IP Matters: Negotiating Leverage, Strategies, and Tactics ...
Slacker,
<< It comes down to negotiating leverage. Qualcomm could create a 3G CDMA standard without the IPR of Nokia and Ericsson. The converse wasn't true. I really don't think it is much more complicated than that. >>
... and it was called CDMA2000, a proprietary open standard.
OTOH, they could not create or commercialize the collaborative open comittee-based UTRA (WCDMA) technology and standards without the patented IP (declared to ETSI/ARIB/3GPP as essential but eventually needing to be adjudicated or agreed to be such) of Ericsson, Nokia, Motorola, NEC, Hitachi & Mitsubishi (Renesas), Matsushita, Siemens, DoCoMo, IntedDigital, et al, and were forced to agree to license their own IP to others on FRAND terms.
What is now at issue is whether or not, in the UMTS matter, they did in fact license on FRAND terms, and not just whether the rate they negotiated was fair, reasonable and nondiscriminatory. Steve Altman has outlined QUALCOMM's licensing practices for us in some detail ... hopefully not too much public detail.
As a basis for the recent E.C. action taken by 6 potentially affected parties, at ETSI SMG #24bis before the UTRA access modes were balloted, the European Commission (which had counselor and observer status in ETSI) presented a "Declaration on UMTS," which declared that the commission planned to combat misuses of a dominant IP holder should they occur. The following excerpts are from ETSI SMG #24bis records ...
>> Ruprecht Niepold presented a statement of the European Commission [see Tdoc SMG 22/98], Draft Declaration on UMTS on the occasion of the SMG #24bis (Paris 28-29 January 1998) by the representative of the services of the Commission (Counselor to ETSI). Major points:
• The Commission recognizes the role of ETSI to define the 3rd generation standard for the European Economic Area.
• ETSI must use clear transparent rules in that definition process.
• A fair IPR policy is necessary.
• Competition rules may become applicable when the holder of a UMTS Essential IPR or a group of UMTS IPR holders occupy a dominant position in respect of the IPRs necessary to comply with the UMTS standard: Should abuses occur, the Commission will consider which appropriate action to take in enforcement of Community law and in support of EU policy. In this context the Community competition rules regard a group of companies under common control as a single commercial entity. <<
At that seem meeting and prior to balloting the UTRA candidate submissions ...
• Fred Hillebrand [chair] reminded the delegates of the obligations from the ETSI IPR policy, in particular resulting from section 4.1 of the ETSI IPR policy: .. <snip>
• ETSI Legal Advisor Hélène Lafferre informed the meeting that further declarations on WCDMA and TD-CDMA have been received, .
• Question to Hélène Lafferre by Josef Huber [Siemens]: 60 companies were identified by Siemens to have UTRA relevant patents. How many of them gave the necessary declarations to ETSI? Answer by Hélène Lafferre: Around 20 of the 60 have responded. The companies have 3 months time to react. Some companies declared that their study is going on. 39 declarations have been received in total.
• Motorola IP Policy for UMTS , expresses that Motorola believes the IPR environment strongly to favour TD-CDMA.
• Heikki Ahava [Nokia] presented Tdoc SMG 7/98, "IPR LICENSING POLICY STATEMENT FOR WCDMA," by Ericsson, Nokia, NTT DoCoMo, NEC, Fujitsu, Matsushita (Panasonic), and Mitsubishi Electric, the primary backers of the Alpha groups W-CDMA submission.
• Representatives of the delta concept group reported on similar activities of the protagonists of the delta concept.
• Adriana Nugter [AirTouch] on behalf of the GSM MoU carriers [now GSMA] welcomed the initiatives taken by some companies in the field of IPR.
• Ruprecht Niepold [E.C.] presented a statement of the European Commission [see above].
• On behalf of Qualcomm [who had joined ETSI 3 months prior], Ronald E. Foerster reported Qualcomm to have signed and to fully support the ANSI IPR policy, also Qualcomm to have IPR agreements with 50 to 60 manufacturers; Qualcomm to have concluded to have a strong IPR position in both the alpha and the delta concept, but to need to investigate this and prepare an IPR position. Ronald E. Foerster reported furthermore Qualcomm to be interested to contribute to and to discuss a concept which might simplify the IPR handling; but time to be needed to study and analyse the matter.
• Dirk Weiler commented Siemens investigations not to have identified any essential Qualcomm IPR relevant for the delta concept.
• Rémi Thomas [CNET Labs, France Telecom] asked whether the Qualcomm IPR policy could be expected to be clarified until SMG#25.
• Ronald E. Foerster responded Qualcomm to be looking very hard to elaborate its
position in order to come to a conclusion as soon as possible. He indicated that
Qualcomm will present a progress report on IPR at SMG#25.
• Gunnar Sandegren [Ericsson] and Alan Cox [Vodafone] expressed the view that, in any case, Qualcomm has to apply the ETSI IPR policy.
• It was concluded that, on IPR questions, ETSI/SMG cannot go further than the ETSI IPR policy defines; further IPR arrangements have to be found outside of SMG, e.g., between the big commercial players.
###
At ETSI SMG#25 (March 1998) a large number of manufacturers and operators informed the meeting that they had created an IPR Working Group which later led to the creation of the UMTS Intellectual Property Association (UIPA), and at the same meeting QUALCOMM stated their position that they would be willing to enter into licensing agreements if a converged wideband CDMA standard could be achieved.
At ETSI SMG#26 (June 1998) QUALCOMM floated their early rendition of their 5 Principles and threat to deny granting licenses unless those principles were adopted were discussed in detail. Further discussion was held and they formulated their 5 Principles on this in ETSI SMG#27 (October 1998) and in November the ITU interceded.
The 5 Principles here (yet once more <g>):
Message 18912506
The ITU's statement here (once more <g>):
Message 19896950
<< It isn't rocket science any more, but that's only because Qualcomm put the R&D into creating it in the first place. >>
QUALCOMM also patented much more systematically and aggressively ... and with a much different mind set from the outset than the Europeans or Asians [patent for profit v. patent to protect or patent to cross-license] -- particularly in the late eighties and early to mid-nineties -- and they created an extremely aggressive, comprehensive, and effective IP business model which they evolved over time.
While the Europeans and Asians patented much more aggressively starting in the early nineties they still hadn't adopted a QUALCOMM-like or Motorola-like mindset towards IPR when they went to the negotiating table with QUALCOMM in the 1999 to early 2001 time frame. I think that has changed somewhat, and we are starting to see evidence of it. We'll see more, methinks, and I think that major QUALCOMM licensees that have substantial "essential IP" themselves in UTRA have invested significant resources in preparing themselves over the last 5 years to properly value their IP and use it strategically and tactically henceforth. I don't pretend to know how that will play out over the coming years.
Best,
- Eric - |
