Aug 27, 2010 10:04 AM PDT
In listening to President Obama and the pundits talk yesterday about Supreme Court nominee Sonia Sotomayor, one thing really stuck out for me: her depth in defending the intellectual property of corporations. Apparently this area of the law is one of her greatest areas of expertise and she has a long track record.
Nominated is one thing, confirmed is another, but today, the top Republican on the Senate Judiciary Committee said he doesn't foresee a filibuster against Supreme Court nominee Sonia Sotomayor.
Unless something "pops up" from the past or she says something disparaging at her hearings, she seems, for all practical purposes, politically left on some issues and politically right on some issues and therefore somewhat; neutral.
I like the idea she has care for and experience in intellectual property (a relatively new area of the law developed over the last 50 years). Last week, I reported on Tessera Technologies (TSRA) winning an infringement case against wireless manufacturers Motorola, Qualcomm, Freescale and Spansion.
And a company in the private sector named V.i. Labs www.vilabs.com recently upgraded its software anti-piracy platform with new features that help Independent Software Vendors (ISVs) quickly determine who is using their unlicensed software and where they are located. V.i. bills itself as 'the nation's only integrated provider of Intellectual Property-based public policy, strategic management, monetization, and analytics advisory services'.
Of course none of this existed 30 years ago, but when pirated videos started showing up on street corners around the world for two bucks, an industry was born. With software, Internet, semiconductors and entertainment companies permeating the Small Cap environment, a friend on the court couldn't hurt.
Just look at Rambus Inc., (RMBS) http://www.rambus.com/ (trading on the Nasdaq in the $12 range) getting a 5% rise in stocks price yesterday when a U.S. District Court ordered Hynix Semiconductor Inc., of South Korea (000660.KS) Hynix to pay chip designer Rambus about $397 million for infringing on DRAM patents. The court ordered Hynix to post a $250 million bond within 45 days and take the remaining $147 million as a lien against its manufacturing facilities in Korea. The court also ordered Hynix to pay ongoing royalties into an escrow account, rather than allowing them to accrue until the court rules on an appeal.
"There was a lot of fear that Hynix was going to go bankrupt and a lot of people thought they might get a $400 million hollow judgment that you can't collect," said one analyst. The U.S. court prevented that.
Shares of Rambus closed up 62 cents, or 5.17 percent on the news. Rambus products are used in computing, gaming and graphics, and consumer electronics applications, as well as in personal computers, servers, printers, video projectors, game consoles, digital TVs, set-top boxes, and mobile phones.
RMBS has a market cap of $1.34B with a 52-week high of $21.87 on 06-25-08 and 52-week low of $4.95 on 11-21-08. It is currently above its 50-day and 200-day moving averages and has trailing twelve month revenues of $130M. Its shares out versus float are near-parity.
Foreign licenses on proprietary products also figured into American Superconductor (AMSC) http://www.amsc.com/ this week. The stock trades on the Nasdaq in the $25 range.
AMSC licensed its proprietary 2 megawatt (MW) doubly-fed induction wind turbine design to Inox Wind Limited, part of India's Inox Group of Companies. The license provides Inox with the right to manufacture and sell the wind turbines globally.
Inox is AMSC's second wind turbine manufacturing customer in India. In 2008, AMSC licensed a 1.65 MW wind turbine design to Ghodawat Industries (India) Pvt. Ltd. Ghodawat plans to enter into commercial production of these wind turbines by the end of 2009. This week on the new licensing deal the CEO of AMSC said, "We view India as a tremendous growth opportunity for all AMSC products and similar to our strategy in China, we have entered India through the wind energy market, which not only provides us with a growing stream of revenue, but also provides a concrete rationale to establish our in-country base of operations and contacts."
If anything goes wrong in the Clean-Tech endeavor, AMSC is going to want the U.S. courts to back up their claims and agreements. AMSC has a market cap of $1.11B and is trading above both its 50-day and 200-day moving averages. AMSC has trailing twelve month revenues of $182M and its shares versus float ratio is close enough to parity for stability.
The soaring stock based on cross-licensing and patents this week is SanDisk (SNDK) http://www.sandisk.com/ trading on the Nasdaq in the $15 range.
What sent the stocks up was the SNDK news that the Company had signed a definitive agreement to renew the cross license of their semiconductor patent portfolios. In addition, the companies signed a flash memory supply agreement under which Samsung will continue to make available to SanDisk a guaranteed portion of its flash memory products.
SNDK has a market cap a little larger than the average Small Cap, but only by a little. Its intraday cap was $3.58B on trailing twelve month revenues of $3.16B. At $15, it's about half of its 52-week high of $29.29 on 06-04-08 and is above its 50-day and 200-day moving averages. Its shares out and float are near-parity.
And to end on an up note (see the chart below) the headline says it all: "Macrovision Licenses Its G-GUIDE Mobile and Related Intellectual Property for One-Segment Broadcasting to Japan's Three Major Mobile Phone Operators."
Macrovision (MVSN) http://www.macrovision.com/ (trading in the $21 range on the Nasdaq) intellectual property not only includes program guides, but anti-piracy and content protection technologies and services, embedded licensing technologies, and media recognition technologies that deter unauthorized consumer copying of such programming on VCRs and recordable DVD devices.
The market cap of MVSN is $2.22B with trailing twelve month revenues of $410M. It has been setting highs in this price range, so now is not probably the best time to buy, but if its licensing endeavors continue, the $21 range may represent a threshold to be crossed to a $30-40 level.
