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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?


To: carranza2 who wrote (50694)3/1/2006 12:04:44 PM
From: Clarksterh  Respond to of 197214
 
To continue with the smorgasbord analogy, my understanding of what thinkclear wrote is that a licensee gets access to all the patents in existence at the time the license gets signed. New patents are not part of the menu.

I think you and Jim are arguing over semantics. He means smorgasbord of patents at the time of signing, and you mean smorgasbord for all eternity. But you both agree on the facts.

I believe the really key point is that the licenses are:

a) For limited period of time - it would probably be indefensible in court to effectively make your current patents last beyond their shelf life by saying "If you want it now you have to pay me until eternity".

b) For a limited scope (i.e. not future patents) - if you were a licensee would you sign for all future patents? Buying a pig in a poke. The licensees, all with big corporate egos, probably all believe that they can beat you later and are just as happy not to include the later patents.

But these two things conspire to make for contentious negotiations every few years. Without raising rates at all.

Clark



To: carranza2 who wrote (50694)3/1/2006 12:05:55 PM
From: Jim Mullens  Read Replies (1) | Respond to of 197214
 
C2, re: NOK6 (POS) / Q raising royalty rates, and “my understanding of what thinkclear wrote is that a licensee gets access to all the patents in existence at the time the license gets signed. New patents are not part of the menu.”

This is where we disagree. During the effective period of the license there is what the Q calls “the improvement period” wherein all patents acquired automatically become incorporated into that existing license. Thus as Altman states below, “ In a CDMA phone under our license agreement, a licensee can do a CDMA OFDMA phone and there would ***not*** be an additional increased royalty above the standard rate.

Going back to Altman’s statements (Nov 2005)>>>

“The other thing that I wanted to point out is that there's not an additional QUALCOMM royalty above our standard WCDMA, CDMA2000 royalty rate. So what this means is if you look back over the last 10 years, you've seen that our patent portfolio has grown very substantially. We haven't increased our royalty rate during that time, so a licensee gets access to more and more of our patented technology.”. As we make more and more investments, as Paul talked about, with the chart that showed all the increasing R&D investments, all of these technologies get licensed to our licensees without an additional royalty rate requirement, and those can get incorporated into a CDMA phone, and they get the benefit of that increased R&D.

An example of that is also taken in the multi-mode context, so in a CDMA phone, we're talked about the Flarion acquisition as we continue to get OFDMA intellectual property.In a CDMA phone under our license agreement, a licensee can do a CDMA OFDMA phone and there would not be an additional increased royalty above the standard rate. So unlike if we did not do the acquisition, and OFDMA and CDMA were combined in a phone, Flarion's intellectual property would not be covered, and these companies would have to then go individually negotiate with Flarion.



To: carranza2 who wrote (50694)3/1/2006 12:19:00 PM
From: slacker711  Read Replies (1) | Respond to of 197214
 
To continue with the smorgasbord analogy, my understanding of what thinkclear wrote is that a licensee gets access to all the patents in existence at the time the license gets signed. New patents are not part of the menu. This makes sense because Q would obviously not wish prior licensees to have access to recently developed technology under licenses that were negotiated before the patents for the new technology are issued.

Well, my interpretation of PJ's comments are the following....

- The licensee gets access to all of Q's patents at the time of the license AND for new patents for a certain set period of time.

- The license has an expiration date that is unrelated to the expiration of particular patents. The licenses are then renegotiated and typically the same rate applies going forward.

FWIW, the replay is now up.

customer.talkpoint.com

Slacker