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Technology Stocks : Interdigital Communication(IDCC) -- Ignore unavailable to you. Want to Upgrade?

To: Jim Lurgio who wrote (4002)	2/17/2000 1:52:00 PM
From: Jim Lurgio	Read Replies (1) \| Respond to of 5195

Bux , Here's a little bit from an ITU document. I would have been glad to post the link but this is a download file only. This affords some input on fees for IPR. From what I see you can't have to much IPR or claim to much because there will be limits. The only thing that will slow down this 3-G process will be if any companies do not agree with the rates the ITU is going to suggest as reasonable and fair. This is a complicated mess and we will all know more in a few months. b. Standard Royalty Rate (SRR). The Industry Reflection Period Report (see final paragraph of 12.1. (MCR)) states ?the proposal most likely to secure critical mass support is for a low standard royalty rate combined with a single figure MCR.? The Maximum Cumulative Royalty (MCR) is dealt with in "c" below. 12.1. also provided a rationale for a SRR of 0.1% per patent licensed which accords with the statement reproduced in the first paragraph above. The Co-ordination Team considered the position of companies holding ?Paper Patents? in the context of a SRR as low as 0.1%. This matter had been introduced in the Industry Reflection Period Report Section 9 (Paper Patents) and recognised that a SRR that was geared at a too low level would not meet the legitimate business interests of such companies. This is accepted but the Co-ordination Team is not willing to accept the proposal that there should be a special Category created for companies holding ?Paper Patents? even if the consequence of this is that certain companies will be unlikely to join the Patent Platform as it will not meet their legitimate business requirements. The Co-ordination Team did not accept that it would be possible to define a ?Paper Patent? adequately and believed that if such a Category was created with a SRR that was substantially higher than that available in other Categories there was a risk that intricate justifications for claiming ?Paper Patent? status would, in the longer term, be counter productive. However there was no desire to exclude the holders of ?Paper Patents? from membership of the Patent Platform and the Co-ordination Team, after long and careful consideration, is recommending that the SRR should be fixed at 0.5% of the Base Multiplier per license for all three Categories. c. Maximum Cumulative Royalty (MCR). The Industry Reflection Period Report (see final paragraph of 12.1. (MCR)) states ?the proposal most likely to secure critical mass support is for a low standard royalty rate combined with a single figure MCR.? 12.1. also provided a rationale for a MCR of 5.0% which accords with the statement reproduced in the first paragraph above. The Co-ordination Team was forced to review this figure of 5.0% in the context of its decision to recommend a SRR of 0.5% of the Base Multiplier as this would mean that any Licensee requiring licenses for more than ten patents will exceed the MCR and will qualify for a royalty rate per license reduced to bring the total royalty payable to the MCR of 5.0%. There was further discussion of the rationale for the MCR first developed in the Interim Report Section II (Issues and concluding remarks) ?What is judged to be a fair and reasonable maximum cumulative royalty rate ??.. based on the economics of a business case ?? The rationale can be restated as the maximum percentage of the price of a product that can be afforded by the manufacturers that does not inhibit the growth of the market yet affords an equitable return for the investment made by the patent holder in the technology upon which the manufacturer relies. Various views about the level at which the MCR should be set were made known to Team 2 during this Phase 2 ? Stage 1, many of which are subject to the commercial confidentiality undertaking given to members by the Chairman of the Working Group. These views were discussed, without breach of confidentiality, by the Co-ordination Team which, after long and careful consideration is recommending that the MCR should be fixed at 5.0% of the Base Multiplier d. Base Multiplier (BM) Team 2 considered a number of choices of a Base Multiplier i.e. the sum of money or monies on which the percentage royalty rate should be calculated. It was deemed important that the Base Multiplier should be capable of independent audit and the Chairman of the Working Group evaluated the choices available and recommended that the Base Multiplier should be the ex-works sales value of the products in the Category to which the license applied. The decision by the Co-ordination Team to recommend three Categories only seems to present a problem until it is recognised that the percentage of the ex-works sales value payable cannot exceed 5.0% of that value regardless of how many licenses are granted, and that if the number of licenses granted to a Licensee is less than ten the percentage of ex-works sales value payable will be less than 5.0%. The opinion of the Co-ordination Team is that the foregoing should make a good business case for Licensees. Consideration of the business case for the patent holder is slightly more complex because as the number of essential patents increases the proportion of these essential patents owned by the patent holders is likely to decrease over time. Therefore the patent holder?s ?share? of the 5.0% of the ex-works sales value will decrease correspondingly. The most significant position expressed by most, but not all, members who are likely to be owners of essential patents is that their business case will depend to a very large extent on the assessment they will make of the growth in the market that will flow from their willingness to restrict the royalty content of ex-works sales value to a maximum of 5.0%. If, company by company, it is accepted that growth will be encouraged rather than inhibited this will make a good business case for the patent holder. The Co-ordination Team endorses this position. Accordingly the Co-ordination Team is recommending that the Base Multiplier should be the ex-works sales value of the products sold in the respective Category. e. Implementation of SRR, MCR and BM It is central to acceptance of a ? Categories; b ? Standard Royalty Rate (SRR); c ? Maximum Cumulative Royalty (MCR); d ? Base Multiplier (BM); that there is an understanding of how these will be combined into a regime that is fair and reasonable for both patent holder (Licensor) and Licensee. Unless the Licensor and the Licensee mutually agree to enter into a cross licensing or equivalent commercial agreement all licenses will be granted under a standard, non negotiable, license agreement. (Subject to further study) All licenses will be granted for a standard term of years and will be subject to a SRR of 0.5% unless the total number of licences to be granted exceeds ten in number. Where the total number of licenses to be granted is greater than ten the SRR for each license will be reduced by the same percentage so that the MCR of 5.0% is achieved. Example: if the total number of licences to be granted is twenty the SRR will be discounted by 50% and the royalty payable will be 0.25% per licence. This could mean that one Licensee requiring less than ten licenses would pay the SRR of 0.5% per license while another Licensee requiring twenty licenses would be paying a royalty of 0.25% for each license that is common to both Licensees. This would obviously be discriminatory therefore the Co-ordination Team is recommending that the SRR is reviewed periodically and adjusted so that in the next period all Licensees will pay the adjusted rate which will become the SRR for the next period. (The review trigger mechanisms are under further study). This proposal will need to meet with the approval of the anti-trust and competition authorities and meetings have been planned with the appropriate bodies to discuss this issue. An alternative is that all Licensees will be required to pay the SRR prevailing in the period during which the license is issued even if this breaches the MCR for some Licensees. The reasoning behind this alternative is that there will be a delay between the granting of a license and the first sale of a product attracting payment of royalty and it is therefore unlikely that any Licensee will have to pay a royalty higher than the MCR. The Co-ordination Team does not support this alternative. 2.3.3.3. The licensing administrator. The purpose of the Licensing Administrator (LA) is to ensure the proper conduct of the licensing process of the Patent Platform including, but not by way of limitation: the open provision of information about the Patent Platform; applications for evaluation of patents; applications for licenses; standard license agreements; assessment of applicable royalty rate(s); periodic review of Royalty and Maximum Cumulative Royalty Rates. Member companies will be invited to nominate organisations suitably qualified to meet a Statement of Requirements which will be prepared by the Co-ordination Team following the 6th Plenary Meeting and which will form part of a Request for Quotation which will made to candidates selected by the Co-ordination Team from the nominees. Further details of the role of the Licensing Administrator are provided in Annex C to this Report. The LA will be appointed by the Board of the Patent platform with the approval of the members and is intended to occur by no later than October 1999 (Note : Not the Board of the UMTS IP Association). The Co-ordination Team is recommending the appointment of an independent third party for the role of Licensing Administrator. 1. PROPOSED PHASE 2 ? STAGE 2 PROGRAMME (26 March - 30 June 1999) The Co-ordination Team will continue for the conduct of Phase 2 ? Stage 2 to ensure continuity from Stage 1. The Phase 2 Stage 2 Work Programme (26th March ? 30th June 1999) is modified significantly to focus on the resolution of the ?detailed issues? enabling the completion of the Patent Platform definition, the preparation of the necessary legal and commercial support documents, continued contact with third party concerned organisations and considerations relating to the governance beginning 30th June 1999. Team X will be created to focus on the ?detailed issues?, legal aspects and commercial and organisational aspects under the leadership of John MacNaughton. The Co-ordination Team will play a more pro-active role in the timely resolution of substantive issues not related to legal drifting. The Co-ordination Team members will form part of Team X, along with the previous members of Teams 1, 2 and 3, set up under Phase 2 Stage 1. Contacts with third parties will continue in accordance with a Promotion and Awareness Action Plan (Annex E). The mandate of Team X is as follows : a) ?Detailed issues? regarding : - Licensing Administrator: - the standard licensing agreement; - the organisation of the licensing protocol; - the scope of the Licensing Administrator?s activities; - past patent infringement. - Patent Evaluation Entity: - the scope of certification and licence; - patent families. - Royalty Calculation: - royalty collection points; - royalty re-evaluation trigger points; - product categories definition; - ?Think the Unthinkable?. - Promotional Activities: - relationship with Standards Bodies; - promotion of the UMTS IP Association activities. b) Legal aspects The Preparation of legal and contractual documents necessary for the proper operation of the Patent Platform. John Sideris (Alcatel) will lead on these aspects in conjunction with legal experts nominated by member companies. This will include : - The registration of the successor organisation to the UMTS IP Association including; Objects of the organisation; membership criteria; governance of the Patent Platform; constitution of the Board; powers delegated to the Board by the Members; the Board?s ability to delegate powers; financial structure; etc. - An enforceable agreement for members to offer licenses for essential patents to potential Licensees at the prevailing Standard Royalty Rate and Maximum Cumulative Rate where there is no mutual undertaking to enter into a cross licensing or other commercial agreement. - An enforceable agreement for any patent holder submitting a patent for evaluation of essentiality to become a member of the Patent Panel and to offer licenses as described in the preceding point. - An enforceable agreement for the maintenance of licenses granted in the event that a patent holder withdraws from membership of the Patent Panel. - The Terms of a Standard License Agreement and the elements of such agreement which shall be mandatory for inclusion in any cross license or other commercial agreement to prevent claims of discriminatory practice. - The contractual arrangements to accompany the Request for Proposal to be sent to nominees invited to bid for the License Administrator contract. - The contractual arrangements to accompany the Request for Proposal (if required) to be sent to nominees invited to bid for the Patent Evaluation Entity contract. - Any other formal legal documentation that may be required. c) Commercial and Organizational Aspects The completion of the details of the Patent Platform necessary for the proper functioning of the Patent Platform and the relationship between the participants in the Patent Platform. This will include: - The commercial and organisational considerations arising from the drafts prepared under b) above. - All processes related to the functions of the Licensing Administrator. - All processes related to the functions of the Patent Evaluation Entity. - Preparation of Statement of Requirements and Request for Quotation for Licensing Administrator, the subsequent evaluation of Proposals submitted by bidders, and recommending the preferred bidder to the Co-ordination Team. - As the preceding point if it becomes necessary to appoint an independent third party to be responsible for the Patent Evaluation Entity. - The preparation of the Rules of the Patent Platform to which the legal documents drafted by Team A will be applied. - Any other requirements of a commercial or organisational nature.

To: Jim Lurgio who wrote (4002)	2/17/2000 2:23:00 PM
From: w molloy	Read Replies (1) \| Respond to of 5195

Molloy, Just as Nokia is the leader in communications McDonalds is the leading Hamburger chain. Probably the most profitable thing they sell is french fries. Do they ever mention the company or companies that the buy their fries from? I think not so why should Nokia mention IDC as a provider for their products? You have presented NO evidence that IDC is providing ANYTHING with respect to the context of the article. If IDC were indeed involved why isn't the IDC PR providing information? The article you presented is great PR for NOK and zero PR for IDC. I don't care about Globalstar.