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

To: slacker711 who wrote (75684)	3/21/2008 6:59:14 AM
From: slacker711	Read Replies (2) \| Respond to of 197210

I really hope that Qualcomm has more proof than a single email from a PR firm. signonsandiego.com Qualcomm says competitors conspiring in patent dispute By Jonathan Sidener UNION-TRIBUNE STAFF WRITER March 21, 2008 Qualcomm has accused rivals Broadcom, Nokia, Texas Instruments and others of collusion and price fixing in their wide-ranging dispute over licensing the San Diego company's patents. The companies are fighting over how much – if anything – the others must pay Qualcomm for technology that enables high-speed mobile Internet phones and networks. In court filings, Qualcomm formalized charges of a conspiracy that it has previously alluded to, saying its competitors are coordinating attacks because they don't want to pay royalties for Qualcomm's “key patents” covering so-called third-generation phone networks. Broadcom and Nokia said there was no collusion. Qualcomm said its adversaries called themselves “Project Stockholm” and orchestrated a broad strategy against the company, according to its Feb. 29 counterclaim to a lawsuit filed by Broadcom in New Jersey. The filing claims that the goal of Project Stockholm was to reduce the value of Qualcomm's technology and to reduce competition from companies such as Samsung, which relies heavily on Qualcomm technology and has become the second-largest cell phone maker in the world. The filing said Broadcom and Nokia “conspired” to coordinate global litigation against Qualcomm. Broadcom has filed several lawsuits against Qualcomm in the United States, while Nokia has sued Qualcomm in the United States, Europe and Asia. Qualcomm quoted a Nokia attorney at a 2005 news conference as saying, “Broadcom is now carrying the torch in the U.S.” In the New Jersey suit, Broadcom claimed that Qualcomm did not properly notify an industry-standards organization of its patents. Qualcomm disputed the claim but has also asked the federal judge to dismiss Broadcom's claims under what is known as the doctrine of unclean hands. “The group has even gone so far as to adopt a code name for their anticompetitive conspiracy,” Qualcomm said in its filing. “An e-mail dated Nov. 18, 2005, from a representative of the Brunswick Group, a public relations firm jointly retained by Nokia, Broadcom, Ericsson, Texas Instruments, NEC and Panasonic, identifies the group as 'Project Stockholm.' ” Broadcom said in a written statement that the companies openly collaborated and jointly announced complaints filed with the European Union. By definition, collusion involves secret alliances. “There is no secret about either this commonality of interest or the fact of the companies' cooperation and consultation with regard to Qualcomm's exclusionary conduct, nor need there be,” said David Rosmann, Broadcom's vice president of intellectual property litigation. The heart of the dispute involves Qualcomm's patents for a technology called WCDMA. Qualcomm pioneered the use of a technology called CDMA, or code division multiple access, which allows multiple phone calls to exist on the same frequency without interfering with one another. The technology is the basis for Sprint and Verizon's networks and the phones for those networks. Manufacturers pay Qualcomm an estimated 5 percent of the cost of phones to license its patents. CDMA became one of two dominant technologies in the United States, but it wasn't used in the first generation of digital phones in Europe, where a competing technology, GSM, had been adopted as a unified standard. European wireless companies such as Ericsson and Nokia were able to sell GSM phones and network equipment without paying royalties to Qualcomm. For third-generation networks, Europe is migrating to wideband CDMA, or WCDMA, which sets up the conflict between Qualcomm and Nokia and Ericsson. Qualcomm, which holds a number of patents in the area, says its WCDMA patents are key to the technology. Broadcom, Ericsson and Nokia each hold some WCDMA patents. Qualcomm says it is entitled to its 5 percent royalties for WCDMA phones. The competitors are challenging that with a number of arguments. In its court filings, Qualcomm said one of those strategies amounts to price fixing. The Project Stockholm companies pushed to limit licensing fees on WCDMA phones to a total of 5 percent to be split among the various companies with patents, Qualcomm said. They hoped to have a government agency or industry-standards body enforce the limit on royalty fees, Qualcomm said. A Nokia spokeswoman said there was no Project Stockholm and that Qualcomm made up the name. “There's no plot, no back-door actions,” spokeswoman Laurie Armstrong said. “We've done everything very publicly.”

To: slacker711 who wrote (75684)	3/25/2008 2:10:36 AM
From: Stock Farmer	Read Replies (1) \| Respond to of 197210

You disagree with this: To my mind, Nokia's assertion is that the value of patents in a patent portfolio is distinctly non-linear. Which means that in any patent portfolio, a very small handfull of patents are truly very valuable, and the rest have negligible individual value, but might, if numerable, add value by virtue of being numerous. I don't understand your disagreement. Firstly you say "If your contention was correct, there would have been no need for the expert to make the comment about the difficulty of valuing individual patents" Perhaps my contention is more clear if you substitute the word "painting" for "patent", after all, some paintings are more valuable than the others. A single Monet might be worth more than the entire year's production of the Middle Vale Primary School art class, for example. An IPR portfolio, when translated to the art metaphor might be like a gallery containing a few pieces by Monet, Renoir or Picasso, augmented by several outstanding(?) works by the graduating class of the New York Acadamy of Fine Art, and rounded out with countless works of the owner's daughter, friends, and associates. Like its patent portfolio cousin, such a "painting portfolio" would be non-linear with respect to the distribution of value between various paintings. Simultaneously, most art experts would agree that predicting the actual purchase price of each individual piece in advance (including perhaps a spectacularly colorful finger-painting by the owner's kindergarten daughter), let alone the whole portfolio all together... well, it is extremely difficult. Ergo, I really don't see a conflict between non-linearity and difficulty determining value. In patents or paintings. You also wrote "The fundamental tenet of [patent proportionality] is that every essential patent is equal." This is absolutely not true. In actual fact the fundamental tenet is that the average value of one large bundle of patents is approximately equal to the average value of another bunch of patents, to the extent that it isn't worth making a more accurate determination (e.g. valuing every patent one at a time). This is less easy to prove as malarky as you might like, although the malarky factor may not be lower than any other method for valuing a patent portfolio. Nevertheless, you and I do agree that patent proportionality is a completely dumb metric to use. Our reasons may differ. The reason I oppose it is not on merit, but on usefulness. Basically, if we adopted the method, then we'd see patent factories erupt in a numbers game. To sweat the art metaphor, if painting-proportionality was the metric by which galleries were measured, galleries the world over would be knee deep in kindergarten finger paintings before long. As far as a judge ruling in favor of Nokia's position as undermining FRAND... I'm not sure about that. If I am a rental car company, and I agree to rent you a car at a fair price, you might flinch if I forced you to rent my whole fleet, even if it was at the same price I rent my fleet out to all the other taxi companies. It seems to me that Nokia's argument is that they should not be forced to pay the same royalty rate as everyone else, in part because they have already paid for some of the licenses for which others are currently paying, and in part because they should be credited for some of the IPR which Qualcomm requires. Therefore, that is not FRAND. As this is the only offer Qualcomm has put on the table, and it is not FRAND, Qualcomm has not yet met their obligations through ETSI. This is not an unreasonable argument. While it ultimately might not be decided in Nokia’s favor, there is a non-zero risk that it might.