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There is nothing wromg with MFL provisions. IDCC got into trouble by putting a compensation incentive based on the front payments of OEM with no requirement of uniformity. It was close find em and close em and let the OEM add any clauses they wanted.
MFL clauses are an absolute requirement in today's world. All of the items that you list can be accomplished with a MFL clause. All an MFL guarantees is an equal commercial economic treatment of the companies within a sector. This is why I cannot understand the problems that IDCC is having in 3g unless they are stuck trying to tailor the licenses. If we have essential patents in all modes of 3g, then why not set a deadline for signing the license for the portfolio and any new or continuation patents for a period of years save and except TDD which we may have already compromised. The timely execution of the license at the base rates of an NEC will entitle the licensee to participate in a number of discount programs tied to dollar volume, advance payments, usage of chip partner products, usage of future software and any other programs that will be offered to the companies licensed by x date. All companies will have an equal opportunity to come on board by x date and they will all be entitled to MFL treatment. Those companies that do not license by x date will still be offered the base rates, but will be ineligible to participate in the discount programs for a period of two years. This may stimulate a market leader to sign the dotted line putting Nok in a real quandry under the 1999 agreement. The uniformity of the licenses will knock any necessity for arbitration out of the picture. While I understand the value added program is a nice concept, I would think that all licensees should be on board before they are eligible to participate in such programs. Further, in an effort to provide a level playing field, the company will enforce its patent claims against any manufacturer that remains unlicensed for a specific period of time after the x date. This will negate the necessity for large front money deals and incent the early manufacturers to make use of advance payment programs. It will also create a relationship that encourages the manufacturer to look into our software as it is developed, our jointly produced chip programs and our engineering support services.
We also have to be careful with product offerings that may include the technology of others necessitating a cross license with the more successful OEM's. Unless the margin on the products is very good and the market acceptance is very clear, stepping into manufacturing at this time is very risky and can significantly effect the revenue sought to be generated from our R&D with licensing business plan.
This of course is just my opinion and perhaps Learning2 and others can point out any flaws in the ointment. I am really getting interested in the marketing area because it is just too confusing to me that IDCC does not have a larger license base by now if they have essential patents in every mode of 3g. I fully understand the 2g problems and am now wanting to understand the 3g holdup. I do not believe that the indemnifier example in the 10k is a problem. I am trying to figure out if one on one is a slow down and if a global approach as I have laid out is a viable plan in this type industry. Sometimes the answer may be right in front of us, but we do not recognize it because we are trying so hard under the existing game plan.
Have a good weekend. I will be on the road and will look in on Sunday evening.
MO
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