Member Info for Feeks

"That's why when there's a disparity between the share price and what I think it should be"

Nigwitty, the final point I am making is that I don't believe the share price should be any higher. I have not said that. The current share price reflects the markets general assessment of the normal risks of litigation which it DOES generally understand. i.e one can easily lose one's shirt even when it looks like a sure thing

And to end that thought, why could I buy at 10p when this case was launched if the market was right then? And why did it so badly misjudge PTAB. I don't think the market can ever truly value a complex legal case like this.

The question is how can the "market" value a complex legal case without fully getting into the detail, and even then with all the vagaries of a litigation case which must be factored in, is this ever worthwhile? It amounts to a lot of time and effort, and expert judgment on the case prospects. I don't think the market can very well do that perfectly. It is 'imperfect'. And the damages question is just one element of it.

And here we both done that work, and yet we reach utterly different conclusion (on damages) so maybe that's just the point. I would consider that some of your assumptions to reach that view are wrong, but then again, neither of us is a US patent attorney. Overall , I think there is an strong case for a major surprise to the upside and will be looking to test that assumption to the fullest over the coming weeks, as of course my views could turn out to be foolhardy.

Thanks NGR - didn't know that!
I guess we have some US folk in here too ;-)

"$500m"
Low $10 royalties - we differ on that!
But no multiplier - really..?

"Halve it for risk and delay = £200m"
That's a whole lot of discount to factor in, so please explain that one to me. The trial is September, so add a year for an appeal. Not too long to wait, surely? PTAB is ongoing and will run to roughly same timeline. An onward appeal to the Supreme Court must be unlikely in the extreme as there are so very few cases historically, and I have not seen any dispute on a significant point of law. The case revolves around disputed factual issues.

"Add a bit for the value in the organic business "
I've put zero value on the organic business. I'll believe it when I see it!

But on your analysis we wait for the market to catch up with the more educated investors and now is a great buying opportunity, or have I misunderstood?

That is increasingly my view too. I have never really focused on damages before now as PTAB was such an obvious hurdle to get past first. I will share some of my analysis to back up my views in due course, lest I am accused of 'ramping', but it won't be until after the weekend.

I thought funders were based in US. Spotlight was a name I saw, or something similar. They might be only the IP specialists.

I've been doing more reading up on damages today. I begin to wonder why anyone should think minimum royalties of $10-20 are the most likely outcome by far when the Federal Court does not expressly endorse that type of approach to calculating damages. It is but one small component of the Georgia-Pacific hypothetical analysis, which I assume is what you have been looking at too?

The basis for Reasonable Royalties is restitution not compensatory (as in Lost Profits).

Restitution measures the remedy by the defendant's gain and seeks to force disgorgement of that gain. It differs in its goal or principle form damages, which measures the remedy by the plaintiff's loss and seeks to provide compensation for that loss.

In my view one of the higher damages models is almost bound to be applied. Caution aside, is that your view too?

Good question, but to my mind it is surely confidential? By the same token Nanoco does not have to reveal all the inner intricacies of its arguments on the court case. I would think that the first we will know is an RNS to say that the matter has settled / trial will be concluded.

Sammy - Your other investment seems to be Burford. Any connection with Nanoco.... ?

My point exactly LordWM. All these scenarios point to something north of 40p provided Nanoco wins at trial or settles. If the pre- trial share price was £1.00 i would find it rather more difficult deciding what to do.

"One thing I find compelling is that their materials state lead free."

Nanonano-
Where do you get that?

Their front page banner says "High- performance lead-containing quantum dots"

?

"I'm sticking to the over-riding principle that any damages are unlikely to put Nanoco in a much better position than they should have been in"

NigWitty -
The 'principle' you allude to does not apply to this case, and it is not even supported by the links you have posted.

I would even question whether the wider market agrees with you. It simply isn't sophisticated enough to know better. Firstly, Edison's low end damages calcuations seems to be taken as gospel mainly because very few people outside this bulletin board will have taken the enormous time it requires to study the complexities of this case. Secondly, and more obviously, the trial is not won so for most investors it would be like punting on a wildcat well test result. Then lump in all the other reasons that others have mentioned as to why Nanoco is not an attractive investment - small cap company, no earnings revenue, etc... That constitutes huge downside risk for any investor.

Personally, I feel that winning the Markman and invalidity contentions were absolutely vital to Samsung's chances of winning this case and it totally failed.

My own expectation based on what I know now, and which I believe to be reasonable, is a sum of around $100 per tv plus 1.5x to 3x multiplier if Nanoco wins the trial. That means I don't have an investment decision to make at current share price level as I am prepared to wait for a trial result and I consider that any award even at the low end is likely to push the price well north of where it is at present (low 40's).

Is there a concensus that the base is now 15m US tv sales up to Agust 2021?

But you cannot ignore the legal principles so I'll take my lead from the case that Nanoco's lawyers have actually pleaded. Edison has not even speculated on the likelihood of a lower award compared to other scenarios.

Nope, because all those scenarios permit Samsung to profit wildly from its infringement. It will be to Nanocos benefit thst it didnt have to build a factory if it wins this case.

If that's not correct then why on earth has the case not already settled...?

According to the document posted by NigWitty wilful infringement, simply defined, means that the party was aware it was infringing the IP.

Just summarasing a few of the arguments on damages below-

Nanoco said it would get $10 per TV via its arrangement with Dow back when it looked like Dow would be making dots for Samsung. (Query why did DOW not sign a contract to build the factory.....? Or did it sign one but doesnt want to litigate against Samsung for other financial reasons. Who knows?)

That $10 was based on $100 per tv input costs to Samsung for the whole QD film layer, which it would have needed to pay to DOW. (N would have been entitled to 10% royalty from DOW in that sum).

This is equivalent to 20% of the operating profit per QD tv based on $500 operating profit (50%) on tv's being sold at a $1000 mark up. That percentage is also close to the 25% rule of thumb mentioned by Sammy, which I understand could have been used as a guide had there never been any licence negotiations.

In other words the 25% rule of thumb ($100) holds good because that was the overall licence cost to Samsung shared between the two licensees.

Samsung did not pay the $100, it went to its bottom line profits.

The question for the jury is whether to award that additional profit to Nanoco, the party with the valid patents, or should the company which infringed the IP be allowed to retain it? The latter scenario unjustly rewards a transgressor and so in my view that is most unlikely to be the conclusion reached by a jury especially if it has decided that the infringement was wilful.

In my opinion this is a simple and reasonable method of redressing the financial balance which must surely be the cornerstone of Nanoco's case setting its base expectations for damages at trial.

BT said not everyone would make the move to Runcorn, for personal reasons, so at a guess maybe him?

Hawi I hope you loaded up in your ISAs and SIPP to reduce CG tax?

The trial will be in September and last 5 days. As its a jury trial I am expecting a verdict at the end of the 5 days, or however long it takes them to deliberate before reaching a decision. In other words, very soon, and earlier than I ever expected. That's a good sign in my opinion as the judge is in charge and making sure Nanoco does not have to wait any longer than it has done.

"Chat in the City" probably means they have been reading this bulletin board. Those Edison sales figures are demonstrably out of date so I am not even sure why we are sticking wit the $200m-300m they originally put forward

In this case the lawyers are incentivised to win; the funders get nothing if they lose.