Wednesday, August 06, 2003 7:09:22 PM
Pardon my naiveness, but let's see if I'm finally understanding what you are saying. In your opinion, the 3G indemnifier is not providing indemnification for an entire standard, but only for certain specific patents within that standard. Thus if the indemnifier has sublicense rights to let's say 5 essential IDCC CDMA patents that apply to the IS-95, CDMA2000, and WCDMA standards, then they would only indemnify those 5 patents, if IDCC subsequently sued for infringement.
However IDCC could still have let's say 4 more essential patents aplicable to CDMA2000 and 24 more essential patents for WCDMA, in addition to the 5 sublicensed patents. These additional essential CDMA patents would NOT be subject to indemnification. Therefore a potential licensee would still need an IDCC license to produce standard-compliant CDMA2000 and WCDMA products. However, the potential licensee would want to pay a lower royalty rate so as not to double-pay for the same 5 essential patents, used in my illustration, which are already licensed through the indemnifier.
I have said previously that IDCC's worst mistake was the 1994 agreement with Qualcomm IMO. That is the only contract that IDCC sublicensed any patent rights, and it caused them to almost completely lose out on any IS-95 royalties. Evidently IDCC is still suffering from that contract even today as they try to license for 3G. There is no doubt that QCOM is the indemnifier, and is using the sublicense rights under the 1994 settlement as their basis. BTW the second-worst contract in IDCC's history is the 1999 agreement with Nokia IMO. But the deficiencies in that contract will be the subject matter for another day.
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