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InterDigital will not limit standard royalty
November 21, 2002
InterDigital Communications, an architect, designer and provider
of wireless technology and product platforms, is declining the invitation
to limit intellectual property royalties for 3G W-CDMA handsets
or infrastructure.
"This doesn't change it one way or the other," Guy Hicks, InterDigital's
vice president of communications and IR told the press. "The question
is, do you have essential intellectual property. If the answer is
yes, we believe the company that has it should be appropriately
compensated."
Ericsson, Nokia, NTT DoCoMo and Siemens early this month agreed
to promote licensing for essential W-CDMA patents at rates proportional
to the number of essential patents owned by each company. The companies
say they intend to set a benchmark for all patent holders of the
W- CDMA technology to achieve fair and reasonable royalty rates.
The companies say their agreement means that any company manufacturing
wireless phones and network infrastructure compatible with the W-CDMA
3G technology will pay patent holders less than 10% of the sale
price of the product in royalties. Those royalty levels have been
expected to reach 25 percent.
Ericsson, Nokia and Siemens are pushing to accelerate W-CDMA deployments
because they have invested heavily in the technology, which will
be the 3G interface for most European networks as well as for a
substantial number of carriers in other markets. However, W-CDMA
device and infrastructure developers trail their rivals on the CDMA2000
side of the 3G fence in producing working networks and devices.
In May this year, Nokia on its own advocated an industry-wide commitment
to limiting intellectual property royalties to 5 percent of the
price of W-CDMA devices or network gear. At that time, it was Qualcomm
who spurned the invitation. "Qualcomm will not agree to any such
arbitrary cumulative limit on royalties," Qualcomm told the press.
Like Qualcomm, InterDigital owns extensive intellectual property
rights in the CDMA space. As well, Hicks says, the company made
hundreds of contributions to the W-CDMA standard development process,
with some 400 accepted and included in the standard.
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