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Tuesday, May 06, 2003 2:36:34 PM
The 2G lawsuit was the only real leverage that IDCC and Ericsson had against each other in the settlement talks. I'm convinced that adding 3G to the discussion would have delayed the settlement indefinitely.
As you recall, Ericsson was already in the process of changing management teams as the case neared trial. Given the disastrous results of Harris vs Ericsson, the new Ericsson team probably wanted to put all 2G litigation behind them and put all the 3G licensing issues in front of them since Ericsson is part of the consortium of US, European and Japanese manufacturers who want to use the 1999 3G patent platform to keep the 3G overall IPR rate to around 5%-10%, down considerably from the 15%-25% overall IPR rate of 2G GSM. QCOM, of course, is the notable exception because they used to have an infrastructure biz and a handset biz, and they still ahve a software biz and a chipset biz to use as chips to secure 3G contracts before anybody else.
Nokia is also a prime mover of that patent consortium and you can now understand why they linked their 3G (FDD) royalty rate to Ericsson's rate. Nokia, of course, got a royalty-free license to 3GG (TDD) because it financed IDCC's TDD R&D and it allowed IDCC to own the patents from that engineering contract.
But are the 3G delays really a problem for IDCC? Within reason, the longer the carriers take to deploy WCDMA, the longer the IPR negotiations industry-wide. The longer the IPR negotiations, the stronger IDCC's financial position gets. The stronger IDCC's financial position gets, the greater IDCC's ability to strenghten its patent portfolio. The stronger IDCC's patent portfolio, the greater IDCC's negotiating leverage......
especially if they can get some of the true technical superstars of the wireless industry to join their team through direct recruitment or acquisitions and provide practical solutions for the wireless industry's most persistent technical bottlenecks in chipsets, power and displays.
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