"We've not been a litigious company," Paul Jacobs, CEO of Qualcomm, said last week after the settlement of the Nokia-Qualcomm dispute. Crikey. What would a litigious company be like?
Nokia and Qualcomm were spending $200 million apiece a year on lawyers' bills. On the Jacobs scale of litigiousness, what would a really litigious company be spending on lawyers? Half a billion a year maybe?
Actually, it's all a bit too serious to make jokes about it. The wireless industry has motored further and faster than any industry in history over the last 20 years, but its pace of innovation could slow if the legal situation is not brought under control.
"There's been controversy around the strategy of doing R&D to create IP and market that IP rather than actually making something", says Stephen Entwistle, a vp at analysts Strategy Analytics, adding, "but that's an old-fashioned view."
Hard on the heels of the Nokia-Qualcomm settlement came news of new litigation between InterDigital, the Pennsylvania IP developer, and Nokia and Samsung.
Qualcomm and InterDigital, of course, make chips, but besides those two there are the 'patent trolls', companies which patent IP in the hope it will get used and, when it is, put their heads above the parapet and demand royalties.
"There must be a million patents behind a cellphone", says Broadcom's CEO Scott McGregor, "what happens if anyone who owns one of these thinks he can shake down the industry by charging 3 per cent royalty on a handset?"
It's that threat of a litigation feeding-frenzy which makes people fear for a future of unfettered innovation in the wireless chip industry where everyone has to use third party IP.
That's why Nokia is looking for a new definition of FRAND, to permit a clear forward understanding of the costs involved in using someone else's technology, and wants the use of injunctions to be banned in respect of patents which have been declared essential to a standard.
That's why Alcatel-Lucent, Ericsson, NEC, NextWave Wireless, Nokia, Nokia Siemens Networks and Sony Ericsson to got together recently to agree to share their patents on 4G technology LTE on a reasonable basis.
That's why Cisco, Intel, Samsung , Alcatel-Lucent, Clearwire and Xohm formed the Open Patent Alliance (OPA) to declare their Wimax patents and say how much they'll charge for their licensing.
Qualcomm and InterDigital have not joined either group. It would be excellent news for the industry if, say, in 2012, Paul Jacobs repeated his remark: "We've not been a litigious company".
And the industry agreed with him.
Comments (2)
Wow, Paul Jacobs must come from the Richard Milhouse "I am not a crook" Nixon school of veracity!
Maybe he should get a job in the "WMDs in Iraq" area in the current successor's administration.
Posted by Peter B | August 19, 2008 12:34 AM
Posted on August 19, 2008 00:34
Yes, it's one of those great remarks. Funny how these top guys sometimes fail to see things the way the world does.
Posted by David Manners
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August 19, 2008 10:59 AM
Posted on August 19, 2008 10:59