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To: JMD who wrote (8149)7/30/2000 3:07:16 PM
From: Don Lloyd   of 10309
 
Mike -

[...I have absolutely no idea why a Qualcomm customer or Qualcomm itself will be liberated to cross-license GSM IPR holders as a result of this Spinco action. Can you explain it to me?...]

It would be SPINCO that is free to cross license to enable it to build parts including GSM.

For a new customer that has GSM IPR and needs CDMA rights, it previously might have needed 10 items from QCOM for $10 in royalties. If it felt QCOM needed GSM IPR, it might have tried to bargain the net cost down to $5 and GSM rights.

After QCOM spins off SPINCO, and gives it 2 of the 10 CDMA items that the new customer needs, the new customer will still need to pay the full $10 to QCOM for the remaining 8 CDMA items, and will have to enter a royalty-free cross license agreement with SPINCO for the remaining 2 in exchange for the GSM that SPINCO needs, but that QCOM doesn't (because it no longer manufactures anything in this area).

Regards, Don
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