Rich, just another rant. There are things about QUALCOMM which have always annoyed me as I like things to be as open and honest as possible.
The most basic and ridiculous is the concealment of royalties paid. Never has the official standard rate been disclosed. If that's not a criminal act, I have no idea why.
It automatically makes any buy or sell by those inside the knowledge barrier insider trading, using information not available, by deliberate concealment, to the general public or even to others in the company.
I can only think the reason for that is dishonest, or at least, the irritating unnecessarily secretive nature I have seen so often in companies and individuals.
It might be that individual companies being negotiated with for the one, true, global, standard rate, want their special non-standard rate to be kept secret. But that wouldn't stop QUALCOMM giving total royalties paid and how many phones they are selling and the average royalty rate they are collecting, including an estimate of the offset value of the patents they swap [which there are NONE of in the case of Nokia].
It's not as though royalties are a small part of the company's business. The patent wall is there because the patents are what it's about.
It's one thing which has really annoyed me and made me mistrust the purpose of QUALCOMM. I dislike secrecy and believe the motivations of people who are secretive are bad. They are using their power to get things away from other people and maintain more control than they should, just to clip the ticket and maintain their power to the disadvantage of others.
I'm surprised that it's legal in the USA, given how many things are illegal [which shouldn't be].
Anybody in the company who knows the royalty rate should never have been allowed to sell a share as that makes them ipso facto inside traders.
It's only because of leaks of information by people who shouldn't have given information [apparently, if the secret agreements really say what we are told they say - why not put them on the website for everyone to read?]
I can't think of any reason why a LOT of informaton about royalties can't be given.
Why is the maximum a state secret? Is it $500? $1000? $10,000? Maybe it's only $200? What a disaster if that's the case. Is it inflation indexed? Is it the median of all cellphones sold under QCOM licence? Is it really necessary for insiders to have that information and keep it secret from their counterparties when they buy, or much more normally, sell?
Is QCOM really just a pack of thieving insider trading crooks? Can they spell Glasnost? Why was Andrew Viterbi so cagey about QCOM OFDM patents when asked at the AGM? Did he want to take the ideas to Flarion? Were they working on things they didn't want to be known 'out there'? Were they flat-footed and in trouble from OFDM competitors?
And how come it was such a state secret, good for insiders to know, but not shareholders, that the handset, infrastructure and Leap Wireless businesses were not real businesses, but just temporary market-seeding cost centres for QCOM and training grounds for their partners [Nortel, Sony]? Shareholders were left in the dark thinking these were actually going to do something good. I dare say the employees were not in on the game either. When the infrastructure employees were sold down the river, they didn't like it. They thought they had joined QUALCOMM, but they hadn't. They had been conned.
Supposedly valuable people, like Paul Jacobs, were kept on, moved back into the company, after losing a lot of money as planned, so they could do strategic investments and stuff, and dabble in the big time. So far, the share price has not reflected well on the current management.
But at least QCOM has got really, really clean hands, and has said that QUALCOMM is NOT using any Nokia patents. That's great, because it means that Nokia has got really filthy dirty hands and QUALCOMM is as pure as the driven snow, using zero claims of any Nokia patents.
Imagine the consequences if QUALCOMM went into court and Nokia showed that contrary to QUALCOMM's claim that they are NOT using any claims of any Nokia patents, in fact not only is QUALCOMM using some claims of some patents, without a licence, but KNEW they were doing so.
That would mean QUALCOMM has got really dirty, filthy, hands. It would mean they KNEW they were using they Nokia patents. It would mean triple damages for the 16% regular GSM royalty [counter-parties paying the bundled total rate, whether they use one claim of one patent or the whole GSM enchilada]. So QCOM would owe 3 x 16% = 48% on the GSM patents and 7% on the W-CDMA technology [total W-CDMA being 12%, less 5% of which is QCOM, if we believe the secret information which we are not allowed to know].
The court and jury would perhaps award QCOM 3% royalty from Nokia, or 2.5% or whatever China is paying, which of course is a secret as quid pro quo. So QCOM would owe a net very large amount to NOK.
Or they might simply wash their hands of it, saying that QUALCOMM's hands are too dirty and filthy and Nokia and QUALCOMM don't have to pay each other any royalties at all.
Or maybe QCOM will not be allowed to use Nokia's patents, but Nokia will be allowed to use QCOM's.
Anyway, the patents are exhausted anyway, once they are used inside an ASIC, so there are no royalties payable on handsets. The patents which aren't dirty-handed, insider-traded or freely-traded, are "paid-up", or expired, so again, no royalties.
Mqurice
PS: My best round ever = 73. Now mid 90s to low 100s due to lack of playing. Good luck with making your dreams reality. |
