Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : The New Qualcomm - a S&P500 company -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (855)	8/15/1999 9:14:00 AM
From: JGoren	Read Replies (1) \| Respond to of 13582

The contractual language is, of course, key to any contract suit. What was so strange to me was that the press release was so vague about what benefit MOT was to receive. A "most favored nations" or royalty clause is a relatively standard type clause and the court should be able to handle that one relatively easily; since Qualcomm has numerous royalty agreements, which will not cover the same things and would concern different degrees of cross-licensing, there could be some difficulty trying to analyze them as to whether one is better than what MOT has, so it may get down to the base "royalty rate." There is, of course, no way to know if MOT really obtained the best royalty rate or as good as anyone else without knowing the details of every licensing agreement Qualcomm has made. Indeed, one factor might be the amount of IPR Qualcomm was paying its cross-licensee for; for example, the royalty rate might be the same with two different companies but the other company had more IPR necessary to Qualcomm, so the net royalty ends up somewhat lower. Moreover, since these agreements appear to include licensing future IPR which is "necessary" the net rate might have changed over time. It was the reference to the "agreed to work together to develop and commercialize CDMA technology" in the press release that I found awfully vague. As I said earlier, it is my impression from published news magazine reports that MOT backed away from commercialization of cdma and put its resources into analog; given the fact that once it decided to produce cdma handsets, it had so much trouble getting them to market with a chipset that worked, I have to conclude that MOT failed to follow through on R&D until "late in the day." This could be an achilles heel as to its claims regarding the "development and commercialization" part of the contract.