A good '06 for ptsc, '07 EDIG's year?

One year after entering into the TPL agreement the fireworks were well under way for PTSC.

Wouldn't mind seeing the move in that direction over the next 12 months.

Patent Portfolio Licenses. Twelve new licenses were signed during the period from January through December 2006. They were a result of the joint venture that Patriot Scientific Corporation entered into with The TPL Group in June 2005 to commercialize the jointly owned patent portfolio. Licensees included leading electronics manufacturers with such well-known names as HP, Fujitsu, Casio, Sony, Seiko Epson, Nikon, Pentax, Olympus, Kenwood, Agilent, Lexmark, and Schneider Electric. By the end of the year, over 400 companies had been placed on written notice that they were likely infringers on one or more patents in the portfolio. Each of those companies is a candidate for licensing, and over 200 of them have already engaged in further communications with the licensing team.

In the month of February 2007 we were pleased to announce that two more names were added to the roster, as licenses were purchased by NEC Corporation and by Funai Electric Co., Ltd.

Commercialization of the portfolio is being exclusively handled by The TPL Group through Alliacense, their licensing enterprise. Alliacense has continued to expand its activities on behalf of the patent portfolio during the past year while adding to its team of licensing professionals as well as technical and support personnel. The growing worldwide pipeline of licensing candidates that are in various stages of dialogues with the Alliacense team includes the names of many well-known global manufacturing companies and product brands.

All fees from new licensees are paid directly to Phoenix Digital Solutions (“PDS”), the joint venture entity owned 50% by Patriot Scientific Corporation and 50% by The TPL Group. PDS collected over $108 million in total license fees for licenses signed in 2006. After allocation for expenses, the distributive share received by Patriot Scientific from PDS was over $48 million. Although most of the companies that have signed license agreements so far have qualified for discounted license fees for being early movers in their market segments, Alliacense has stated that future licensees in segments where early tiers have been captured are subject to progressively higher royalty rates.