Qualcomm Says It Don't Need No Stinkin' Nokia Patents
In today's episode of As The Wireless Patents Turn, it's Qualcomm making the noise. After Nokia said yesterday it would pay the company $20 million to cover some royalties for the second quarter, Qualcomm retaliated by filing a request for arbitration in the case, along with rulings that Nokia's continued use of Qualcomm IP after their deal expires Monday represents a decision by Nokia to continue the terms of the current deal, and that if Nokia sues Qualcomm for patent infringement, Qualcomm can simply cut off Nokia's ability to license its patents. Qualcomm's lawyer is also saying that the company may not need any of Nokia's intellectual property, which, if true, would hurt Nokia's bargaining position. All of this talk (from both sides) should be taken with a grain of salt. Qualcomm has an obligation through certain standards bodies to license some of its IP, while Nokia's $20 million payment would certainly seem on the low side. Still, no matter how this spat plays out, it's worth examining what it means for Qualcomm in the long term. A key part of Nokia's argument that it should pay lower royalties is that Qualcomm's IP isn't as critical to 3G as it once was. That claim may be up for some debate, but the bigger issue for Qualcomm is that operators and vendors are examining 4G and alternative technologies in which Qualcomm has minimal IP (though of course it could always buy some) simply because the model of stockpiling patents, trying to control standards bodies and wringing money out of an industry won't win you many friends.Company With Checkered Past Tries To Claim Patent On Cell Phone Buttons
from the back-to-the-drawing-board dept
You might remember a company called Hop-On, which claimed several years ago that it had developed the first "disposable" cell phone. While the company was able to attract a lot of media attention, the phones it was showing off turned out to be nothing more than repackaged Nokia phones. A few years later, Hop-On claimed to really come out with the disposable phones, but they made no impact on the market whatsoever. In the meantime, the company's CEO got indicted for fraud related to a previous company, and was eventually convicted. Last month, he managed to avoid jail time for that crime, and went back to the helm at Hop-On, just in time for the company to announce it's been awarded a patent covering "a MP3 Phone with speakers on the side, in addition to front and side buttons to activate its camera/video features." The CEO adds that he's looking forward to raking in the cash from operators, retailers and handset vendors, since millions of phones meeting this description have been sold in the US. However, the company was awarded a design patent, not a utility patent, so his assertion of being in the money may be just a little bit premature since design patents cover only the ornamental characteristics of the object. Furthermore, design patents aren't especially broad, since they cover one single design of an object. They also must be original -- so the very fact that millions of supposedly infringing handsets were sold before the patent was awarded (since design patent applications aren't published until the patent is awarded) might undermine the company's claim just a little bit.Nokia Draws (Another) Line In The Sand With Qualcomm
Ahead of Monday's expiration of a significant licensing agreement between the companies, Nokia and Qualcomm continue to jockey for position in their ongoing patent spat. Earlier in the week, Qualcomm filed two more lawsuits, but Nokia announced today it paid Qualcomm $20 million to cover second-quarter royalties for a group of Qualcomm UMTS patents provided through the European standards group ETSI. The company notes that these patents are unrelated to the CDMA and WCDMA patents at the heart of the bigger dispute, but some analysts say this announcement is significant because it not only signals how much the company is willing to pay, but also because it could help Nokia ward off claims of willful infringement that could subject it to heavy punitive damages should it lose in court. With so much at stake for both companies, some sort of settlement seems inevitable, and it's hard not to see Qualcomm as being on the back foot here, since the best result it can hope for is a continuation of the current royalty rate of 4.5 percent. But that seems very unlikely, particularly as Nokia is quick to note that not only does the licensing agreement expire on Monday, but it's also now fully paid-up on a lot of Qualcomm's 2G CDMA patents.Sagem Finds It's Better Off With Its Brand In The Back Seat
French vendor Sagem was never much more than a bit player in the handset market, but a couple of recent deals suggest the company could be finding some success with a new strategy as on ODM (original design manufacturer) creating handsets for companies with stronger brands. It's announced today that it will build a low-cost handset for Vodafone that the operator will sell under its own brand beginning in June. Sagem's done work with Vodafone before, building its Vodafone Simply handsets, designed for people looking for no-frills and simplified devices. The Vodafone news comes a week or so after Sony Ericsson said it would outsource development and manufacturing of its low-end devices to Sagem. This deal lets Sony Ericsson build up its low-end portfolio -- which has been fairly thin to date -- and make a bigger play in high-growth emerging markets like India and China. For Sagem, emphasizing its ODM business is a smart move as it allows the company to leverage its expertise and manufacturing capacity and sell handsets without having to worry about marketing its relatively weak global brand. Still, some of the same factors are at play here as in the wider handset market, meaning margins will be pretty thin. However, if it can make them work, it may find more interest from other handset vendors looking to outsource their low-end handset business, while the interest from operators in low-cost white-label devices will remain strong.Verizon Wireless Slowly, Quietly, Backing Away From Misleading Claims Of Unlimited Service
from the shhhh...-don't-tell-anyone dept
For years, Verizon Wireless has been pushing its EVDO wireless internet service as "unlimited" -- but then cutting off users if they passed some unknown, unstated "cap." When pushed on this, a Verizon Wireless rep actually said "It's unlimited amounts of data for certain types of data." And... if you happened to go over a certain amount of total data, then they insisted you absolutely must have been using it for "other" types of data -- even if they had no actual proof. For a while it was thought that the cap was 10gigs, but later it was revealed that it was merely 5gigs of data per month -- which these days, really isn't all that much for some people. We've always wondered why no one ever hit Verizon Wireless with a false advertising suit over the claim of "unlimited," but it never happened. However, it appears that Verizon Wireless has been slowly backing away from the unlimited claim, and is now putting the 5gig limit into the terms of service. They still do use "Unlimited" in their press releases, but seem to be backing away from it in their ads. There's nothing wrong with limiting the total bandwidth that can be used, so as long as the company was clear about it. It's unclear why it took years for Verizon Wireless to decide that actually being (somewhat) honest about what it was selling was a good idea.Company Says Spectrum Auctions Don't Work, So Just Give It Some Airwaves Instead
from the nice-try dept
Different countries' telecom regulators take different approaches to handing out wireless spectrum. Some use so-called beauty contests, where interested companies file proposals for the airwaves in question, and the regulator judges them on some set of criteria and gives out licenses. In the US and many other places, regulators use auctions, selling off licenses to the highest bidder. The FCC's auction system can get quite complex, with all sorts of different licenses for different areas and different amounts of spectrum, and discounts for smaller companies and bidders. While we wait for a complete overhaul of the spectrum allocation process, in many cases, auctions are a "least worst" solution. The FCC plans to auction off some 700 MHz spectrum this summer, and its properties make it very desirable for wireless broadband providers. Part of this spectrum has already been allocated for public-safety use, and some companies are trying to use that angle circumvent the auction process and grab more spectrum for lower prices, or even free. The general idea is that they would build a nationwide network and lease capacity on it to operators and service providers, and earn revenue from that. They'd then also charge public-safety groups for access to the network, but would give their traffic priority on it, particularly during emergencies. There have been other, similar proposals for other spectrum in the past, including one group who wants a 15-year license for some 2100 MHz spectrum for free, then promises to offer free ad-supported service across the country, and to pay 5% of the revenues from a faster, paid service to the government. While we're skeptical of any plan that promises to build a nationwide wireless network, then offer free service, given the huge costs of building such a network, we noted at the time it was nice to see people exploring alternatives to spectrum auctions.Now, the company behind that proposal, M2Z, is back with an in-no-way-at-all-biased survey it says shows that spectrum auctions don't always work. While that point is pretty clear -- just look at the NextWave fiasco for proof -- it's also pretty clear that this study really can't be regarded as an unbiased, objective view of the topic. While spectrum auctions certainly aren't perfect, it's hard to see simply giving away spectrum to anybody that puts together a plan and gets some VC as an ideal method, either. In any case, this all highlights the interest in and need for a reexamination of the FCC's spectrum allocation policies, and in particular, a look at how creating a much more open, flexible market for spectrum (including opening more unlicensed spectrum) could be beneficial.