I believe we have been assured that such determination will rest with the courts where VHC has made its claims. Of course, if our judicial system is clean, then right will out. Are we talking hundreds of billions here?
I should have commented on this earlier. VHC's licensing position appears to be much stronger heading forward into 4G than it was (is) for 3G. Looking ahead, the company should be able to secure licensing agreements with a significant portion of the marketplace - sans litigation. However, VHC investors should expect disputes and lawsuits to be a continued aspect of this investment. Not every company is going to play nice and agree to paying royalties at a fair market value. This is the nature of the wireless IP business. Anyone who invests in niche IP companies (VHC, ACTG, WILN, IDCC, etc.) should understand the business model and the need to defend key inventions. Take a good look around and you will see almost every major player involved in some form of patent dispute.
Companies can recognize the essential IPR of a competitor as being valid and also admit to making products that intersect those patents -- and still choose not come to terms. We have witnessed this time and time again. This game will continue to be played at an advanced level, and investors should not expect that everything will fall nicely in line. Specifically for VHC, I think it is a mistake to think that, going forward, the stock will unequivocally perform fantastically if the technology is validated (licenses, litigation resolutions, etc). The truth is that the technology is valid. The intellectual property is essential for 4G LTE/SAE. Patents pending and recently granted continuation patents will provide the company a strong position in 4G even if the current lawsuits for past infringement do not yield favorable results. Recognizing the company has a valuable, legitimate patent portfolio is the basis for making an investment in VHC. But the company still has to perform and execute its plan, and that execution must translate into real earnings (assuming they are not acquired by a larger company).
At this point, anyone invested in VHC should believe the technology is valid and the IPR is essential for 4G LTE. The risks that both investors and the company face are broader in scope than just a simple assessment of the underlying technology. The most important issue will be VHC's ability to monetize their patent portfolio. The volatile movement in the stock price this year is a reflection of the market's uncertainty regarding VHC's future earnings potential. VHC is still years away from significant 4G earnings and at best we are making educated guesses as to the rates the company will be able to secure and the quantities and expected shipment dates of covered products.
I am not sure who has forecast the "Hundreds of Billions" of dollars for VHC that you mentioned. To me, that's crazy talk. Best case estimates for 2014-2015 are approximately 150-200 million 4G device shipments (per year) which translates into a total market size of $30 to $50 billion. To illustrate potential revenue for this time period using the estimates above -- a simple 1% rate translates to a range of $300 to $500 million (per annum) for VHC. Which is rather significant for a company with a current market cap under $800 million. If VHC can execute their plan successfully, these would be fantastic revenue numbers. Additionally, there should be a great opportunity for revenue growth as LTE-A takes hold and begins to dominate the wireless market in the latter half of this decade. There are, of course, other revenue streams (SDNI, past infringement settlements, etc).
If one should buy now - there is no guarantee the market will not provide a much better entry point going forward. We are, after all, years away from the types of numbers being tossed around in this post. If one should wait to buy later - there is always the possibility that the investment will be much more expensive. But if one does not believe the technology is real and the declared IPR is indeed essential for 4G - one shouldn't be a buyer at all.
All IMHO.