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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: quidditch who wrote (31871)	6/7/1999 10:35:00 AM
From: puzzlecraft	Respond to of 152472

Steven and Clark, thanks for your responses. If the rate is the same whether one or many patents are used, of course this is positive. The actual rate presumably varies among the companies: in one case we know the rate was based on an IPR ratio, Ericsson... perhaps the rate, when negotiated with each company is based on the total number of patents out there, and then if a given company only "uses" one patent they still pay as if they are using all of them. So given this scenario, for each company, the rates would hold steady until the last patent expired or the time of the contract. Steven, as you said... the question of how patents associated with refinements affect the contracts... and the issue of essential vs non-essential... these are things of longer term interest. John

To: quidditch who wrote (31871)	6/7/1999 10:43:00 AM
From: Clarksterh	Respond to of 152472

Steven - Legality of patent extension: First, it isn't actually the patents which are being extended. By that I mean that if, after the basic patents have expired, a company comes along and uses items in the basic patents but different details, then Qualcomm will not have a legal remedy. There are ways in which patent holders have attempted to extend their patents, such as by writing a later patent or patents which follow-on directly from the first. However, these extensions are always ruled invalid. For instance later patents which follow directly from the first patents are ruled invalid since they do not meet the non-obvious criterion (In re Zickendraht (1963)). Thus, I think that a better way to look at it, legally, is exactly the way that it was phrased in the CC ('no matter whether you use one or many of our patents, the fees are the same') even though, at first glance, that looks the same as 'if you want it now, you have to buy it for all time'. Although I know of no case law that says that 'if you want it now, you have to buy it for all time' is invalid, it is a riskier tactic since the statutes are intentionally written to limit the time that a patent acts as a block on use. Clark PS Note that in any case, no matter what Qualcomm does, any company that starts manufacturing new CDMA products after Qualcomm's first (i.e. broadest) patents have expired is going to have a better chance to bypass Qualcomm's patents and thus, at that time, Qualcomm will have an incentive to lower their patent fees for new entrants. (Or they will face the risk of a new cheaper standard which bypasses their patents) This then begs the question of having a two tiered fee structure. I think that this not sustainable in the long term and thus Qualcomm will probably lower everyone's fees at some point in the distant future. I think the particular wording allows them to delay this point a little (and perhaps a lot if the entrenched 3g standard incorporates some of Qualcomm's later patents) and allows them a little more wiggle room. But it isn't an indefinite guarantee of high royalty rates. All JMO. PPS Finally, note that by the time Qualcomm's original patents have expired the royalty rates will probably be only one worry. Technology changes very fast and it wouldn't surprise me to see other, competing, technologies coming to the fore (e.g. OFDM). My crystal ball just doesn't work much beyond 5 or 6 years.