Victory in Citrix case would be a windfall for 01 Communique, says Garcea

Analyst Ralph Garcea estimates that more than 70% of the estimated $1.7-billion in online services revenue Citrix has generated since 2006 could be infringing 01 Communique’s ”479 patent. Global Maxfin Capital analyst Ralph Garcea says 01 Communique (TSX:ONE) could be in for a windfall if they can convince the judge to lift the stay in its case against Citrix.

Yesterday, 01 Communique announced that the Patent Trial and Appeals Board had rendered its decision affirming the Examiner’s finding of validity of the company’s patent number 6928479 (its “479 Patent”).

On May 8th, as part of a trial that was originally filed in 2006, an oral argument at the U.S. Patent and Trademark Office was held in respect of an appeal by Citrix of the results of the reexamination of 01 Communique’s ‘479 Patent. Yesterday’s decision was a victory for the Mississauga-based company, and sent its shares to a more than 100% gain, before a slight retrace today.

Garcea says if the judge lifts the stay, a large portion of Citrix’s recent revenue will be in play. He estimates that Citrix has generated more than $1.7-billion in online services revenue, which includes products such as GoToMeeting and GoToMyPC, since 2006, and that more than 70% of that could be infringing in the ‘479 patent.

The Global Maxfin analyst says a win for 01 Communique could result in a lump sum payment of $50-150-million. He then attributes another $15-30-million in revenue to 01 Communique, depending on the royalty rate, for the next nine years.

In a research update to clients this morning, Garcea reiterated his STRONG BUY rating and one-year price target of $1.50 on 01 Communique.

Shares of 01 Communique closed today down 7.3% to $.38.

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Disclosure: Cantech Letter’s Nick Waddell purchased 35,000 shares of 01 Communique at $.235 on March 28th.