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

To: Eric L who wrote (61240)	3/21/2007 12:40:53 PM
From: Art Bechhoefer	Read Replies (2) \| Respond to of 196989

Re: the W-CDMA Patent Licensing Programme Though the Justice Dept. and others may have approved of this group approach to licensing and royalties, that doesn't necessarily mean that all participants are REQUIRED to be in the group, especially when one member still owns most of the essential patents. To make such an agreement mandatory would be tantamount to price fixing, and would be per se anticompetitive. The issue you have discussed makes clear the whole motive behind a large part of the litigation: QUALCOMM, being the largest source of intellectual property for CDMA, CDMA2000, and especially WCDMA and its variants, feels it has a right to the majority of the royalties from many of the handsets that use these systems. The rest of the group would rather see a lower percentage going to QCOM in order that they can improve their own financial condition. The best leverage that the group has is the European Commission, which they hope will give European companies such as Nokia some consideration they couldn't get by themselves in the marketplace. A strong argument against the success of such a manipulation is that the EC really does take into consideration the marketplace, and the fact that many companies willingly pay royalties to QCOM and make exceptional profits doing so. In that sense, the QCOM policy on licensing and royalties, which is applied across the board in a manner that is consistent with the policy of "fair and reasonable," cannot be considered anticompetive. Eventually, assuming that Nokia and others are able to develop a larger number of essential patents, this issue will fade away. But at the moment, the reality is that QCOM has the strongest position in this technology. On the other hand, if the others disagree, well, they are free to use their own group proprietary technology and work around the QCOM patents, aren't they? Art