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JaneAusten..."I've heard a lot of people postulate whether QCOM will receive royalties if 3G goes the W-CDMA route. Does anyone definitively have the answer to this one? If W-CDMA is adopted, will there be another patent infringement battle? From the posts on this board, I suspect another battle is inevitable."

I know that others see this differently but worrying about another IPR battle on 3G for Qualcomm is not among the things that keep me up at night as a Q shareholder. Here's some background....

Prior to March '99 Ericsson claimed IPR on cdmaONE, W-CDMA and CDMA2000. They sued Qualcomm alleging that they had violated it's soft-handoff (as well as other ones) patents and claimed damages. The cynical among us may think that they were simply attempting to stop the spread of CDMA and to eventually gain a better position as it came to 3G licsensing. They failed miserably.

In March '99 Qualcomm sold their money losing infrastructure division to Ericsson and simaltaneously licensed Ericsson for cdmaONE, CDMA2000 and W-CDMA. The interesting portion to the agreement was that Qualcomm stated that Ericsson would be paying the same percentage regardless of the mode they used. They also stated that Ericsson would be paying in the same range as other cdmaONE licensees. What does all this mean? Ericsson will be paying somewhere between 2.5% and 6% royalties on every piece of CDMA equipment they make. This includes W-CDMA.

Nokia and other manufacturers may battle....but since carriers like NTT Docomo will have options (CDMA2000) they had better not take too long.

Here's another take from Gregg Powers. He helps run a fund which was Qualcomm's largest shareholder for a long-time.


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