Ralph
01 COMMUNIQUE LABORATORY ONE-T, $0.38 June 04, 2014 Rating: STRONG BUY Target Price: $1.50 Market Capitalization: $24.8M Risk Profile: SPECULATIVE TECHNOLOGY– IP LICENSING Ralph Garcea, P.Eng, MBA – Analyst 647.776.1763 • ralphg@globalmci.com LOGM APPEAL HANGS ON WHO BUILT THE BRIDGE? EVENTS We attended the oral hearing in the LogMeIn (LOGM-US, Not Rated) appeal in the US Court of Appeals for the Federal Circuit (CAFC) that took place on Tuesday, June 3, 2014, in Washington, DC. The hearing was presided on by Judges Prost, Bryson and Moore. IMPLICATIONS Positive. ONE filed a notice of appeal in the LOGM case on June 26, 2013. Although it has taken almost a full year, ONE finally had its day in court to argue that LOGM does indeed infringe its “479” patent. Both sides had ~20 minutes to present their cases; with ONE having a ~3 minute rebuttal at the end. If ONE is successful in its appeal, we expect the CAFC to overturn the non-infringement verdict and send the case back to trial in Judge Hilton’s District Court for damages. Although LOGM could appeal the CAFC decision, we believe a ONE victory would increase the likelihood of a LOGM settlement. More importantly, with a cash burn of ~$400K/qtr, ONE has ~1.5 years of runway to pursue the Citrix (CTXS-US, Not Rated) and LogMeIn cases. ONE will need to monitor its expenses closely as it continues to defend its IP ─ without the need to raise capital