Ericsson v. QUALCOMM (1996) and the '99 Acord
Hello Raymond,
Good to see you checking in.
<< If QCOM would have stopped WCDMA, Ericsson and Nokia would have stopped IS-95. >>
QUALCOMM almost did stop WCDMA, as least as an ITU sanctioned IMT-2000 3G standard. In the process they also almost stopped cdma2000 or any cdma based technology from becomming an ITU sanctioned IMT-2000 3G standard.
When in November 1998 the ITU told both Ericsson and QUALCOMM to settle their differences or there would be no 3G CDMA of any flavour, they weren't kidding ...
Message 19896950
Message 19893362
Common sense and pragnatism of the Stockholm and San Diego varieties prevailed.
<< Don't believe for a second that Nokia and Ericsson didn't had enough patents which was applicable on the IS-95 and the future CDMA2000 standards to stop them. >>
Ericsson's strategic IPR posture was considerably different than Nokia's in 1998/1999.
Nokia was probably hardly prepared to back up Ericsson in such an attempt. It wasn't that they didn't have some CDMA (as opposed to WCDMA) patents (although I really don't think they had many at that time), and it wasn't just because they were a considerably smaller company at that time than they are today, it was because their IPR posture was decidedly defensive rather than offensive at that time. They really weren't prepared structurally and resource wise to go on the offensive, particularly in the US, Korea, or Japan, where those battles would have to have been waged. They and Ericsson (and the Japanese) did challenge some QUALCOMM fundamental CDMA patents as they applied to WCDMA in both Europe and Japan but those challenges were unsuccessful.
<< This myth that Ericsson caved in during the trial back then is just a SI myth. >>
The 'capitulation' as it is often referred to here is certainly exagerated and IMO, a misnomer. The capitultion was QUALCOMM's. They capitulated to the ITU's mandate, abandoned their '5 Principes ' and agreed to abide by ETSI's IPR policy.
There's an above average treatment (best I'm aware of) of the Ericsson and QUALCOMM accord and the events that led to it from 1996 ff here ...
Message 22254700
I think its worth a review by all.
<< Ericsson won and got what they wanted a promise from QCOM not to obstruct anymore and a promise to be FRANDly. >>
I wouldn't say that Ericsson won (or initially that QUALCOMM won). I think both sides viewed it as a win-win when the deal was struck. In retrospect, however, and on balance, I think that reasonable individuals would have to conclude that QUALCOMM was considerably more of a beneficary of that accord than Ericsson. Ericsson was the 1st big domino to fall in establishing their WCDMA licensing program, and they parlayed that into an ultra-high profit revenue generating machine.
Ericsson did get what they wanted, and in addition to what were probably reasonable licensing terms, that included an entry into the CDMA market which in early 1999 was projected to grow to be considerably much larger than it turned out to be, and assuming QUALCOMM's infa division was intended to facilitate that entry.
By year end 1999 QUALCOMM had also divested their handset division. Shedding those divisions made them relatively immune to diluting IPR revenue flow from the cross-licensing agreements that stakeholders in the GSM arena used to minimize royalty outflow and for the more patent rich to insure offsetting that with royalty inflow. Those divestures anchored their IPR business model. Ericsson, by contrast, sunk a lot of time, money, and rescource into CDMA with very little to show for it before they abandoned both handset (outside Japan with the JV) and then infra initiatives. By comparison, Nokia who never gained anywhere near the traction (or profitability) in CDMA they hoped to achieve, at least had some success. At least they were sensible enough to stay out of the ANSI-41 infra business.
Just my thoughts and opinions on the matter ...
Best,
- Eric - |
