Wednesday, November 09, 2005

More on Qualcomm Suit Against Nokia

A few more articles on Qualcomm's patent infringement suit against Nokia. In itWorldCanada, John Jackson at Yankee Group noted that licensing for WCDMA is very different than for CDMA and GSMsaid. He said, "The licensing regimes around both CDMA and GSM are pretty unambiguous. In both cases, the key or essential patent holders have entered into an agreement the principle of which is that they are not going to make a living off of selling licences."

While Qualcomm CDMA IP is a cash cow for the company, with WCDMA there are more than 15 vendors contributing intellectual property to the standard. Jackson added, "For Qualcomm this has the potential to be a bit of an identity crisis." Jackson pointed out that the other vendors want Qualcomm to "decrease the royalty payments that it demands in an effort to lower handset prices and thus grow the market. However, Qualcomm earns a significant portion of its revenues from patent royalties so it is reluctant to reduce prices."

"Qualcomm is doing what every company should do: looking for ways to maximize shareholder value," Jackson said. "This seems to me like a series of prepared legal maneuvers intended to forestall any mandatory action or legal judgment on either side of the Atlantic," Jackson opined.

In the New York Times, Robin Hear at Ovum thought the suit was in retalitation so Qualcomm held on to its patent royalties. He said, "I have been expecting a meaty response. They'll probably get their spat over with, cuff each other in the face and come to some agreement."

Over at the International Herald Tribune, Lance Wilson at ABI Research said, "Qualcomm has a very viable patent portfolio, and they are trying to extract the maximum amount of money out of it that they can while at the same time the licensees are looking to spend as little as possible for the right to use the patents. It is likely that what is going on is some business maneuvering on both sides."