Sorry Dave, I didn't mean to say that there would only be one lawyer involved. I'd consider it a bit negligent to leave a billion and more in value dependent on one person for such a critical process. That would be a bit like letting a single engineer do the calculations for the twin towers in New York. You'd need foundation specialists, soil mechanics aces, earthquake, wind, concrete, steel and all the other knowhow. Then you'd want to recheck everything.
I just meant the lawyer cost at a couple of hundred dollars an hour times how ever many lawyers, electronics engineers who understand the patents, back ups and court presenters it would take, wouldn't be much. When I said the cost might be 1% of the value and said the value would be a few hundred million, maybe a billion, I was being modest in the value, as a moments reflection would show. This is a monster market we are dealing with. Worth trillions.
But suppose QUALCOMM's share ends up in the $100 billion range, which would represent 10 years income. 1% would be $1bn. Even Johnny Cochrane didn't get that. But cut it more so that only the royalties component is counted, to say $10bn, it still leaves $100m at 1%. Keep cutting and you can afford a passel of lawyerin'.
Now, bear in mind that L M Ericsson will incur the same cost to take on QUALCOMM. But they won't win unless an unlikely court outcome occurs. So you can multiply whatever cost you allocate to QUALCOMM by the probability that L M Ericsson will win. [or divide, but let's not fuss over the equation]. So L M Ericsson's lawyering cost will be much much bigger than QUALCOMM's to achieve the same statistical probability of a winning outcome.
Now, since L M Ericsson has said that the IPR should be free, and it is unlikely that they would get a clean sweep across all patents, so they would still have to cross license with QUALCOMM, they will of course stick to their ravings that the intellectual property for 3G should be free or at a derisory amount, perhaps paying the salaries of a few of the engineers in an ex gratia appreciation for some help in development work.
So L M Ericsson will pay several or many times the mega money that QUALCOMM would pay, but come out empty handed - with only a cheaper patent price, even if they won, and NO advantage over any of the multitude of competitors which QUALCOMM had the foresight to license.
You see the unpleasant logic of it for L M Ericsson.
Anyway, I don't think it would take that big a deal of lawyering. Nowhere near 1%. There is only so much time you can spend, even on designing the twin towers, which would be a much bigger effort than seeing L M Ericsson off. The real cost to QUALCOMM will be to demonstrate the train of logic to L M Ericsson who will then back off, cave in, get their chequebook [English sp.] out, and write $1bn, being a specially discounted fee for them, plus % of sales of course.
Any gaps in the logic? I know I didn't quote any patent cases, but the drift is pretty clear.
Mqurice |
