C2, the part that gave me the creeps, which I didn't know about, is patent exhaustion. I need to think a lot about that one.
qualcomm.com While I didn't panic, I did need a lie down and nice cup of tea. I should ask Google what it knows about patent exhaustion.
Imagine if Texas Instruments explains that they have agreed to an intellectual property swap with QUALCOMM, so the ASICs are royalty-free when they sell them to the cyberphone maker, who then informs QUALCOMM that the patents are exhausted because Texas Instruments has fully-paid for the patents included by way of quid pro quo of like for like, without exchange of cash. The phone maker doesn't need to pay QUALCOMM anything because Texas Instruments has done the paying already. The phone maker then sells their phone components to a notebook computer maker who sells CDMA-enabled notebook computers. The notebook maker also tells QUALCOMM that they don't have to pay anything because Texas Instruments did all the paying necessary.
So, QUALCOMM would be paid no cash, but would be free to compete with Texas Instruments for the business. But Texas Instruments might bundle a bunch of other stuff, which QUALCOMM doesn't have, to the phone maker. So QUALCOMM doesn't even get a chance to quote [not much of one anyway].
QUALCOMM would make no money on royalties and sell no ASICs. That would not be good for either my share price or dividends.
This can't make sense because I am sure that Texas Instrument's lawyers, and swarms of other lawyers, would already be all over this like a rash - being worth $1000 an hour, and as you say, you can't pay too much for good lawyers. So it is simply not possible that such an obvious issue as patent exhaustion has been overlooked by a horde of legal eagles. That's a fundamental thing to over-look. Which is not to say that people don't overlook such things, even if they are paid $1000 an hour. But that bloke [who wrote the article] seemed to me to have an uncommonly good insight into the whole business.
What say you about patent exhaustion? If QUALCOMM was to up their bid to $2000 an hour, that should upend the patent exhaustion argument. Though maybe it would take $3000 an hour to stop the patent exhaustion argument.
Mqurice |
