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No. of Recommendations: 38
This is my first post on this board. Sorry if this does not completely fit into this board but with all the talk about QCOM I felt it was warranted.

If market studies show that the public is ready for 3G, then SUE Nokia and NTT DoCoMo; do it right this second.

History shows what Nokia and the GSMers are doing. The crook Edison stealing AC from Telsa/Wstinghouse is a similar situation and Sarnoff/RCA stealing television from Farnsworth and later color television from CBS is an exact exercise in what Nokia is trying to do to Qualcomm.

faahrley_h_qualcomm on “Qualcomm's Rocket To The Stars” Yahoo! Club board shared a few weeks ago the history of how Edison bribed government officials to outlaw certain frequencies, conspired with bankers to financially harm Westinghouse and butchered (electrified in public) dogs and cats to scare the public away from AC in efforts to bring Telsa and Westinghouse down because of their control over AC, only to then embrace and champion AC once he succeeded and got his hands on the patents. This seems similar to Nokia efforts but the RCA analogy is almost a perfect fit.

The September/Ocotober 2000 Technology Review has a good article titled “Who Really Invented Television.” It tells the story of how Farnsworth invented television based on horizontal line positioning of electrons that he visualized at age 14. With seed money he built a transmitter and television in the late 1920's and publicly demonstrated it a few years later. Sarnoff of RCA offered $100,000 for Farnsworth patents and offered him a job. Farnsworth refused. Sarnoff then gave a huge research budget and hired top engineers with the intent to backwards engineer Farnsworth television. He brought suit against Farnsworth only to bankrupt (his attorneys felt that he would not win.) He bribed and threatened any companies that licensed Farnsworth technology, causing them to break agreements with Farnsworth, leaving Farnsworth with no one to commercially deploy his television. After many years RCA finally built a working television system (just like Nokia is trying to build around Qualcomm's patents and slow up deployment of 3G until it can) demonstrating it at the World's Fair. Even though Farnsworth had publicly demonstrated television many years earlier and Germany had broadcast Olympic games years before with Farnsworth's technology, the press dubbed RCA the FIRST (like the press calling WCDMA European and Japanese technology and competitor to CDMA.)

Farnsworth heirs recall that Farnsworth and his attorneys were certain it would have been any easy case to win against Sarnoff and RCA, at that point but Farnsworth did not initiated a suit in hopes of getting a license from RCA (I think this may be the foolhardy reason that Qualcomm is not bring a lawsuit against Nokia now.) Farnsworth did get a license a few years later but just a one time $1 million and with his growing legal and development bills he was still bankrupt even with that.

After it deceitful win, RCA conveniently kept television growth down (market of only about 6,000 sets) until right when Farnsworth patents expired (in case he did later have a a legal win – there would be a smaller market to base damages.) Shortly after expiration, RCA fully promoted television and had the market in tens of millions of sets in a few years (almost 1,000,000% growth – how convenient.)

Sarnoff did not stop there. After controlling radio and first generation television, Sarnoff went after CBS who had the first color television system. Sarnoff/RCA bribed and persuaded the government to block CBS color television system deployment because it would kill the black-and-white television industry. This bought Sarnoff time to develop his own color system. And boy did he. He made it with a good RCA-biased twist. It would only be backwards compatible to RCA black-and-white television. Any other black-and-white sets would need a $100 RCA adapter to decode the signal. (any similarity between WCDMA backwards compatibility with GSM???????????)

The article then leaves one with a lesson and to me, Qualcomm with advice: “Unless it is somehow taken away by force, what the monopolist has on his side is time.” This, to me, is the whole of Nokia's and NTT DoCoMo's strategy, buy time in the chance you can work around Qualcomm.

Qualcomm needs to sue both now to stop their efforts. Do not be a nerd like Farnsworth and just let them walk over you in the feeble chance they will license from you. Also, when the suit is filed, Qualcomm should publicly state that it will NEVER license either Nokia or NTT DoCoMo after the suit is won.
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No. of Recommendations: 6
Callisto,

let me start by stating that I own both NOK and QCOM shares, so I really want to see both companies flourish (and I think they will).

I'm having a hard time understanding what drives you and other QCOM-diehards portray the rest of the industry as some sort of villains that is ganging up against QCOM and, that's a new twist, illegally so.

With the billions of $$s market size we're talking about, do you think it would ever be as easy as QCOM setting the price and the rest just putting up with it and quietly paying the bill? Hell, people spend hours bargaining when they buy a used car and you expect Nokia to just shut up and pay. So far I'm not aware of any illegal activities, and it's anyone's right to challenge QCOM's patent claims in court - that's what courts are for in a legal system. Your suggestion they refuse to license anyone filing suit would require a fairly twisted understanding of law and justice - the word blackmail comes to mind. Commercial suicide is a close second - it reminds me of kids in the playground not of the way to professionally conduct a business.

And as a NOK shareholder, I want them to be damn sure they have to pay before they do. That QCOM won every single suit so far is good for them, but with the sums involved I think the industry was right to challenge their claims. There's nothing illegal or immoral about seeking legal certainty. If there's a 5% chance of winning the case and saving billions of $$ to the company, I would immediately sack any CEO who doesn't pursue that chance first before committing to the license.

My impression is that QCOM went for a head-on collision with the rest of the industry, putting all their faith in their seemingly invincible IPR portfolio. Good luck to them, but I feel there might have been a smarter way of achieving their goals - like being a bit more flexible in their approach rather than going for alienating everyone you ultimately want to do business with.

And remember, QCOM/Spinco needs something from the others, too. As is becoming more and more apparent, the overwhelming part of the world is going for W-CDMA (and personally I think QCOM contributed a great deal to that with their posturing), so Spinco will need to negotiate cross-licenses.

I'm not sure what exactly you want QCOM to sue NOK for (for not buying CDMA?), and I would ask who is the monopolist here? NOK is strong but by no means a monopolist.

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<< If there's a 5% chance of winning the case and saving billions of $$ to the company, I would immediately sack any CEO who doesn't pursue that chance first before committing to the license. >>


Of course, there's another side to that coin. As is the case with Rambus, Qualcomm may elect not to license a company that has challenged it in court and been defeated. Rambus has vowed not to license its opponents under these circumstances, their opponents being memory makers.

So, should an aggressive CEO choose to oppose Qualcomm in court, there could be a considerable downside to this action above and beyond simply losing the decision...that 5% chance may well not be worth the risk.


<< My impression is that QCOM went for a head-on collision with the rest of the industry, putting all their faith in their seemingly invincible IPR portfolio. Good luck to them, but I feel there might have been a smarter way of achieving their goals - like being a bit more flexible in their approach rather than going for alienating everyone you ultimately want to do business with. >>



Gorillas have a way of "alienating" competitors and even their own value chain...that's the power of IP. Microsoft is a good example. And shouldn't QCOM be commended for playing their strongest hand in the same way that you're giving Nokia credit for exploiting its legal right to go to court against QCOM? It's just good business, right?



<< And remember, QCOM/Spinco needs something from the others, too. As is becoming more and more apparent, the overwhelming part of the world is going for W-CDMA (and personally I think QCOM contributed a great deal to that with their posturing), so Spinco will need to negotiate cross-licenses. >>



With all due respect, it seems like the W-CDMA crowd is doing most of the "posturing" here. In defense of QCOM, at least they have the support of the courts for their IP claims. As for the "overwhelming" majority going with W-CDMA, that's speculation, I think.


I don't hear QCOM saying that they want to own the world...those are more the thoughts and words of their detractors. Irwin Jacobs has said repeatedly that they just want CDMA to be adopted, whatever the "flavor"...that they're more than happy to compete in the CDMA chip market, as long as they receive the royalties to which they're legally entitled.




rex
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Rex,

you're right, maybe I went a bit over the top. I guess my real point is, sorting the (investment) world in good guys and bad guys isn't conducive to clear and rational investment decisions.

I also agree that yes, the beauty of the Gorilla game is that Gorillas wield the power to steamroller their opponents. My concern is whether QCOM started doing that a bit too early, before they had a firm lock on the choice of standards.

But I fully realise that what companies state in a press release and how they behave in boardroom negotiations are two different things, and none of the companies involved has an interest in letting everyone know what really goes on. The only clear interest you have to acknowledge is for both sides to portray the other side as the bad guy, in order to pull some public support. This is something we should bear in mind when reading the various statements.

Eckhard
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No. of Recommendations: 6
Sorry, Callisto has it right.
Look at RMBS for the answer.
RMBS sues infineon in Germany "europe" where the first to patent not the first to invent make it so.

Blackmail. No it is not.
It is costly to be fighting these suits all the time.
If NOK wants to take a chance that they can win after countless others have lost, Hell, let them go for it.

Another way of looking at is "As a QCOM shareholder" (especially one holding QCOM only and not NOK) wouldn't you want your company to do everything possible to get the revenue it is entitled to.

In that case, QCOM MUST PLAY HARDBALL.
The industry always fights and resents the gorilla.
The gorilla must stand up for its rights whether or not one personally thinks it makes them a "bully".

Take a look at RMBS for how the game should be played!

RMBS filed against Infineon in Europe first, where discovery rules are much more strict and where there is no jury to befuddle, and where cases are decided far quicker that they are in the US, and where its legal issues to a judge instead of garbage to a jury, RMBS has brought this to a head this year.

RMBS has temporarily delayed its action against MU in the US. If RMBS wins against Infineon, Infineon will be denied a license. TATE HAS STATES SO PUBLICALLY! Infineon has untill DEC 22 to think about it (That's how fast things happen outside the US). If Infineon folds (or loses in court), Hyundai will settle IMMEDIATELY IMHO.

This will leave poor MU alone and stranded. Yes MU could take it to court in the US at the risk of losing their entire business. Would they have the balls? HELL NO IMHO.

RMBS is playing LEGAL hardball BRIALLIANTLY. QCOM should take a lesson from Tate and company on this.






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