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To: Mekopelet who wrote (12625)10/5/2017 2:04:24 PM
From: I'manoledguy
   of 13884
 
Mekopelet. Well aware of those early litigation's mostly in Europe. Just wanted to add that one player involved was BASF---we know their fate.

It is also worth mentioning that part of the Samsung agreement and LG's is that if either buy chemicals from another source that violates UDC patents UDC can completely stop selling to them. This would also mean that any patents UDC owns involving architecture or manufacturing methods would also be revoked. A nice insurance policy.

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To: I'manoledguy who wrote (12626)10/5/2017 2:19:08 PM
From: handyman
   of 13884
 
The miners are lining up as UDC sells them the picks and shovels.?

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To: slacker711 who wrote (12624)10/5/2017 3:40:34 PM
From: litespeed2011
2 Recommendations   of 13884
 
In my mind UDC has greater leverage in getting the sweetheart deal this time.

At the get-go when Samsung was the only play in town, there's not much leverage.

But today it's different. As handyman pointed out (and actually I do like the pick and shovel description because it's easy to understand), folks are lined up at the door to get a piece of the action.

And the UDC strategy of maintaining a large cash stockpile will help in achieving a happy ending for the negotiation story.

Why? If things truly come to a stall, which I don't think it will and UDC is 'forced' to play hardball which again is a low probability event, which company has more to lose by digging its heel in the ground?

UDC can go without Samsung for a year with its cash and revenue from LG. How long can Samsung hold out not being able to sell phones and screens given all it's capital expenditure? And if Samsung can't deliver to Apple, Apple will sue.

There are other girls on the dance floor now. UDC can pick and choose. Of course being the respectful business folks that work at UDC, UDC team will seek to achieve amicable terms without Samsung feeling that it's been cornered into the terms and conditions because after all, who doesn't want a long-lasting mutually beneficial business relationship?

Samsung management on the other hand, should learn from its LG brethren (they missed the first lesson on how to build OLED TV and here's an opportunity to not fumble on a major decision) and be wise about signing on to reasonable terms so that it doesn't end up on the dance floor, alone.

The only thing I'd ask UDC mgmt team to remember is follow Teddy Roosevelt's style of diplomacy where one "speaks softly, but carry a big stick".

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To: litespeed2011 who wrote (12628)10/5/2017 3:47:39 PM
From: handyman
   of 13884
 
I echo all your sentiments. Samsung would have to be nuts to pass on 4 nil for what?

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To: litespeed2011 who wrote (12628)10/5/2017 4:01:06 PM
From: slacker711
1 Recommendation   of 13884
 
I would note that everything that you said was true in 2011. Samsung had spent billions on their Gen 5.5 fabs and was preparing for the launch of the Galaxy S3 which I believe was the best selling Galaxy handset of all time. Samsung is making far more on OLED's now but they are making less on handsets.


Also, UDC's patent with the widest coverage still had over five years of life left. Despite that, UDC settled for a "no-downside" agreement.

How long can Samsung hold out not being able to sell phones and screens given all it's capital expenditure?


So we know for a fact that nobody in the industry, regardless of patents, can supply commercially viable emitters?

If yes, then UDC should raise the royalty rate substantially and go for a 6+ year license.

If no, then it becomes a balancing act with Samsung and UDC trying to figure out how much risk they are willing to take to get better terms.

I think it highly probable that Samsung will sign. However, IMO the idea that there is zero risk that this goes into litigation or even a one year agreement shows too much confidence into negotiations where we have little insight.

Slacker

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To: slacker711 who wrote (12630)10/5/2017 4:39:38 PM
From: Cooters
3 Recommendations   of 13884
 
IMO you've made the critical points but I'm going to frame the argument differently, and it hopefully will highlight why I believe we are likely to see this drag into 2018 and get rather......contentious...

The leverage in this negotiation is not based on one fulcrum because it is not based on one moment in time, it is a moving and fluid target. I'll narrow it for sake of argument to a day in each of the 5/6 years we hope the agreement spans.

- 7/1/18 - I would consider Samsung's leverage virtually zero, almost laughable, they cannot produce a commercial OLED without a license and UDC emitters.

- 7/1/19 - Ligands patents still valid, very unlikely but not impossible that commercial TADF emitters could be available. Still major advantage UDC.

- 7/1/20 - Now we are getting to a situation. Ligands patents begin to expire. TADF emitters are much more in the realm of reality, remembering we are speculating about their availability today. Advantage UDC.

- 7/1/21 - New world. Ligands patents expired or expiring worldwide. Are we relying on the 4000 patents now? Still betting TADF is not a viable option? IMO we have arrived at Advantage Samsung.

- 7/2/22 - Advantage Samsung

Note when I say Advantage Samsung I am talking in a negotiation. What actually transpires will come to pass in the fullness of time. What Samsung has to accept for a one year extension is not what they have to accept for a 6 year deal.

Cooters


PS - And also note the patent leverage was much stronger in 2011 and we know what we got.

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To: slacker711 who wrote (12630)10/5/2017 4:47:24 PM
From: Prophet3200
   of 13884
 
Thank you Slacker. I agree completely...

I would go a step further to say that UDC's management team is the company's largest liability in its negotiations with Samsung. They have a history of giving away the company's tech for way to little!

To illustrate my point I suggest a comparison between the UDC's "value add" vs. UDC's "value received". UDC's technology adds 3x to power efficiency, much longer lifetime, cool operation (no heat sinks), flexible form factors etc. The company receives less than 1% of panel sales in combined material sales and royalty/license fees.

I know that we have discussed this in the past.... this is among my largest frustrations with UDC!

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To: Cooters who wrote (12631)10/5/2017 4:58:55 PM
From: Prophet3200
2 Recommendations   of 13884
 

The leverage in this negotiation is not based on one fulcrum because it is not based on one moment in time, it is a moving and fluid target. I'll narrow it for sake of argument to a day in each of the 5/6 years we hope the agreement spans.


Adding to your list, UDC has some tech in its pipeline that, if realized, could swing the advantage back heavily in their direction for 2021 and beyond (manager materials, blue PHOLED, etc....)

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To: Prophet3200 who wrote (12633)10/5/2017 5:04:34 PM
From: Cooters
   of 13884
 
Adding to your list, UDC has some tech in its pipeline that, if realized, could swing the advantage back heavily in their direction for 2021 and beyond (manager materials, blue PHOLED, etc....)

Correct, that makes this even more complicated, as Samsung must contemplate inventions that have not yet happened and factor those into their negotiations. On the flip, remember UDC is not the only company working on new things.

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To: Prophet3200 who wrote (12633)10/5/2017 5:05:10 PM
From: RitzHuskie
   of 13884
 
One thing that may be a wild card in the negotiations....Since Samsung is currently having there rear end handed to them in T.V. development. What if they are considering developing an OLED T.V., which they may be? My bet is that does happen in the next 2 years. I think both companies are considering that when they are at the table.

There may be other hardware apps as well, refrigerators, washing mashings, monitors, etc. that all have Samsung OLED screens. Lots to consider. Definitely a different time than the last negotiation.

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