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

To: Stock Farmer who wrote (76823)	5/2/2008 4:22:56 PM
From: whisperer	Read Replies (1) \| Respond to of 197076

Thanks for the detailed response. I agree with most of what you say. Just a few points I'd like to clarify. In order to balance this, in ETSI standards, every holder of a patent that is embedded into the standard is REQUIRED to offfer an irrevocable license to all implementors of the standard. Which must be FAIR and REASONABLE and NON DISCRIMINATORY It may seem like a minor distinction, but I believe it goes to the heart of the issue: QCOM's obligation "to offer an irrevocable license that is FRAND", is not the same thing as "an (implicit) automatic irrevocable license", which is what NOK claims. In the first, there is no license until the parties agree on a FRAND rate. In the latter the license exists from the get-go. How did you form this opinion? The terms of the offered license are required to be FRAND. Perhaps I wasn't being clear. What I meant by "bad faith negotiations" (I realize this may not be a legal term), is the case where the licensee (NOK) can indefinitely drag out the royalty negotiations. According to NOK, all they need to do is say they are willing to accept a license, and continue to low-ball the royalty rate. If the two parties can't agree on what the price is, then they can take it to arbitration or the courts or somewhere competent... either they come to an agreement or they can follow due process and arrive at "the" fair price. However long this takes. It's the "however long it takes" part that seems unreasonable to me. -W

To: Stock Farmer who wrote (76823)	5/2/2008 4:37:53 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 197076

An underlying problem with FRAND is that things change. What is reasonable one year is not necessarily reasonable another year. In free markets, the reasonable price of something is not the cost of the raw materials plus a fee for manipulating them into final form. The reasonable price is what the market will bear. So, selling ice cream in bulk at a supermarket in winter in a low income area means a reasonable price per kilogram is a lot less than a reasonable price selling the same ice cream a scoop at a time at a hot beach in winter. When 3G was just an idea, with no idea of what the market would bear, people guessed at market sizes, competitive position, revenue and profits. The outcome was that Qualcomm agreed to about 5% royalty and spectrum bidders decided $100 bn for some 2GHz in a few countries in Europe was reasonable. Since then, things have changed. The 3G market is becoming established and spectrum valuation can be better determined. It turns out that Qualcomm's technology is worth a LOT more than 5% and, so they say, 2GHz isn't worth that much, I haven't checked spectrum value but after figuring out NZ spectrum values and knowing Europe passably [near enough for government work], I doubt that 2GHz is worth that much money if the 800MHz and 450MHz are given market tests of value and opened up to mobile cyberspace via CDMA2000/OFDM/HSPA etc Mqurice PS: That was a good view of the legal position. Thanks.