as well.
Perfect. Thank you very much.
Okay.
Thank you won't pick on next question from Scott.
Capital Partners [noise].
Hey, good morning, Thanks for taking my question he quickly to clarify rich in the quarter, what were Technicolor shelves or or sales related to video intellectual property on a recurring basis and how should we be thinking about that in the March quarter and the remainder of this year and also as it relates to the 150.
The million dollar Tam you got some different business models. There in terms of revenue share depending on the end markets that hundred $50 million 10, what does that represent in terms of gross profit.
And then I had a couple of follow up.
Yeah. So on the first question recurring revenue from the CE side of the house was about three and a half million dollars in the quarter.
And.
Thats a I I provided.
Quoted in my expense guidance.
As a relatively comparable level of.
See in the next quarter.
There is.
Maybe a little bit of per unit.
Softness we want to protect against.
But.
Overall, three and a half in Q4.
As far as the the gross profit so.
The 150 million dollar.
Kind of opportunity there as a 50 million Rev share associated with it.
Most of the Rev share that comes on that Madison arrangement, which addresses the TV and CDM markets as Bill said that the TV market is that the largest portion of consumer electronics. So when you when you boil it all down.
For the total opportunity, including both you know the televisions and Cdns and non CD products at 150, we expect one third of that revenue to be shared I mentioned in the current quarter was only about 25%. So that tells you that we're we just signed our first GGB deal and allow the group.
It will come on that TV side.
Gotcha, and if I could other trying to probably.
Just to get some clarification in terms of the exposure there I know when you look at the recurring revenue base about it kick in this quarter, 89% is related to fixed fee relationship. So no risk from a per unit variable standpoint could you just [noise].
Kind of walk us through your high level thoughts in terms of exposure to variable impact as we see disruption to supply chains related to the krona virus and your direct China exposure is fairly minimal right with GE and that is predominantly a fixed fee relationship.
Yeah, I think you nailed that.
Got it when you said you got to 89% the revenue attributable to fix sources fixed contracts.
So on the remaining 10, 11% is there some exposure should.
Sure, but it's.
It's mitigated by the fact that it's so small relative to the overall revenue base.
And lastly, just to throw in one quick on Fiveg, but historically, you've talked about it being an incremental unit opportunity not an incremental rate opportunity, but when onto your transparency initiative publishing the rates you know you get a higher royalty on those fiveg devices on could you could you help us understand is is this a little bit of a change.
Do you see some opportunity for you from a pricing per unit standpoint, or should we can certainly still think about it is really just being a variable volume driven opportunity with fiveg. Thanks.
Yeah, I think you think about the five GE units as a multi mode of handsets. They are not very very few if any are going to be a single mode and typically if you look at the previous generation shifts the new if you think about the entire stat that provide sour licensing opportunity.
No that value all do earlier generations tends to go down while that new generation comes up.
So I would think about it.
As as the entire entire stack rather than individual individual technologies like fiveg.
Great. Thank you.
Hi.
Thank you won't take our next question from Charlie Anderson from Dougherty and company.
Yeah. Thanks for taking my questions I'll start with a high level question about China I think for me in the 10-K in some of your prepared comments today. It sounds like I'm still not a ton is known about phase one trade deal how it relates to intellectual property. So I wonder if you could just maybe shed any light on how your interpret in it and how the market is interpreted in terms of.
Your Counterparties in China.
And then what do you see it sort of the next steps to potentially unlock that opportunity for you, but I've got a follow up.
Sure.
So you know I think the phase one deal.
Provided certain.
Protections on the licensing of technology and technology is used very broadly in the agreement to include IP.
Uh huh.
It if you think about one of the things that the administration was going after with this requirement in China are the result in China that things were being licensed on non market terms force terms inappropriate terms.
And the agreement goes after that.
Specific item and then again I think it was it's a broad definition of technologies that would include licensing of IP on.
Nonmarket inappropriate terms, so I think that's where we can that's that's a good bit of protection that we have built up between our view all along has been we're perfectly fine with a very comfortable with the restructure that we've we have so comfortable will be published it is a decent our rates.
And if someone wants to challenge that perfectly comfortable with a fair independent third party setting the right.
And that we think is that position is very consistent with what the trade agreement.
It is advocating as well so so I think we've got that backstop Charlie so the other part of the trade agreement is the mechanism by which you enforce that.
And that's one where the processes on the two sides of the Pacific need to be established but there is a.
A requirement that they'd be established.
So that will provide a process and then last.
We believe takes the dispute from a individual company that company dispute. It brings it up to the coast country to country level, which we actually think is a way to level. The playing field. So all in you know obviously, there's there's more work to be done there.
But we are and that work is prescribed within the trade agreement.
But we think it was a it was a very good step forward and we appreciate the work done by the demonstration on delivering what was one of their big problems is list stop this force inappropriate technology transfer.
Great Great. Thank you for all the color and then rich a question on expenses I know in the past there was a commitment to get expenses I think it was kind of the 2018 level I wondered maybe you could just update us on those plans and sort of timeline to return to the lower expense level. Thanks much.
Yeah sure, it's actually 2017 levels and but you are right and as I mentioned and the comments.
We're absolutely on track to do it in fact, we updated if you go to the web site look at our financial metrics I think we last posted this maybe a year ago.
The Q4.
Right there so.
So that ongoing economic cost is 47.2 for the quarter.
That's actually inline with where we would hope to end up but it's aided by lower comp accruals for that for the moments, we'd like to be able to.
We will go I, just like we feel like we have more work to do.
As expected and we expect to continue that over the course of the next year in an exit this year with the levels that we didn't have to achieve.
Great. Thank you so much.
Thanks.
As a reminder to ask a question. Please press star one well take our next question from Matthew Galinko with National Securities.
Hey, good morning, Thanks for taking my question.
So I.
I guess first when you.
Mike touched on this earlier, but just given that you have I think LG expiring in 2020, I'm curious if you could give any thoughts on whether that can be rolled into our renewal on the handset side and Oh.
Consumer electronics deal or would you generally consider those things to be dealt with separately.
Yes, how is how we certainly kind of gives the opportunity.
For for for ourselves and the customer as well to Dealix jointly face a wish but we are prepared to do it separately again.
How about if that different companies may deal. This in different ways, depending on how they are structured and how they think about their own business, mainly the assets and the consumer electronics.
Alright, Thank you and then I guess on the.
The machine learning.
Effort that there you talked about in the prepared remarks.
Did that ultimately get representing more than a product that you look to kinda spin off or not operate or is that an IP licensing effort and I guess, if it's the latter can you frame sort of how that.
Played again some of it.
Right.
Changes to how are the U.S. flipside software IP that we've seen over the last few years. Thank you. Yeah. So obviously is an opportunity in both but.
He got to be if we think about FSS standardize technologies as the standards evolve in kind of anything like a video coating or or wireless are not immune for new new technologies and AI is a kind of it.
Great opportunity due to returning some of like if I take an example on a video encoding how the video coding should be done and that we take a perspective that the future standards will include AI components and depending on then like on time.
More or less but then that will be imbedded in the kind of a future video standards and wireless standards and then.
Hey, how it is what.
So far.
I wanted to standardize technologists that monetization would remain exactly like what we have been doing right now and.
And on on.
Central on the product side I think that's too early to speculate the moment.
Got it I'm sorry last question I appreciate all the color.
It's been a it's not too long since we launched the transparency site curious if you've had any notable response from the industry or you know there's been anything in balances you rolled that out.
[noise]. So I think it went as planned and I think.
To some extent the information was already available in the market. It wasn't as easily accessible to just had to go to different places that we brought it altogether I think we had good news coverage out of a number very very.
It will high profile IP centric Oh.
Publications that that's spoke positively about the about the effort I think deal. These my reaction from the counterparts I deal with as you know they actually feel like it's a it addresses some of the.
Yes, you know industry concern not saying that some of those concerns were actually valid I mean I actually think this then this issue around as did the do these conversations happening in the dark is there something nefarious going on there and it's not it's these are typical business discussions and they will.
As a matter of course happened in the confidential way, but we just wanted to say. This is this is the nature of the conversations and theirs and it's a very straight for conversations so.
So I think its overall helpful. Both with our licensees because now they.
Makes sense they didn't have the full understanding they have that now they know what their competitive position will be easy others. A this is also not because there's not a set or rates that represent.
No history in just the forward looking where we're going to go. This is this is our licensing history and so people I think can be more comfortable in knowing that when they signed a deal that they understand their competitive position visa vehicles that not may not get signed up.
You know in terms of regulators who were looking at this pace.
Trying to size up what the appropriate level of the stack should be we have a very now solid benchmark. They can look at because our politics are known or weights are known and people can do math and they can kind of scale that up to what a value in the market for the stack should be a it'll be useful in what because I think you know anytime you're in.
Core you always want to be as I think we've always been.
Upstanding player and the fact that we have a very transparent process is a very good facts that we can point to so it's all good so far you know and Oh I expected it to continue to begin.
Thank you.
Thank you we'll take our next question from Eric Wold of B. Riley FBR.
Thanks, just quick follow up.
Looking at kind of just your updated view on kind of with what's been happening on past few months around kind of the general IP. Unfortunately landscape, especially you know going with regards to UK core. It's Fran pricing is gonna be moved forward again, we'll know road why wouldn't is going to how you think your position there.
Right.
So obviously, we're still waiting on the unwired planet decision out of UK, Yeah that will be as I've mentioned, there are two before in others.
The UK is positioned as a good efficient.
Place right now have a single case defined.
A worldwide rate.
We think.
It completely logical unfair approach consistent with the co-operative nature the standards.
That said if it were to go a different way that doesn't mean, we have to start from square one we're still entitled to of course, our patents in the UK would still be entitled to an injunction in the UK summer wasn't what's going to pay fair rates. There. There's other jurisdictions that we can go too as well so.
Overall, the you know since our last conference call, there's been a issuance by the DLJ into U.S. as a paper that.
Basically rejected a prior position in the U.S. on standard essential patents and established a new and again I'd say right down the middle very fair position and that is that you know the prior positions that standard essential patents that were somehow kind of like a second class set of citizens. When it came to patents that you weren't entitled to a lot of the rights that you were.
Otherwise have for pads that was completely rejected by the Ajay and the Pat often they basically said, it's just like any other.
And you're entitled to the same amount of credit remedies for this past or other patents that is actually it sounds.
Really simple it is an asset, but it's very powerful because right now.
Have you an example.
If you're in front of the ITC with respect to the standard essential patents previously there was a question with the ITC actually enforced that patent at the end as they because of the policies and the government now it would say absolutely.
Well, it's just like any other Pat so I think it to the extent that they were jurisdictions in the U.S. that were little bit more shaky on etsy fees I think there I'm very very solid ground.
Today, Yeah, there's work underway.
Other jurisdictions around Sep is you know, we're not seeing anything or there's a there's an active dialogue. We're very much involved in that I think people are much more balanced ultimately interviews not to say you don't have extreme views that still get articulate.
Good.
But you know certainly the direction of.
The IP landscape and.
It's particularly that related to Sep is I think has been.
Existing moving in a positive direction and I continue to see that.
Going on.
Helpful. Thank you.
Yep.
Thank you we have no further questions in queue I'll turn the call back over [laughter] Patrick Vanderwilt.
[noise], it's pretty much talk thank you for everyone for joining us today, just a note or within a couple of investor conferences coming up in March will be of Roth conference in Laguna Niguel, and we'll see beautiful Sidoti Conference in New York, So looking forward to meeting some of you there.
Thanks, and see you next quarter.
Thank you for your participation. This concludes todays call you may now disconnect.
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