We are bullish and current shareholders of Tekna as we believe the Company is in the early innings of a multi-year super cycle as demand for their advanced metal materials and PlasmicSonic systems grow across applications in 3D printing, consumer electronics, aerospace, and medical.
Very good outcome for Tekna. The court found AP&C's patent too ambiguous, making it “impossible for the skilled person to know in advance whether or not something would be within the claims”.
The risk:reward seems way better today at 6 NOK than where it lingered over the past few weeks. I bought some shares today.
The verdict is confidential, so who knows which way it went. Not sure why it is taking the company this long to notify the market, but I guess we will know soon...
I like to gamble as much as the next guy, but I don't think you are getting paid to take this risk.
Assuming you are right that the outcome is essentially a coin-flip, the upside needs to far exceed the downside to make this bet worthwhile.
You hypothesize a 70% relief rally if they win. I say 20% tops, and not immediately. Who will be relieved? No one is paying attention! The risk was glossed over in the prospectus and hasn't been mentioned in the last several earnings calls. The lone analyst covering the stock seems to have forgotten about it, and as far as I can tell, this is the first time you mention it. You and I might be relieved, but even in this illiquid stock, that won't be enough to fuel a rally.
Losing, on the other hand, could be catastrophic. You say they probably have workarounds. The company's prospectus says they may need to relocate if they lose. But to where? AP&C has equivalent patents that are either granted or pending in all relevant jurisdictions. So a workaround would likely require changes to the production process, which would probably trigger a need to requalify their processes with hard-won customers.
While the listing prospectus only refers to the risk to their titanium powders, the court documents filed by AP&C list a range of different metal powders that allegedly infringe their patent. They also claim that Tekna induced infringement by training and assisting purchasers of their plasma systems to use them in a manner that infringes the patents. So, in short, their whole business is at risk.
To me, this looks like 20% up if they win, 50-100% down if they lose. On even odds, I'm not taking that bet.
Also, while your guess at the verdict is as good as mine, each day that goes by with no news makes me revise my expectations downwards. They have known since last week. If the news were good, don't you think they would have told us already?
One last thing: I'm also not a lawyer but my understanding is that in Canada verdicts, even those involving IP, are generally accessible to the public. The fact that this one is (so far) being kept confidential makes me think we're looking at some sort of compromise. Perhaps the parties have been instructed to negotiate a licensing agreement? If so, Tekna isn't negotiating from a position of strength.
Very good outcome for Tekna. The court found AP&C's patent too ambiguous, making it “impossible for the skilled person to know in advance whether or not something would be within the claims”.
The risk:reward seems way better today at 6 NOK than where it lingered over the past few weeks. I bought some shares today.
Looming is a bit of an understatement, as the verdict was delivered last Friday: https://www.ippractice.ca/file-browser/?fileno=T-126-19
The verdict is confidential, so who knows which way it went. Not sure why it is taking the company this long to notify the market, but I guess we will know soon...
Looks like the verdict is in Tekna's favor. See entry dated June 26th in the link above...
Tekna has also issued a stock announcement regarding this win at https://newsweb.oslobors.no/message/622512
I like to gamble as much as the next guy, but I don't think you are getting paid to take this risk.
Assuming you are right that the outcome is essentially a coin-flip, the upside needs to far exceed the downside to make this bet worthwhile.
You hypothesize a 70% relief rally if they win. I say 20% tops, and not immediately. Who will be relieved? No one is paying attention! The risk was glossed over in the prospectus and hasn't been mentioned in the last several earnings calls. The lone analyst covering the stock seems to have forgotten about it, and as far as I can tell, this is the first time you mention it. You and I might be relieved, but even in this illiquid stock, that won't be enough to fuel a rally.
Losing, on the other hand, could be catastrophic. You say they probably have workarounds. The company's prospectus says they may need to relocate if they lose. But to where? AP&C has equivalent patents that are either granted or pending in all relevant jurisdictions. So a workaround would likely require changes to the production process, which would probably trigger a need to requalify their processes with hard-won customers.
While the listing prospectus only refers to the risk to their titanium powders, the court documents filed by AP&C list a range of different metal powders that allegedly infringe their patent. They also claim that Tekna induced infringement by training and assisting purchasers of their plasma systems to use them in a manner that infringes the patents. So, in short, their whole business is at risk.
To me, this looks like 20% up if they win, 50-100% down if they lose. On even odds, I'm not taking that bet.
Also, while your guess at the verdict is as good as mine, each day that goes by with no news makes me revise my expectations downwards. They have known since last week. If the news were good, don't you think they would have told us already?
One last thing: I'm also not a lawyer but my understanding is that in Canada verdicts, even those involving IP, are generally accessible to the public. The fact that this one is (so far) being kept confidential makes me think we're looking at some sort of compromise. Perhaps the parties have been instructed to negotiate a licensing agreement? If so, Tekna isn't negotiating from a position of strength.