Limits On W-CDMA License Fees Floated
wirelessweek.com
November 22, 2002 12:00am
PBI Media, LLC
Wireless Data News via NewsEdge Corporation : Vol. 10 No. [Copyright 2002 PBI Media, LLC. All rights reserved.]
Another unsolicited invitation from wireless infrastructure vendors for their competitors to limit licensing fees for next-generation technologies has arrived at one of those competitors with all the appeal of rotting fish. This time, it's InterDigital Communications [IDCC] declining the invitation to limit intellectual property royalties for wideband-CDMA handsets or infrastructure.
"This doesn't change it one way or the other," Guy Hicks, InterDigital's vice president of communications and investor relations, tells Wireless Data News. "The question is, do you have essential intellectual property. If the answer is yes, we believe the company that has it should be appropriately compensated."
Ericsson [ERICY], Nokia [NOK], NTT DoCoMo [DCM] and Siemens [SI] early this month agreed to promote licensing for essential W-CDMA patents at rates "proportional to the number of essential patents owned by each company." The companies say they intend "to set a benchmark for all patent holders of the W- CDMA technology to achieve fair and reasonable royalty rates."
The companies say their agreement means that any company manufacturing wireless phones and network infrastructure compatible with the W-CDMA third- generation technology will pay patent holders less than 10 percent of the sale price of the product in royalties. Those royalty levels have been expected to reach 25 percent.
Ericsson, Nokia and Siemens are pushing to accelerate W-CDMA deployments because they have invested heavily in the technology, which will be the 3G interface for most European networks as well as for a substantial number of carriers in other markets. However, W-CDMA device and infrastructure developers trail their rivals on the CDMA2000 side of the 3G fence in producing working networks and devices.
In May this year, Nokia on its own advocated an industry-wide commitment to limiting intellectual property royalties to 5 percent of the price of W-CDMA devices or network gear. At that time, it was Qualcomm [QCOM] who spurned the invitation. (WDN, May 22, 2002) "Qualcomm will not agree to any such arbitrary cumulative limit on royalties," Qualcomm told Wireless Data News.
Like Qualcomm, InterDigital owns extensive intellectual property rights in the CDMA space. As well, Hicks says, the company made hundreds of contributions to the W-CDMA standard development process, with some 400 accepted and included in the standard.
"We understand we need to provide that intellectual property in a non- discriminatory way, but we also expect to be appropriately compensated for the contributions that we make," Hicks adds. "If companies build to the standard and thereby use the intellectual property that we developed and contributed, then we expect to be appropriately compensated for those contributions."
InterDigital also expects its patents will come into play in production of TD-SCDMA (Time Division-Synchronous Code Division Multiple Access) devices and network gear. China plans to use TD-SCDMA, a narrow-band version of the wideband 3G CDMA technology, as its own 3G standard, and expects to pay little or no royalties to CDMA patent holders.
>> Guy Hicks, guy.hicks@interdigital.com.<< [Copyright 2002 PBI Media, LLC. All rights reserved.]
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