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To: Labrador who wrote (27538)	7/9/2000 11:26:55 AM
From: Rick	Respond to of 54805

Accordingly, it is my take that NTT wants the overall royalty rate to remain the same to the public, while split the royalties between all developing parties --which obviously if this occurred QCOM's take would be a reduced rate. NTT [and presumably others] are looking for cooperation... It's my understanding that NTT etc. wants to pay nothing to Q by declaring their IPR just as important to WCDMA as Q's. Therefore, they should just swap licenses. If QCOM simply says no, the whole thing falls apart. - Fred

To: Labrador who wrote (27538)	7/9/2000 9:39:04 PM
From: Labrador	Respond to of 54805

Qualcomm says its royalty fee lower than rival's The draft proposal on IMT-2000 operator selection procedure released last Tuesday pointed to the likelihood that the government may defer making a decision on the technical standard to the end of the year. That delay and the possibility that the Ministry of Information and Communication (MIC) may opt to allow both cdma2000 and W-CDMA (wideband-code division multiple access) to be used have apparently sent off the alarm at Qualcomm which relies heavily on royalties paid by Korean firms for its profits. During a press briefing yesterday at the Hotel Intercontinental in Samsung-dong, downtown Seoul, Louis Lupin, Qualcomm vice president and proprietary rights counsel, said it will be able to offer a royalty rate lower than what the W-CDMA camp may be able to offer. "There are a fewer number of patent holders in the multi-carrier (MC) side and also the fact that we have bilateral sublicensing agreements with other patent holders allow us to offer significantly lower royalty rates for MC technology," said Lupin. MC standard is also known as the CDMA (code division multiple access) technology. In fact, Qualcomm claims that from the royalty standpoint, the company is completely neutral on whether MC or direct spread (DS), also known as W-CDMA, is adopted as it also holds essential patents for DS standard as well. In fact, Qualcomm may actually get more money from DS, according to Lupin. "However, economics and technical considerations make MC the better choice for Korea," said Lupin. Lupin suggested the DS side will end up charging more in royalties as 27 companies are already claiming to hold essential patents to that standard with additional companies following suit. "The Patent Platform is an interesting idea but is not working," claimed Lupin. Patent Platform is a grouping of DS equipment and network manufacturers that have pledged to agree on a maximum aggregate royalty to keep royalty cost to a reasonable level. Most of the important patent holders, including Lucent Technologies, Nokia, Motorola, Ericsson and Qualcomm have not joined the Patent Platform, according to Lupin, who added that "Total royalty is likely to be very high." However, Lupin's remarks directly contradict Ericsson's claim last month that it had briefed the ministry on the equipment manufacturers on the intellectual property rights cap agreed upon by the DS camp. "Ericsson, NTT DoCoMo and Nokia have agreed on the percentage to be charged for the different essential technologies, and when added up, those percentages should not be more than the agreed- upon cap," said Janos Fugedi, president of Ericsson Korea, last month. Nokia and Ericsson are reported to have told the ministry that five percent or less would be charged as royalty fees. On the issue of planned CDMA rollout in China, Lupin said a framework agreement was signed with China Unicom last February, according to which Chinese manufacturers would be given favored royalties in exchange for Unicom's CDMA commitment. However, he stressed the framework agreement is not a contract and that no commercial licenses have been granted to Chinese manufacturers. Korean companies have been demanding lowered royalty rates based on the most favored royalty (MFR) obligation clause in their contracts with Qualcomm. "Only when a commercial license is granted to a Chinese manufacturer, will MFR be triggered," explained Lupin. He added that it is premature, at this time, to discuss how this will affect Korean licensees. Asked if the company is willing to lower the current royalty rate, reported to be around 5.25 percent, Lupin declined to comment, but added, "We'll always keep an eye to determine if price adjustments are necessary. We don't see one now." Updated: 06/17/2000 by Kim Hoo-ran Staff koreaherald.co.kr