Even if a CDMA patent expires, newer products involving that patent may also contain newer patents that build on the older processes
well, it is the old patents that are the key as i understand it. the ones "without which CDMA cannot be done". lots of cos can file CDMA patents now, so it all comes down to cost of capital for R&D and i don't give QCOM any edge there. it is rather the key patents that allowed them to opt out of the patent pool that are in question. once they expire, what is to stop cos from dropping their CDMA licenses and renegotiating any other QCOM IPR. also, once the key patents expire, even if all the old cos had to keep paying 5% royalty, what is to stop new cos from entering the market without licenses and operate with a 5% cost advantage--seems like a pretty big advantage in any industry where many cos have single-digit margins.
to me, that is a key difference between QCOM's patent-dependent model vs the platform and product-suite model of MSFT. i can see how MSFT can continue with their model into the future, because Windows does not "expire" although it evolves.
Meanwhile, several new drugs apparently do a better job on ulcers, heartburn, and acid reflux, and those newer drugs still carry patent protection.
actually, a lot of the new drugs are only marginally better than the old ones (despite lots of R&D). e.g., there is a successor to Claritin which is a whopping 3% more effective. whoopty-doo! does not sound like something i would pay extra money for. the WSJ had a good article recently on the problems faced by big pharma in the face of expiring drugs.
you have the additional problem that older patents used alone may become obsolete
well, different cos are going to have these little "dribs and drabs" IPR. e.g., somebody's probably got patents on polyphonic ringers, somebody's probably got patents on predictive text input. the thing that set the rake receiver etc. apart was that they were key to getting the air interface, i.e., CDMA communications itself, to work. i think that's in a different class than bells and whistles IPR. and apparently the rest of the world thinks so to, since QCOM is still at 9.41x sales and has all these fat royalty agreements with the manufacturers. the phone makers didn't sign those agreements because they are long QCOM stock. they signed them because they needed the air interface patents to make their phones work. once those patents expire, why do they need to pay QCOM 5%? that is the $64,000 question in my book.
all JMHO and i could be completely wrong. |
