Let me put it this way: one of the challenges in antitrust law as it relate to monopolies is the definition of the relevant market. The market Q can be accused of trying to monopolize is the IPR market as it relates to wireless communications. The problem with defining the market in this manner is, of course, that IPR protected by patents is a legally sanctioned monopoly of a specified time duration.
Plus, a defense to monopolization claim is that the monopoly is the result of innovation and advances in the relevant area which no one else has been able to achieve.
The above is simplistic, not particularly nuanced, but nonetheless is a fairly good guide to the considerations a court would evalute in deciding whether improper monopolization took place.
CDMA and WCDMA chips are quite difficult to make. But they are not impossible to manufacture, as proven by a number of Q's competitors who are using its IPR to make them. In fact, Q expects to get only 50% of the WCDMA chip market, a fact that makes a monopolization claim insupportable.
See this quote from an interesting discussion that took place a couple of years ago. It suggests that in some industries, patent bundles are absolutely necessary in order to compete. A simplistic way to think about it is to think how much good 2 or 3 of the 4 core CDMA patents would do to an ASIC manufacturer--not much, I should think, unless the entire group is available. It's the grouping of the patents that is valuable, not each individual one.
I gather from all I've seen that the reason Q can continue to bundle patents is that its advances are so, well, advanced that they have the same value as the original four core patents, though I admit I have not seen any specific study or systematic analysis of the patents subsequent to the four biggies. I'm relying on what Q has said, which has been quite honest on subjects such as these. Anyway, here's the quote:
Richard Levin, president of Yale University, recounted the results of a 1980 survey on R&D industries, showing that across almost all of the industries and technologies polled, it was the first to market, not the first to patent their innovation, who led the way economically. In most industries, however, it is the accumulation of advances that define economic success. Since competition in these industries typically requires access to a bundle of such patents, cross-licensing of entire patent portfolios is necessary, he explained.
The exception, he added, were the pharmaceutical and chemical industries, where broad but discrete rights--e.g., to a particular molecule--were easy to obtain and immediately valuable. However, those industries now are moving closer to the patent bundling system, he indicated.
Although this phenomenon is not recognized in the patent and antitrust systems, Levin acknowledged, it has become necessary for conducting business in today's economy.
As to the quality of patents issued today, Levin remarked that many software patents "don't meet the common sense standard." The consequence, he cautioned, is that they can confer unwarranted market power.
However, the solution, according to Levin, is not antitrust constraints, but to improve the process of patent examinations at the PTO. Levin also suggested that a "more rigorous" standard for evaluating the "non-obviousness" of an invention should be developed, not legislatively, but through corrective court action. He faulted recent Federal Circuit rulings for putting too much emphasis on the "secondary standards" of non-obviousness such as the money invested in an innovation.
0-pubs.bna.com.pegasus.law.columbia.edu
How can Q be faulted for bundling if instead of obtaining new patents that are genuinely groundbreaking, Q has been able to bundle because the PTO has been lax in granting subsequent patents?
Plus, it has cross-licensed with TI, its main ASIC competitor, so where's the anti-competitive behavior? |
