IP Strategy and the Offensive Move by Prime UMTS (WCDMA) Movers and Shakers
chapq,
... and set the rate that Ericsson, Nokia, and Motorola could potentially charge on a proportional basis based on their own substantial portfolios of essential IP ... and if all charged what they could, the cost would be prohibitive?
For many, but not for Nokia, Motorola, and Ericsson/Sony Ericsson, who would (will) enjoy a competitive advantage in both terminals and infra. LG, Samsung, BenQ (even with some transfer from Siemens), HTC, et al., another story.
In the Ericsson case remember that their primary business is infra and I suspect (have always suspected) that they pay very little on UMTS (WCDMA) infra to QCOM, and of course they have exited the overcrowded and declining CDMA infra market.
I suspect Nokia doesn't pay much on infra either.
<< Still we are left with the pivotal argument over who validates differing values among the essentials. >>
Fundamental. There are NO differing values among the 'essentials' in the SSO/SDO environment, and in that environment proportionality of essential patents is an indicator of both the relative strength, quality, and potentially the value of an IP portfolio.
Validation of a patent and sorting out 'essential' from declarations of essentiality another story, and just one abuse (amongst many abuses) of the overworked patent system here and abroad is the tendency of many companies to stick the 'essential' label on way too many declarations. Certification of essentiality is one of the most appealing potential strengths of the W-CDMA Patent Licensing Programme headed by Brian Kearsey. One of its weaknesses, IMHO, is too low a ceiling on rates.
BTW: While it's odd that there is no redirect the old 3G Patent Platform website (as well as 3G Patents Ltd) is evidently history and it has been superceded by 3G Licensing Ltd's W-CDMA Patent Licensing Programme site ...
3glicensing.com
<< It stands to reason that the licensees already did that, but a regulatory ruling based on simple patent counts could change the open market evaluations. >>
There will be no "regulatory ruling based on simple patent counts" of that I can absolutely assure you, and "simple patent counts" don't mean much of anything to anybody except slidemeisters.
There also will be no "regulatory ruling" for several years to come, and any ruling the EC Commission delivers if they proceed to that stage will examine many more aspects of QUALCOMM's licensing tactics than just proportionality of essential patents and QUALCOMM's overall contribution (or lack of same) to exceptionally well documented UMTS (WCDMA) technology development in ETSI (and various European research programs) the Japanese FPLMTS program and ARIB, and the resulting ETSI/ARIB/TIA and 3GPP standards relative to licensing fees and royalty rate charged.
I wouldn't necessarily count on it but there is a possibility that with a microscope focused on them, QUALCOMM might modify its tactics in negotiating licenses and supply agreements somewhat should the EC issue a Statement of Objectives (and I've already opined that they will) as a result of the action even before any rulings are handed down. Some analysts have opined that they might even change their organizational structure (ala a SpinCo II).
Inder Singh's pro-QCOM wireless equipment team (e.g.) at Prudential published an interesting 9 page QCOM report on March 6th headed "QUALCOMM'S Business Model Remains Solid, but we Examine Potential Proactive Steps Toward Resolving EU Overhang," and they look forward to the e broader issues addressed in the pending action ...
Looking beyond current 3G standards, recent media reports in Europe have indicated that the European Telecommunications Standards Institute (ETSI) may be considering a requirement that IP contributors to the next-generation wireless standard, beyond 3G, agree in advance to a cap on total royalty payments as a condition of having that standard adopted. We believe such a requirement is onerous, and unlikely for several reasons – not the least of which being that Nokia, Ericsson, and others would diminish their own IP value. Nonetheless, we feel such a consideration may provide a further reason for Qualcomm and its industry peers to work towards a more constructive market environment for future standards.
They also establish 3 scenarios that QUALCOMM might employ to dodge the bullet aimed straight at their offensive heart by the extremely companies employing an IP strategy as offensive as theirs.
I personally rate Inder Singh and his team "above average" as analysts covering wireless go, even though I don't put them in the same league as Paul Sagawa and the Sanford Bernstein folks, or Tim Luke and Stuart Jeffrey and their overseas counterparts at Lehman Brothers, Karri Rinta at Nordea, or Paul Hansson, Mikael Laséen, and Mika Metsälä at Kaupthing Bank. Regardless, this was interesting conjecture from Inder and his team.
[Anyone interested in the report can PM me with their email address and I'll return reply a copy]
<< A good answer, including two wondrous sentences which if read aloud comprise a breathing exercise worthy of Pavarotti. >>
LOL! So I indulge long free-thought sentences, type like I dictate, sometimes talk like that when I'm on a focused roll ... and I might add that I'm a reasonably accomplished skin diver who builds up for that sport and recreation with breathing exercises in and out of the pool (so some might call me long winded) ... <g>
[Some folks fish above the surface from wooden or glass craft. I much prefer to fish beneath. <gg>]
<< (Maintaining that structure, however, I would put a colon after "alluded to" and substitute semicolons for the "and"'s). >>
Feel free to do that. I take care of such matters in my own business email correspondence -- and sometimes even in message board posts where it has less significance -- but my accomplished headquarters secretary/admin of 16 of the last 21 years (there's a gap in there when I spun off overseas for 5 years before bouncing back like a bad penny) takes care of that for me and proper utilization of apostrophes (a Mq concern) in formal correspondence, and proposals. I only bounced back to my midwest home away from home after I was assured she would be assigned to remotely baby-sit me once again. I'm not sure what I'll do come June 30th when we part company and I hang up my chasm crossing shoes, but I sure will miss checking in with her daily, and hopefully she will miss tracking me down as much as she did for those 5 years when I was not under her supervision. <ggg>
Best,
- Eric - |
