Nokia opens another front against Qualcomm in IPR fight
Mon, 19 Mar 07 1:15 PM
Nokia's latest foray is consistent with varied ongoing court actions, including Interdigital, to reduce cumulative IPR royalties. The lead role of one company in all these actions raises the question, why Nokia?
Nokia is cherry picking certain patents, as part of a scheme which appears to eminate from the alleged abandoned 2002 IPR royalty cap proposal. In this regard, the cap proposal as set forth by appearance could be readily construed as price fixing, thus Nokia and others had no recourse but declare abandoned.
However, Nokia's court assault on Interdigital and Qualcomm suggests that while the cap proposal per se may have been abandoned, the declaratory intent from the 3G onset to cumulatively cap 3G WCDMA IPR royalty rates is alive and well. From an anti-trust perspective, the issue in combined court offenses against Qualcomm and Interdigital is the roles of other players.
In Qualcomm's case, the others were largely licensed, eliminating any semblance of collusive anti-trust involvement. However, in Interdigital's case, the company's belief that NOKIA has affected willingness of others to license is a different matter.
A few brie3f extracts on price fixing...
"When a group of firms colludes on price, the industry price will rise even when there are some firms that do not participate in the conspiracy. If the government or private parties file antitrust suits, the noncolluders face the problem of establishing their innocence since their prices rise along with those of the colluders."
In this instance, an example of collusion would involve an agreement by certain companies to remain unlicensed in support of another's attempt to set an upper limit on 3G FRAND IPR royalties. Inasmuchas as a NOKIA proposed cumulative IPR royalty threshold was clearly intended to establish the outer limits at 5% of handset cost, one central question emerges: did certain other manufacturers including those agreeing to support the cap proposal assist NOKIA's ongoing effort to reduce 3G IPR royalty rates to Interdigital by remaining unlicensed?
In this context, "Section 1 of the Sherman Act (15 U.S.C. § 1) prohibits any agreement among competitors that unreasonably limits competition". In the case of Interdigital, their ability to compete and advance air interface technologies is directly dependent on derived licensing revenues. Any agreement by certain companies to remain unlicensed (with Interdigital) over extended periods of time, given the original intent to cap/fix/set maximum IPR royalties, could be construed as collusive. "Agreement is the essence of a Section 1 violation."
The alleged stated intent in the below article to seek a much lower IPR royalty rate for Qualcomm is not an isolated event. Conversely, this particular court action when viewed in totality with other court actions initiated by NOKIA against Qualcomm and Interdigital paint a different picture. The only missing component with respect to Interdigital is an open declaration by certain unlicensed manufacturers to remain unlicensed with Interdigital until NOKIA runs the full gamut using US and international courts to attain to the extent possible, a FRAND IPR royalty rate that is more closely aligned with the 2002 statement of original intent, i.e. to cap cumulative 3G WCDMA IPR royalties at 5%.
In essence, the cumulative cap involves not one but two separate actions against two non-manufacturers, neither of which can benefit from DOJ/EU approved cross-licensing.
"Elements of a Section 1 Offense. Criminal prosecution under Section 1 of the Sherman Act requires only the existence of concerted action in restraint of trade — specifically, an agreement among competitors to fix prices, rig bids, or allocate markets. The agreement must be between two or more independent business entities or individuals. No overt acts need be proved, nor is an express agreement necessary. The offense can be established either by direct evidence from a participant or by circumstantial evidence (such as bids that establish a pattern of business being rotated among competitors). The conspiratorial agreement must occur in, or affect, interstate or foreign commerce."
Draw your own conclusions. |
