Ramsey, The Fair Trade Commission said;
"19 major telecommunications companies around the world preparing third generation cell phone services that their plan for standardized patent fees conflicts in no way with antimonopoly law."
They did not say "arbitrarily combine QCOM's IPRs into a pool with a maximum allowable royalty rate of 5%? "
The difference is huge. I agree with Limtex (recent post) and you that this is all part of the organized, coordinated efforrt on the part of the 19 companies. But what the Fair Trade Comission said was they could go ahead with their plans to form a patent pool, and set a royalty ceiling of 5%. We would expect that wouldn't we? After all what is unlawful or unfair about forming an IPR pool? That is not saying that QCOM must join that pool or that pool is the only body authorized to collect royalties, which is something that they do not have the authority to say.
The crux of the issue, and the main fodder for FUD will be that these 19 will keep harping that "well, Japan FTC ruled that the royalty limit is 5%". Whereas what the FTC has said is; "Yes, you can form an IPR pool, and you can set your royalty limit to 5%, there is nothing unfair or cartel like about that". They haven't said a thing about Q's royalties. They can not...
Qualcom has repeatedly said (which has been upheld in patent offices and courts in Japan and EU) and I quote Steve Altman of Q :
"Many industry groups and companies have actually come to us and asked us to join -- I actually received a number of questions about this yesterday -- what they call a "patent pool". And the concept there was, "Hey, let's take everybody's patents, through them into a pool, agree to charge a maximum royalty, and then we'll share that in some predetermined fashion." And of course, everybody that doesn't have essential patents wants to join that pool so that they can gain access to the companies with the strong patent positions. We've had no interest in joining that patent pool and we'll continue with our existing bilateral license negotiations.
I also received a number of questions at the cocktail party yesterday concerning certain companies that are raising issues -- of course these are companies that are not already licensed -- but raising issues as to whether or not Qualcomm has patents for W-CDMA, or stating that they will not be paying royalties to Qualcomm for W-CDMA. And you know, it's funny, as I listen to those questions, I can recall -- deja vu -- I can recall the same questions being asked 2 years ago basically in the context of Ericsson. And I think I received a question at that point that Ericsson was saying that you don't have any patents for W-CDMA, they're not going to paying royalties for W-CDMA. Well, as you can see, what they're saying now, when we finally signed our license agreement with Ericsson, their CEO was quoted in their press releases saying that Qualcomm was a pioneer in developing CDMA technologies. And in our license agreement itself, they stated that Qualcomm indeed has essential patents for W-CDMA. So, they're on record, in the license agreement, agreeing that Qualcomm has essential patents, that they cannot design around, in order to deploy W-CDMA.
In fact I think what you're seeing in fact, is that companies that are not licensed will say these things. They're eventually going to need to get a license, they're going to need to get one with us. We've dealt with these issues in the past. Basically, every license agreement that I've ever negotiated... usually you have a big company on the other side claiming to have a very strong patent position, whether -- even before there was W-CDMA, before there was 3G -- claiming they had very strong patent positions on other features that we would need to gain access to. In each case we, based on the strength of our patent portfolio, negotiated very favorable agreements where we obtained cross licenses, and obtained royalty bearing licenses that were... whereby they would have to pay us royalties as they went forward.
Staying on the other, 3G, and in particular W-CDMA, major companies, Lucent, Ericsson, Nortel, Samsung, Philips, and a number of others are licensed today to do W-CDMA or DS CDMA, the mode of the ITU standard, proposed standard. And these license agreements require that these companies pay us royalties. And it's the same royalty, whether they sell products for CDMAone, whether they sell the products for MC CDMA, or whether they sell it for DS CDMA." |
