Member Info for LordWM

Yes, PTAB appeal under way, it typically takes 12-18 mths - (4min 33) - https://www.youtube.com/watch?v=1z-ELdRSPF8

2/2
For litigation win (US sales only)
Past Sales: 16m displays sold x £10 – 40% legal fees = £96m (£0.45 per share)
Plus future sales 4m annually x £10 and a 6x multiple as this is a revenue stream = £240m (£0.74 per share)
TOTAL for a low-end court win for US sales only (excluding ROW) = £1.19/share

APPEALS
Samsung would appeal, but Nanoco would then take action in other territories and likely secure injunctions preventing TV sales in key markets, so Samsung would settle
Appeals discussion - 4min 33 secs - https://www.youtube.com/watch?v=1z-ELdRSPF8

GLOBAL SETTLEMENT & SHARE PRICE
What would Nanoco’s board settle for? - https://www.youtube.com/watch?v=1z-ELdRSPF8
Assume 40m displays sold globally.
Worst case £10/display, could be much higher (see below).
Assume 30% of award in legal fees (lower % as a higher award)
Award for future display sales (10m annually globally)

For global settlement – 40m displays sold x £10 – 30% legal fees = £280m (£0.87 per share)
Plus future sales 10m x £10 and a 6x multiplier as this is a revenue stream = £600m (1.86 per share)
TOTAL for a low end global settlement = £2.73 per share

DAMAGES MODEL
BT – “We believe the damages model should reflect the total value enabled by our IP, i.e., the value of the entire TV because without the quantum dots enhancing the display, you do ask yourself why would anyone bother money on a TV that didn't have an improved display.”

If you assume £20 per display:
US Litigation win = £2.38 per share
Global Settlement = £5.46 per share

Are there many opportunities to potentially 10x at the moment?
DYOR

Background info:
https://seekingalpha.com/article/4501332-nanoco-group-plc-nnocf-ceo-brian-tenner-on-q2-2022-results-earnings-call-transcript

Post 1/2
I’ve stayed pretty quiet as we’re just waiting now. But while we’re waiting for news of a settlement, trial date or commercial order, I like to remind myself of some of the fundamentals of the Samsung litigation. Also hopefully useful for new investors.

BACKGROUND
- Nanoco started working with Samsung in 2006
- Samsung asked for help creating CFQDs at industrial scale, couldn’t do it
- Nanoco had patents solving this problem and collaborated with Samsung for 6-7 years
- Nanoco were “pretty disappointed” when Samsung ended this collaboration and then launched a TV within a year using CFQDs, without taking out licence for Nanoco’s technology or a supply agreement with them or one of their partners.
- After informal conversations which got nowhere, Nanoco started litigation

PTAB
Nanoco then won PTAB / Inter Parties Review (IPR) confirming their patents are valid.
BT (April 22 – before PTAB Decision) “Because the PTAB would have settled validity, it does mean that during the trial, we will just have to focus on two arguments, infringements and damages. And given that the trial is only one week long and each side gets 12 hours to present its case, it's actually really useful that we will not also have to talk to the jury about validity and only focus on infringement and their damages.”

TRIAL
The trial was postponed twice in Sept and Oct, and we’re waiting for a new date, which is imminent.
https://polaris.brighterir.com/public/nanoco/news/rns/story/wkooj2x
At the end of the one-week trial, we’ll have a decision and damages number (assuming Nanoco win).

BT - “the trial also considers the question of willfulness because if Samsung are found knowingly or deliberately infringed our IP, then damages under U.S. law can increase by up to 3x but we would note that the typical decision around willfulness in Texas is typically around 1.5x multiple, so not a 3x multiple.”

DISPLAY UNITS SOLD BY SAMSUNG
16M in the US, 24M ROW to end of 2021. (actual figure much higher).
https://www.edisongroup.com/publication/growing-confidence/30787/
BT (April 22) - “We're also aware, based on press reports that Samsung are now selling their panels to other huge multinationals which all serve to increase the number of potentially infringing units that are out there in the market. And as I mentioned in a couple of slides earlier, the QD use cases are expanding to include telephones, tablets, phablets and advertising, public displays, etcetera.”

LITIGATION DAMAGES AWARD & SHARE PRICE
Worst case £10/display, could be much higher (see below)
1.5x multiplier for willfullness
Assume 40% of award in legal fees
Award for future display sales (4m annually in the US but increasing rapidly https://www.flatpanelshd.com/news.php?subaction=showfull&id=1661491292)

I noticed Nanosys were named in pre trial documents. Nanoco were trying to stop Samsung calling N a patent troll or mentioning Nanosys. The implication I read was that Nanosys possibly infringe Nanoco patents too and Samsung could use it as a distraction- why pursue us (Samsung) and not them?

Thanks. How about Nanosys, do we think they have a different product/method?

@Nanonano - really don't understand how other companies can manufacture and commercialise CFQDs. I thought the only way to do this at scale was with nanoco's patented method.

Woudl love it if someone who understand this could explain how Quantum and Nanosys do it.

Any OEM supply agreement like this will have a standard clause indemnifying the customer if the product supplied violates a third parties IP. So if Nanoco win in court, Samsung would have to defend/compensate Amazon.
Another reason why this will settle quickly, either before trial or shortly after if Nanoco win in Texas.

It's 1.30am in South Korea, 11.30am in Texas. The lawyers are all in the US, if they're talking they'll be doing it now.
The Koreans wake up in a few hours, any agreements will likely have to be approved by Head Office.
If they're getting anywhere with a settlement, it will have to be agreed, documented and signed before Nanoco inform the court.
If there is to be a settlement before the trial starts, they'll be pretty much there with the detail already, ready for paperwork to be raised, checked and signed.
It's possible that any settlement will have confidentiality undertakings for parts of it. Any RNS may need consent from Samsung.
If this does happen, I'm guessing we'll likely hear in the mornings UK time, as Korea needs to be awake to sign and approve RNS wording.
Surely if there's too much daylight between the sides, we'd have an RNS from Nanoco re the trial date, gagging to get into court, feeling confident, etc.
Good luck all, nearly there.

So close to buying more, quoted 43.99. I'm a danger to myself!

Thanks Morbox.
If S&N were wide apart and a trial was most likely, I'd think we'd have an RNS because it's important shareholder information (and they've always RNS'd promptly before). But they have a duty to not mislead shareholders.
If the trial is scheduled to start in 7 days and we've had no RSN, then I have a good feeling about this, that's all I'm saying.

Are we certain that the trial date has been set for 3rd Oct? If so then why not announce this to the market, they always did this before in a timely fashion?

Re today's sells, nothing that's happened in the wider economy changes the investment case for Nanoco (if anythign it makes it better with the $vs£, people sell for any number of reasons. I'm not worried about that personally.

N was very quick to update on court date progress in August, including the court date set back.

It seems super unusual that they haven’t issues an RNS re the revised court date of 3rd Oct, which appears to have been confirmed by the docket.

I don’t want to be called a ramper, but this feels to me like we’re likely to get a settlement before Monday. If they weren’t fairly close to an agreement, I’d have thought N would signal their preparedness for the trial, starting in 7 days.

Any settlement if it happens will be full and final, with compensation for past global sales and a licence for future global sales, likely with an amount for legal costs too, with undertakings for N not to take action against S customers and suppliers. Lots of detail, and transformational for N and shareholders.

The more time that passes without an RNS, the better this looks IMO. Good luck to everyone.

Sorry, to clarify, the £5+ SP is for a global settlement not a trial win for US sales, but you get the idea.
But I do think we'll get a global settlement. Samsung won't settle the US case and leave Nanoco with no choice but to start legal action elsewhere.

I still think a settlement before trial is most likely.

Is Samsung lose in Texas, Nanoco can cause them big problems with injunctions in other territories and by writing to Samsungs display OEM customers and supply chain partners, informing them that their products infringe Nanoco's patents, putting them on notice that they're facing legal action, which Samsung will likely have to defend. Imagine an injunction against one of Samsungs customers in Germany, that Samsung have to compensate for.

Why was this trial delayed and not another one? Surely the judge has discretion over this, bringing to trial the case that's least likely to settle. I don't know but I can't imagine it's random.

There's no doubt that S and N are talking and that offers have been made, for tactical reasons if nothing else. Offers will become more realistic as the trial approaches, if S are worried about the trial outcome. If there's a settlement, it would most likely happen on the eve of the trial.

It seems from the pre-trial rulings that Nanoco are focussing on the medium and higher damages models - this could result in a huge award (eg $20 per display, 50% of the award for past sales going in legal fees, and a 6x multiplier on pessimistic future display sales, should give a share price of £5 +!). Nanoco's damages experts will argue that QDs are an enabling technology and the TVs are marketed as QD, they'll be asking the jury for way more than $20 per display. Plus QDdisplay sales look likely to accelerate because Samsung appear to be adopting QD for all TV's, to make QD mainstream. Future licence fees could be breathtakingly high. See previous posts around potential award numbers and how transformative these could be for Nanoco.

Also, would another customer licence N's technology if Nanoco can't enforce their IP in court? The other customers in the pipeline will surely wait for the Texas outcome before committing. So following a trial win or settlement, we could see orders soon after. QDs are a proven technology (proven by Samsung in their TVs), more use cases (sensors) will follow.

The big question is whether Nanoco's case is strong enough to win? Would their legal partners and funders still be in this if they didn't think so?

If Samsung think they're going to lose, with a medium or large damages model and willfulness multiplier, having invested $billions to commit to QD, they're likely to settle.

Thanks Hawi, very interesting.

I'd add re point 2:
2/ The price is possibly fair for where we are. But the upside of a court win/settlement will be a multiple of the current marketcap, plus an ongoing revenue stream that will be more than the current maket cap, each year.
Bearing in mind Samsung's moves to make QDdisplays mainstream, ongoing royalties will accelerate.
There's also the possibility of a takeover, but the price would have to be a significant multiple of where we are to make that viable and gain shareholder support.
I think we're all desperate for the RNS confirming a new court date, hopefully for early Oct.

I still think a settlement is most likely (before trial).

If Samsung think they'll lose it will cause huge problems if Nanoco then get injunctions in other areas. Also, if samsung are supplying other OEMs, that's a huge headache for them.

IF Samsung think they'll lose in court, they'll want a global agreement in place to draw a line under this.

The 5 year high looks like 54.4p........

Small steps guys, 52 week high is...... today!
Onwards and upwards.

Ha, I should know this, I’m going to be hugging him at next years AGM!