In an unexpected victory for small-cap communications company ParkerVision Inc. (PRKR) , a judge ruled on Oct. 17 that Qualcomm Inc. (QCOM) had violated one of its patents. Trading was stopped following the announcement, as the company’s shares blew up and at one point had gained 73 percent in value.
ParkerVision has not manufactured a significant product for years, with their last successful release being a studio camera they sold off for $15 million in 2004. Since then, the company has lost money for most of the decade, as investors clung to the hope that the patent infringement case would bear fruit.
ParkerVision is worth less than a tenth what it was in 2001, and has been repeatedly diluted by share offerings. But with ParkerVision winning the case and reportedly seeking $500 million in damages, it looks like the company’s long-suffering investors might be right.
As ParkerVision has morphed from a communications company to a professional Qualcomm litigator, the company has been slapped with the pejorative “patent troll” by publications like Motley Fool. After all, the company had not turned a profit in 20 years, with the Qualcomm suit looking to be the only thing that could save it.
However, some analysts have disputed labeling ParkerVision's motivations as unethical, maintaining that Qulacomm had indeed infringed on a technology invented by ParkerVision. Dan Ravicher, a patent lawyer who attended the trial, said “ParkerVision is not a troll, as this is their only suit. They tried to work with Qualcomm first, and the patents are their own that they invented.”
The patent case in question centers on a chip widely used in smartphones that Qualcomm currently licenses out to a variety of major hardware manufacturers.
Anticipating the share explosion, trading was halted just prior to the verdict, when shares were down 6 percent. When trading resumed at 12:55 PM ET, shares went through the roof at ten times normal volume.
ParkerVision shot up 70.38 percent on the major victory to hit $5.74 a share.
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