InterDigital Inc (IDCC)

[rmarchma]

Rox re Siemens and joint ventures

Guess I don’t quite understand how OEM joint ventures work. The Siemens/NEC 3G infrastructure joint venture itself is not licensed with IDCC, unlike the Sony/Ericy handset joint venture. Both Siemens and NEC are individually licensed with IDCC. However, Siemens is not licensed for enough of IDCC’s 3G IPR to make a standard-compliant 3G product according to IDCC. On the other hand, NEC is fully licensed to manufacture 3G standard-compliant products without infringing IDCC’s IPR.

The Siemens/NEC joint venture itself does not pay IDCC royalty on the 3G infrastructure, but only NEC. If IDCC is only entitled to one royalty amount on a joint venture product, then doesn’t it appear that NEC pays the full rate and Siemens’ pays nothing? Or does NEC charge the IDCC infrastructure royalty payment back to the joint venture, and then Siemens/NEC split the resulting net income, rather than the revenues, of the joint venture? Or does NEC possibly send Siemens a bill for half the infrastructure royalty that they paid to IDCC?

According to your theory, wouldn’t it have been better for Siemens to have gotten the updated 3G license with IDCC rather than NEC? Siemens might pay less royalty for 3G than NEC, because some of IDCC’s 3G patents are paid-up under the Siemens agreement, whereas no 3G patent was paid-up under the NEC license. Same thing would apply to a Siemens/Datang joint venture.

However if Siemens were to license 3G at a lesser rate with IDCC than their venture partners, could they even pass it on to a joint venture without IDCC’s approval? It would seem like Siemens would be sublicensing IDCC rights to the joint venture. I don’t think any of IDCC license agreements after Qualcomm allow any sublicensing by any IDCC licensee.