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enteleon, thank you. The royalty of 2.5 m pa sounds very little. Conversation to sterling would mean about 6m TV's pa to break even. I suppose any license fee would be on top.
NIDGM- Edison's Report on Nanoco , dated May 11th, 2017, is worth a read. This was written when Display was Nanoco's primary focus, viz: 1) New non-exclusive commercial arrangement with Dow (31/3/16). 2) Wah Hong commercial agreement (22/7/16). 3) Merck commercial agreement (1/8/16). 4) Purchase of Kodak patents (28/11/16). Obviously before the ? Apple partnership was announced on 8/2/18.
In this Edison Report, it is estimated that Dow's Cheonan facility could supply CFQDs for millions of square metres of display screens and could therefore generate greater than $2.5M of royalty fees for Nanoco per annum. Edison's base case was a royalty to Nanoco of $2.20 per square metre initially, but eroding by 12% each year. Edison used IHS's figure of an estimated cost of $57.8 for the QD film for a 55 inch TV (0.83 square metres).
It is interesting that Edison stated: " Nanoco was founded specifically to commercialise research, dating back to 2004, to solve the problem of manufacturing QDs at scale. The Company's proprietary molecular seeding process enables CFQDs to be manufactured to precise scale (and therefore colour) without rapid cooling....... a more simple process than the alternative high-temperature dual-injection method. We believe that the ease of scaling was a key factor in enabling it to secure licensing relationships with Dow and Merck."
I understand that the key platform for the lawsuit against Samsung is this precise issue of the molecular seeding process.
The KAIST (Korea Advanced Institute of Science and Technology) lawsuit against all of Intel, Apple and Samsung for IP encroachment of its FinFet technology is salutary. Intel buckled early and signed a licensing deal. Apple fought on until 2019 when it settled for an undisclosed sum. Samsung, however, battled on, eventually having a claim of $400M laid against it, subsequently reduced to c.$216M (as PPE has kindly already stated on this thread) earlier this year. One commentator stated: "Samsung showed no signs of backing off. The company (Samsung) seems to be ready for years of suits, its go-to strategy aimed at exhausting powerless parent holders such as individuals or small-sized outfits."
On the issue of funding for the lawsuit, ME has stated that this funding is very germane to Nanoco's balance-sheet. Presumably, therefore, successful conclusion of a funding agreement would be announced through an RNS ??
I understand, Nanonano, your feeling of deja vu. Having begun investing in Nanoco shares in 2012, I have seen nothing but dead ends. Yet. in view of the two years of prepararing for volume production followed by on-going Nanoco refinement, I strongly suspect that the STMicro deal is nearing commercial production stage. There should be no surprises, since both Nanoco and STMicro must already have a clear understanding of the product's capabilities and limitations. While Nanoco lacks strong sales capability and often seems desperate in its dealings, STMicro has a strong sales organization and would not have entered into this deal without having already identified end users with real needs.
Hi Screenl
The numbers don't really matter too much - $26 Bn is max possible based on 26 m tv's being sold (as opposed to 14m) at $1,000 each..
Even $450 m would save nano from running out of cash in the short term and justifies a Sp of > 140.
To put it another way I expect a settlement worth over 10* current price and a big contract. Even at current price 15 given STM contract and the fact that nano never had any trouble raising funds, I think the downside is small while the sky is the limit.
BoL
Thanks PPE. I was just responding to a post at 12.32 by Nanonano, who has a view that barring Samsung from selling their Q TVs in the USA would not be very likely, without giving any reasoning.
Does Samsung have a record of being taken to court and sued successfully in the past for IP infringement then? And the scale of any damages awarded? Can't believe Nano is a first for them, if what you say is true, PPE.
Can a LTH here please explain how Samsung came to "pinch" Nanoco's CFQD IP in the first place, and go on to ramp it up commercially for their own use? Sounds unbelievable that they would just steal it without recourse.
Why wouldn't the Texan court slap a restraining order on Samsung selling their Q TVs in the USA, if they lose?
Sorry NIGDM, I remember the discussion but not the numbers. I remember thinking it was a lot, and $200 per set could well be correct. Samsung turned it down as being way too expensive and the Display industry has since become super competitive, so I am not sure the numbers help us too much now. There would need to be some form of reassessment by reference to whatever commercial terms would be achieved today.
The extra profit ME refers to and the $15 per set might be more useful as starting points?
Just going back to my original query this morning (09.31) can anyone remember what the original proposed selling price was for a kilo of dots to Samsung? If supplied by Dow I am sure Nanoco was due 25%. I have in my mind that the cost to Samsung for dots for each average large sized TV would have been in the region of $200
Whoever finances the claim will get a sizable piece of the pie, which is fair enough ...
Sorry forgot to mention that in the conference call ME said Samsung had made 14 billion from nanoco's techmology (based on the differencce in selling price of QD televisions and similar non QD televisions and thenumbers sold). ME then said Nanoco wanted their "slice" of that. How big is a slice? In my houshold maybe between a twelveth and a fifth of the cake. That says to me ME is HOPING( Iagree this is not necessarily what he will get) a slice of between just over a billion and between 2-03 billion. DYOR these cake calculations have not yet been peer-reviewed!
Quite Screenlearner. ME has set the lower end of the range but is clearly not able to make assumptions about whether the Analytical basis of calculating damages will be applied by the Courts, or how much value could be attached to it. It would be unrealistic to expect that NANO would be awarded 100% of Samsung’s additional profit. ME stated that NANO wanted its “share”.
I have already watched the video carefully before. The calculation was from the questionner not ME. ME said that model /sum was possible but there were many models/ways of calculating thes ettlement and their (nanoco's)models ranged from that figure and UPWARDS. It was clear ME thought this was the MINIMUM figure.
I would need to go back and check the video again to be sure NIGDM and might do so later today.
I have personally put any dreams about a payday from Samsung on the back burner, as I believe it's likely to be some time before Nanoco see any money from them, and in the near term they need additional contracts to keep ticking over in their present form. If Samsung were barred from selling their sets in the US, that would certainly speed things up, but I think there is little chance of that happening.
The STMicro contract is a move in the right direction, but I get a sense of deja vu from past agreements. Significant revenue from STMicro is likely to be about two years away, and that assumes things go to commercialisation.
At present and for the near term, display seems to be the only revenue earner with sufficient volume to bring in big cash, and Samsung have exclusive market for cad free QD in display- the Chinese and Taiwanese OEM's seem to be in no rush to switch from Cadmium or Cadmium light QD's.
It can turn back quick botbot, Friday was a great day though...
Without upsetting nanonano's sensibilities has anyone found something that is depressed due to Covid and due a bounce?? I've put a couple of £K in here so I'm allowed to ask :)
Yes, but importantly I don't recall if it was a figure ME introduced or just acknowledged in replying to a question stating that figure.
It is the lower end NIGDM so a conservative estimate yes. In the same conversation ME mentioned the profit based calculation too, so whilst we have a range but the floor is a known quantity and the ceiling far less certain. Any award received will transform NANO’s prospect.
Certainly reference to Q (quantum) could be a consideration in shelling out an extra $900 for the TV, if buyers associate it with CFQD but the Texan court is the right forum to decide if and how much value is derived from NANO’s IP.
ddubya, I thought that was the extreme low end that was referred to in answer to a question at a recent briefing when he raised the $1,000 profit per set. In fact, without going back to check, I thought the $15 was the suggestion of the questioner, which ME referred to in his reply. I seem to recall some on here being annoyed he had used the suggested figure in his response.
NIGDM. ME has stated a licence would be around $15 per TV, hence the $210m estimate over 14m TV.
We would all prefer $26bn Screenlearner but if NANO wins in court I believe the estimate I have suggested put forward is far more likely than the bigger number. ME did say funders are very attracted by the possibility of nailing Samsung on profit based damages. There is certainly a case for that but it may be more difficult to demonstrate and it would be more economical for Samsung to fight damages of that order for years. What estimate did you have in mind?
Ha Ha. One says 26Billion , another says 450million. NowI think I know which we would all prefer. But it this is a sweepstake I will go for (pure guess) £2 billion + paying future royalties on sales. Any other offers?
I am trying to remember back to the days when Dow and Nanoco were first working to supply Samsung. I have in my memory that the price of a kilo of dots would be 200k and this would make about 1000 TV's. If Dow supplied the dots, Nanoco would receive 25%, in 2 tranches. Thus the benefit per TV, at the start of the contract (at least) would have been around $50 or $200 depending on who supplied the dots. I believe it was expected that the dots would become cheaper as they spread into cheaper TV's.
Can anyone remember what the actual figures were as that may be a logical starting point for Nanoco and its lawyers to be working from.
Nige. Oops fat finger sent my last message a bit early . The final sentence is muddled but hope you get the gist.
It does look like Samsung has been making surplus profits from NANO enabled TV but proving the additional profit is derived from NANO IP will be harder to prove. So, whilst it is a possibility, we should not assume damages in the $billions. If we win in Court the likelihood of $630m seems reasonable and in event of pre court settlement something around $450 is my guess.
In the US, patent holders are entitled to "adequate compensation", and the value should be no less than what they would have received under a royalty agreement. Using ME figures of 14m TV, that's $210m and if 'willful' infringement, the Court can award up to 3x so $630m
In order to apply higher damages, the Court would need to be persuaded that an alternative 'Analytical' basis was more appropriate, for example, because Samsung has calculated that it could make bigger profits by aware that it could make larger profits by infringing the IP.