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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting
QCOM 179.02+3.7%Nov 5 3:59 PM EST
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To: carranza2 who wrote (57635)12/12/2006 8:50:37 AM
From: Clarksterh  Read Replies (1) of 196499
 
At the risk of getting circular, if a patent is essential because the standard does not work in its absence, it could be incredibly innovative, require tons of R&D expense, etc., yet still be comparable in value to one which is not particularly elegant or innovative but whose value is high only because it is essential to a standard.

First, if you believe this, then you should not be invested in Qualcomm. It is, literally, that simple. You should be invested in the companies that excel in the politics of standard setting. Qualcomm is good at that, and getting better, but other companies are definitely better. The companies with the better politics will always get in better numbers and in your book that is all that counts.

Second, this is incorrect. I.e. I make a standard engine and part of the standard is for a 3 inch rubber gasket (patented by company x) vs, say, a 4 inch silicone gasket. Clearly the engine will not work without the gasket. Clearly it is also true that the rest of engine-designed-to-the-standard cannot work with the 4 inch silicone gasket. But company y is the company that patented the whole concept of pistons. Both are 'essential' to the standard in the sense that the standard cannot work without them. But are they really equal? THAT is the point of the referenced paper which you seem to have missed - they are not equal. Much of what is 'essential' is arbitrary and political. Should that be accorded as much weight as something which HAD to be used.
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