I'm not sure what 'justifiable' means to you. It might mean something different to me.
No question about that. And I listen closely to your knowledge-based view with only partial confidence in my shallow nose for these complexities.
My qualification was "'purportedly' justifiable". The justification is the review as laid out by what looks to me to be a worthy panel.
Does this look like some degree of clarification to you, or unrepentent bs from Mr. Altman, or misinterpretation by Mr. Mullens?
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From: Jim Mullens 5/5/2005 2:51:38 PM
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05 05 05 QCOM Spring Mtg Steve Altman
Steve Altman on cross-licenses and 3rd Party IPR pass-thru.
Steve addresses this issue during his prepared presentation and also during the Q&A from a couple of analysts. The IPR/ royalty rate issues continues to surface as we’ve recently seen statements from Paul Sagawa (and others) re: Nokia’s WCDMA “advantage” (up to 20%) relative to new handset companies without trade able IPR.
FAQ from Altman’s presentation
“If an OEM sells phones with Q WCDMA or CDMA2000 chipsets/software, are they less exposed to IP challenges from other parties?”
Answer- Yes.
<<<<<<<<<<<<<<<<<<
Altman provided more detail during the Q&A- This is my understanding from listening to Altman’s comments.
1. Not all, but most- 90 – 95%, almost 95% of the Q’s cross-licenses provide a royalty free pass-thru clause. Thus, a handset manufacturer using Q’s chipsets would have royalty free access to IPR of about 95% of companies that have signed licenses with Qualcomm (there are between 120 -130 Q licensees).
2. Those companies that do not have the 3rd party pass-thru provision with the Q, then negotiate their license fee/ royalty rate with the handset manufacturer independently. In these few these cases, the Q’s licenses have a cap rate which limits the rate at which the cross-licensee can charge Q’s handset partner. Altman then stated that that rate is “much lower” than what that handset manufacturer could have otherwise be subjected to.
So perhaps, the 20% Nokia advantage, as Sagawa suggested, may be much less for the Q’s chipset customers.
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