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To: JohnG who wrote (5909)	6/29/2000 12:52:00 AM
From: Gus	Read Replies (2) \| Respond to of 34857

You're being simplistic and you didn't answer the question. Qualcomm's position is that they will charge one flat rate (a gross rate of 5%) on a license-one-claim, license-all-patents basis. The TDMA/GSM patent pool acutally consists of the following: 1) a settled pool of patents under the GSM consortium which is being priced at a gross rate of 15% for newcomers like Samsung and LG SUBJECT to cross-licensing. The net royalties are expected to be much less because Samsung and LG have vast manufacturing operations outside of wireless (read: more chips). 2) an unsettled pool of patents covered by Harris vs ERICY and ERICY vs IDCC which are ongoing in Texas. ERICY was the dominant infrastructure and handset manufacturer for most of the 90s so the results of the jury trials in both cases will influence the gross rate being charged by the GSM consortium. The FDD and TDD version of WCDMA are expected to be the de facto upgrade path for most carriers. At base, those are hybrid TDMA/CDMA networks so a chipmaker who wants to participate in those markets has to cross-license. The WCDMA-only chipset and GSM/WCDMA chipset market are expected to be the initial high volume rollouts. Qualcomm has no TDMA/GSM patents so it has NO choice but to cross-license TDMA/GSM patents in order to participate in the 3G chip market and that reduces its net royalty rate on WCDMA. The alternative is to get out of the fabless chip business and focus entirely on enforcing its patents a la Rambus. Because most if not all of the CDMA2000 networks will essentially be hybrid CDMAOne/CDMA2000 networks, Qualcomm also has to deal with the IPR claims of the likes of Lucent, Oki Electric, and IDCC, who have all asserted their rights under TIA for IS-95. So I ask again, why can't you address the fact that under those circumstances, QCOM's claims over WCDMA will be diluted?