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Will Qualcomm's China Investment Pay Off?

Including Walden in the mix viewed favorably
12/15/2014 06:00 PM EST
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Scudrunner
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Re: Mobile royalties
Scudrunner   12/17/2014 3:12:09 AM
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Hopefully this link will take you to a diagram of who's suing who;

http://images.pcworld.com/images/article/2011/09/mobilesuits-5215647.jpg

 

..and this is probably out of date and incomplete! - but gives a nice visual impression! 

I know that a lot of people are excited about Nokia's opportunity to monetize its patent portfolio now it's no longer in the handset business. Ericsson now appear to be collecting big money from Samsung etc. I believe that Lenovo's purchase of Motorola had a big IP motivation (but Google appears to have held some IP back?).

 

On China handsets in the US, I guess that it's not worth chasing the tidlers? You need to weigh up the cost of chasing versus the benefit of taking them out. Xaiomi would definately be worth chasing.

 

at least the lawyers are making a living

rick merritt
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Re: Mobile royalties
rick merritt   12/17/2014 1:38:51 AM
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Interesting! I had no idea of Ericsson's anti-trust issue in India.

GSMD
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Re: Mobile royalties
GSMD   12/16/2014 7:39:02 PM
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Actually Ericsson is also in trouble in India from  anti-trust investgation taht is underway. Two reasons

1. FRAND roylaties are too high and not transparent. Ithink they want to ensure all vendors pay equal royalties and indirectly open up agreements signed under NDA. This will open up a wonderful can of worms !

2. The whole issue of charging royalties on the device cost is being questioned. teh CCI is asking why it should not be levied only on the modem chip cost.. Someting I always asked (I used to licenese 3G from Infineon, so have to go thru the whole legal hassles of 3G royalties !) and am glad the govt. is asking that question. If this holds up 2% of USD 10 3G module is peanuts.

Actually there is a precedent to this. Most Indian tablet vendors are now shipping low cost tablets witha  slot for Huawei's 3G ultra module. Theye are doing this for keeping a single SKU. If you want 3G, just buy the module and stick it in. Fits flush with the case. So here the FRAND royalties definitely cannot be charged on the whole device. Won't take a genius to start a seperate compnay to sell modem modules at minimum profit ! Google ARA modular phone fits in this category.

 

3. the 3rd point has to do with Indian patent laws. 3G/4G patents are in the grey area of HW/SW patents. So unless there is signficantly unique HW involvement, the patent is a SW patent and not valid. As a result of this Ercisson brouhaha, a couple of legal challenges are undeway (disclaimer, I am assiting one of them). Again this gets interesting since I can ship a phone with an unprogrammed DSP or the royalty programs missing and ask the user to download from an open source site. Cyanogenmod does pretty much the same thing. This is definitely not subject to Indian patent laws.

All depends on how this wonderful section is interpreted ! It is not easy as a former judge from the Indian tribunal indicated that this can be interpreted in mutiple ways since case law is not established.. Hopefully case law will be established soon. Open source 3G/4G modem SW will be a wonderful test case !

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According to section 3(k) of Indian Patent Act "a mathematical or business method or computer programs per see or algorithms" are not inventions. A patent application having claims directed to mathematical equation cannot be claimed but if a device or system which works according to some mathematical equation should be a patentable invention.

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docdivakar
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Re: Mobile royalties
docdivakar   12/16/2014 12:38:15 PM
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@Scudrunner your point about Chinese mobile brands in developed markets is partially correct -many no-contract mobile service providers are indeed offering Chinese smartphones for USA markets. Net10 for example has chosen this route to introduce 4G/LTE smartphones though lower priced Moto, Samsung & LG are also available. The Chinese smartphones offer many more features for lower price tags. But I don't know if brands like Blue Dash played by the rules, paying royalty where it is owed.

MP Divakar

 

junko.yoshida
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Re: Mobile royalties
junko.yoshida   12/16/2014 12:03:50 PM
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Very good point. Something we need to follow up. Thanks, Scudrunner.

Scudrunner
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Mobile royalties
Scudrunner   12/16/2014 11:59:08 AM
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Qualcomm is not the only one queuing up for royalties from China smartphone OEMs; Interesting to see Ericsson slapping a suit on Xaiomi as soon as it tried to set foot outside of China (India in this case). With no IP of their own, China smartphone OEM's face a potentially big royalty bill; Qualcomm, Ericsson, Apple, Interdigital, Microsoft, Nokia, Motorola(?) all in the queue. As far as I know, Qualcomm is the only one actually trying to collect royalties inside China though? This IP issue means that I don't expect to see China local brands in developed markets any time soon! (Huawei and Lenovo/Motorola maybe?) 

junko.yoshida
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Re: Even Obama in the fray
junko.yoshida   12/16/2014 11:58:26 AM
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Indeed. Qualcomm is caught between a rock and a hard place. The last thing it wants to do is to lower royalty payments, while it's not that the company has an endless money to invest in China, either. 

How the Western companies should deal with China on roylaty payment issues is something every technology company in the past wrestled with and found no really good answer. 

rick merritt
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Author
Even Obama in the fray
rick merritt   12/16/2014 11:37:56 AM
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Now reuters is reporting President Obama raised the issue of American patent royalties with his China counterpart. Techno-politicis at the highest level here.

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