Qualcomm's woes

Followers of the telecommunications industry will know that US company Qualcomm tends to go it alone in setting royalty rates for patents considered essential to standards. Qualcomm considers the licensing fees set to be "Fair, Reasonable and Non-Discriminatory" (the mythical FRAND terms), but much of the industry is not so sure. Qualcomm holds a number of patents to the CDMA standard which are considered relevant to UMTS.

Qualcomm is currently facing an EU Commission investigation into its licensing practices, as reported here.

South Korea is in a particularly difficult position. It had not adopted the GSM standard and instead went for CDMA technology - on which Qualcomm owns the basic patents. The Wall Street Journal reports that the South Korean Fair Trade Agency has fined it USD 208 Million for anti-competitive practices. The agency alleges the Qualcomm abused its dominant position on the South Korean market place to offer discounts. Apparently Qualcomm holds 99.4% of the South Korean market for chips (as reported on a German website here)

Just to add to Qualcomm's woes, the Japanese Fair Trade Commission have apparently issued yesterday a negative decision - as reported by Qualcomm itself on its website.

New CDMA2000 patent pool launched

This week Sisvel launched a new joint patent licensing program, offering a licence to essential CDMA2000 patents (patents for hybrid 2.5G/3G technology of mobile telecommunications standards that use CDMA, code division multiple access, a multiple access scheme for digital radio enabling the sending of data between mobile phones and cell sites) on “fair, reasonable, and non-discriminatory terms”. The patents included in the program are owned by big players such as France Telecom, Nippon Telegraph and Telephone Corporation, and Siemens.

Sisvel, the Italian consumer electronics group, started in 1982 and today is one of the leading companies in managing IP and maximizing the value of patent rights. Sisvel will act on behalf of the patent owners as licensing administrator for the program, which is designed to make essential CDMA2000 patents more easily accessible and ensure that users can “benefit from the flexibility and practicality of the license terms available”. The royalty rate for all included functions under any license is “only US$ 0.05 per patent family per unit, up to a cap of US$ 0.50 per unit for products that include the 1x-RTT air interface but have no EV-DO functionality, and a cap of US$ 1.00 per unit for products that include the EV-DO air interface”.

More information is available here and some CDMA2000 market statistics can be found on the CDMA Development Group website here.