Wi-LAN will win case against Apple, says Industrial Alliance’s Nagaraj

Coming off a disappointing outcome in its trial against Alcatel Lucent, Ericsson, HTC, and Sony in Texas, its lawsuit against Apple is the next major catalyst for Wi-LAN (Wi-LAN Stock Quote, Chart, News: TSX:WIN), says Industrial Alliance analyst Al Nagaraj.

On July 15th, shares of WIN were hammered after the company announced that a trial jury in its litigation against Alcatel-Lucent USA Inc., Ericsson Inc., HTC Corp. and Sony Mobile Communications in the U.S. District Court for the Eastern District of Texas, Tyler Division, determined that the four patents in suit were found not infringed.

While a disappointing result, Nagaraj notes that case pertained to just four of the more than three-thousand patents that Wi-LAN owns. What’s more, the Industrial Alliance analyst expects that Wi-LAN will appeal the verdict and relaunch trials against many of the defendants.

Nagaraj notes that Wi-LAN’s management believes the March ruling from its Markman Hearing in the Apple case was favourable. He believes Wi-LAN will win the October trial and that this will be a key positive catalyst that will make the Texas result a distant memory.

In a research update to clients this morning, Nagaraj reiterated his BUY recommendation and $7.70 one-year target on WIN.

On August 8th, Wi-LAN will report its Q2, 2013 results. Nagaraj believes Wi-LAN will lose $1.1-million, or a penny a share, on revenue of $18-million, a topline that would be down 13.5% year-over-year. He says the difference will come from increased litigation expenses during the quarter.

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