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I don't understand what the problem is. Qualcomm invents something, patents it, and then they have a monopoly. Apple's answer should be to open their own EE la

I don't understand what the problem is. Qualcomm invents something, patents it, and then they have a monopoly. Apple's answer should be to open their own EE labs and start inventing things and getting their own patents. Instead, they complain and go to court. Of course, that assumes the patents are good ones.

dpark 9y ago
> I don't understand what the problem is. Qualcomm invents something, patents it, and then they have a monopoly. Apple's assertion is that the pricing is not Fair or Reasonable, which Qualcomm agreed to as a concession to make their patents part of the cellular network standards. > Apple's answer should be to open their own EE labs and start inventing things and getting their own patents. Instead, they complain and go to court. Apple cannot simply invent their own cell technology and have it work with the cellular networks that actually exist.
- hajile 9y ago
  Qualcomm's R&D budget is around 25% of net sales. Google, Cisco, Intel, and Microsoft (for example) are considered big spenders, but they only spend 12-15% of net sales (apple spends 2.2% of net sales on R&D). Qualcomm sounds a lot more fair and reasonable than any of the other multi-billion dollar companies I know of.
  - AlphaSite 9y ago
    Actually don’t they spend 5-7%? It’s not huge percentage wise, but it’s still 10billion.
    - hajile 9y ago
      My number was taken from another source (I lost it). You can get higher or lower numbers by comparing to other things. For an apples to apples comparison (latest Qualcomm data I found was 2015) gives 3.4%. http://appleinsider.com/articles/15/10/28/apple-rd-spending-hit-81b-in-2015-suggests-continued-work-on-massive-project http://appleinsider.com/articles/15/10/28/apple-rd-spending-...
  - threeseed 9y ago
    Using a percentage to compare R&D budgets is incredibly stupid. If I own a company with 100K revenue and spend 5K on R&D that doesn't make me more innovative, relevant or noteworthy than Apple. It's all about the amount and quality of R&D that is important.
  - pwinnski 9y ago
    Percentages for something like this are borderline-meaningless. Qualcomm spends an average of 1.325B per quarter, and peaked in 2014 with 1.429B.[0] Apple spends an average of 1.959B per quarter, but that has been steadily rising to 2.937B last quarter.[1] [0] https://ycharts.com/companies/QCOM/r_and_d_expense https://ycharts.com/companies/QCOM/r_and_d_expense [1] https://ycharts.com/companies/AAPL/r_and_d_expense https://ycharts.com/companies/AAPL/r_and_d_expense
- sgift 9y ago
  The problem seems to be that there's no definition what exactly FRAND actually means. The only thing everyone seems to agree on is that "you cannot exclude companies from licensing your tech", but apart from that it seems to be wild west.
  - deleted 9y ago
    [deleted]
  - tooltalk 9y ago
    @sgift: no, there is some definition of what FRAND is. It's just that Apple doesn't like it. In once instance, Apple's own FRAND expert came out testifying against Apple (in a 2012 ITC case involving Samsung and Apple). And no, under FRAND, Qualcomm can refuse license.
    - dpark 9y ago
      > @sgift: no, there is some definition of what FRAND is. There really isn't a clear definition for "fair" or "reasonable", which is why this ends up in court. > And no, under FRAND, Qualcomm can refuse license. No. That's the "non-discriminatory" part. This one is actually pretty clear.
      - tooltalk 9y ago
        I'm not sure where you are getting it from, but according to ETSI IPR Guide, Section 1.11 (http://www.etsi.org/images/files/IPR/etsi-guide-on-ipr.pdf http://www.etsi.org/images/files/IPR/etsi-guide-on-ipr.pdf): The purpose of the ETSI IPR Policy is to facilitate the standards making process within ETSI. In complying with the Policy the Technical Bodies should not become involved in legal discussion on IPR matters. The main characteristics of the Policy can be simplified as follows: • Members are fully entitled to hold and benefit from any IPRs which they may own, including the right to refuse the granting of licenses. Sure, let's also look what is allowed and not under FRAND based on Apple's past allegation against FRAND patent holders. USITC 337-TA-794 (Samsung) http://www.essentialpatentblog.com/wp-content/uploads/sites/64/2013/07/337-TA-794-Commission-Opinion-Public-Version.pdf http://www.essentialpatentblog.com/wp-content/uploads/sites/... Apple alleged that Samsung violated FRAND terms in the following ways: 1) Apple argues that Samsung was obligated to make an initial offer to Apple of a specific fair and reasonable royalty rate." (p.60) ITC's finding: The evidence on record does not suppmt Apple's position. Apple's witness on ETSI policy and practice testified the ETSI IPR Policy document has "no precise definition ofFRAND" and that it is expected that parties arrive at a FRAND license through negotiation." (p. 60) Conclusion: Apple's own witness testified that Samsung is under no obligation to make a FRAND "initial offer." Apple and their own expert clearly knew about it. 2) Apple also criticizes Samsung's attempt to negotiate a cross-license of both parties' mobile telephone patent portfolios." ITC's finding: We cannot say that Sam sung's offers in this regard are unreasonable. The record contains evidence of more than 30 Samsung licenses that cover the '348 and '644 patents. See RX-173C, RX-178C, RX-188, RX-189C, RX-191C, RX-193C to -209C, RX-421C, RX-423C. All of those licenses include a cross-license to the licensee's portfolio. That evidence supports a conclusion t~at a portfolio cross-license offer is typical in the industry and reasonable. ... Apple has offered no evidence to suggest that such portfolio cross- licenses are atypical in the industry. 19 In fact, Apple's own witness on ETSI policies affirmed that ETSI anticipates cross-licensing may be part of the process of negotiating a FRAND license between two parties. Conclusion: cross-licensing was unfair in the eyes of Apple only, not everyone else. Apple had zero evidence to backup their claims, and their own expertise again came out against it (meaning they clearly knew about the rule). 3) Apple also complains that Samsung's offer is unreasonable because [some redacted terms Apple claimed was unreasonable] ITC's finding: Apple's argument lacks merit for several reasons. First, as has been articulated in comments to the Commission from Qualcomm, Ericsson, and Samsung, a FRAND license could encompass a range of reasonable terms. A reasonable cross-license with one competitor may involve a balancing payment to Samsung while a reasonable cross-license with another competitor may involve Samsung making a balancing payment. Both types of agreements may be reasonable, depending on the two portfolios at issue and each party's respective volume of sales. F" Conclusion: this is clearly beyond common sense. Apple is just playing dumb. I could go on and on and point out Apple's willful ignorance on FRAND. And, yes, Apple's appeal to ignorance or your ridiculous claim that "There really isn't a clear definition for "fair" or "reasonable"," is not much of a sensical arguement.
- RandVal30142 9y ago
  >Apple's assertion is that the pricing is not Fair or Reasonable I assert Apple's markup on products is not fair or reasonable. Perhaps Qualcomm's demands are in line with the true value of the device and not the pie in the sky numbers Apple wants.
  - deleted 9y ago
    [deleted]
  - MBCook 9y ago
    FRAND is a legal term in a contract. You can’t just arbitrarily apply it to something that’s not under a contract (Apple’s device prices) and say that because you don’t like that due to a non-legal system definition of FRAND Qualcomm is off the hook.
    - RandVal30142 9y ago
      Not saying Qualcomm is on or off any hook but perhaps Apple's valuations are a bit off and Qualcomm's closer to reality.
      - threeseed 9y ago
        What you are saying has no basis in fact or reality. FRAND has a specific meaning. You don't get to agree to parts of it just because the company you are licensing to has more money to spend.
- tooltalk 9y ago
  Yes, Apple has made the same assertion against every FRAND patent holders for many, many years-- without zero evidence. This time around, it's slightly different in that Apple successfully engineered a scheme in which KFTC convicted Qualcomm of anti-competitive licensing practices. Apple is late to the wireless game and now they are trying to find a way to pay as little as possible while not contributing virtually nothing to it and being one of the largest benefactors of the tech.
deleted 9y ago
[deleted]
noselasd 9y ago
It's not that black and white. When someone has IP that is included in an international standard, there are room for debate.

dpark 9y ago

> I don't understand what the problem is. Qualcomm invents something, patents it, and then they have a monopoly. Apple's assertion is that the pricing is not Fair or Reasonable, which Qualcomm agreed to as a concession to make their patents part of the cellular network standards. > Apple's answer should be to open their own EE labs and start inventing things and getting their own patents. Instead, they complain and go to court. Apple cannot simply invent their own cell technology and have it work with the cellular networks that actually exist.

hajile 9y ago
Qualcomm's R&D budget is around 25% of net sales. Google, Cisco, Intel, and Microsoft (for example) are considered big spenders, but they only spend 12-15% of net sales (apple spends 2.2% of net sales on R&D). Qualcomm sounds a lot more fair and reasonable than any of the other multi-billion dollar companies I know of.
- AlphaSite 9y ago
  Actually don’t they spend 5-7%? It’s not huge percentage wise, but it’s still 10billion.
  - hajile 9y ago
    My number was taken from another source (I lost it). You can get higher or lower numbers by comparing to other things. For an apples to apples comparison (latest Qualcomm data I found was 2015) gives 3.4%. http://appleinsider.com/articles/15/10/28/apple-rd-spending-hit-81b-in-2015-suggests-continued-work-on-massive-project http://appleinsider.com/articles/15/10/28/apple-rd-spending-...
- threeseed 9y ago
  Using a percentage to compare R&D budgets is incredibly stupid. If I own a company with 100K revenue and spend 5K on R&D that doesn't make me more innovative, relevant or noteworthy than Apple. It's all about the amount and quality of R&D that is important.
- pwinnski 9y ago
  Percentages for something like this are borderline-meaningless. Qualcomm spends an average of 1.325B per quarter, and peaked in 2014 with 1.429B.[0] Apple spends an average of 1.959B per quarter, but that has been steadily rising to 2.937B last quarter.[1] [0] https://ycharts.com/companies/QCOM/r_and_d_expense https://ycharts.com/companies/QCOM/r_and_d_expense [1] https://ycharts.com/companies/AAPL/r_and_d_expense https://ycharts.com/companies/AAPL/r_and_d_expense
sgift 9y ago
The problem seems to be that there's no definition what exactly FRAND actually means. The only thing everyone seems to agree on is that "you cannot exclude companies from licensing your tech", but apart from that it seems to be wild west.
- deleted 9y ago
  [deleted]
- tooltalk 9y ago
  @sgift: no, there is some definition of what FRAND is. It's just that Apple doesn't like it. In once instance, Apple's own FRAND expert came out testifying against Apple (in a 2012 ITC case involving Samsung and Apple). And no, under FRAND, Qualcomm can refuse license.
  - dpark 9y ago
    > @sgift: no, there is some definition of what FRAND is. There really isn't a clear definition for "fair" or "reasonable", which is why this ends up in court. > And no, under FRAND, Qualcomm can refuse license. No. That's the "non-discriminatory" part. This one is actually pretty clear.
    - tooltalk 9y ago
      I'm not sure where you are getting it from, but according to ETSI IPR Guide, Section 1.11 (http://www.etsi.org/images/files/IPR/etsi-guide-on-ipr.pdf http://www.etsi.org/images/files/IPR/etsi-guide-on-ipr.pdf): The purpose of the ETSI IPR Policy is to facilitate the standards making process within ETSI. In complying with the Policy the Technical Bodies should not become involved in legal discussion on IPR matters. The main characteristics of the Policy can be simplified as follows: • Members are fully entitled to hold and benefit from any IPRs which they may own, including the right to refuse the granting of licenses. Sure, let's also look what is allowed and not under FRAND based on Apple's past allegation against FRAND patent holders. USITC 337-TA-794 (Samsung) http://www.essentialpatentblog.com/wp-content/uploads/sites/64/2013/07/337-TA-794-Commission-Opinion-Public-Version.pdf http://www.essentialpatentblog.com/wp-content/uploads/sites/... Apple alleged that Samsung violated FRAND terms in the following ways: 1) Apple argues that Samsung was obligated to make an initial offer to Apple of a specific fair and reasonable royalty rate." (p.60) ITC's finding: The evidence on record does not suppmt Apple's position. Apple's witness on ETSI policy and practice testified the ETSI IPR Policy document has "no precise definition ofFRAND" and that it is expected that parties arrive at a FRAND license through negotiation." (p. 60) Conclusion: Apple's own witness testified that Samsung is under no obligation to make a FRAND "initial offer." Apple and their own expert clearly knew about it. 2) Apple also criticizes Samsung's attempt to negotiate a cross-license of both parties' mobile telephone patent portfolios." ITC's finding: We cannot say that Sam sung's offers in this regard are unreasonable. The record contains evidence of more than 30 Samsung licenses that cover the '348 and '644 patents. See RX-173C, RX-178C, RX-188, RX-189C, RX-191C, RX-193C to -209C, RX-421C, RX-423C. All of those licenses include a cross-license to the licensee's portfolio. That evidence supports a conclusion t~at a portfolio cross-license offer is typical in the industry and reasonable. ... Apple has offered no evidence to suggest that such portfolio cross- licenses are atypical in the industry. 19 In fact, Apple's own witness on ETSI policies affirmed that ETSI anticipates cross-licensing may be part of the process of negotiating a FRAND license between two parties. Conclusion: cross-licensing was unfair in the eyes of Apple only, not everyone else. Apple had zero evidence to backup their claims, and their own expertise again came out against it (meaning they clearly knew about the rule). 3) Apple also complains that Samsung's offer is unreasonable because [some redacted terms Apple claimed was unreasonable] ITC's finding: Apple's argument lacks merit for several reasons. First, as has been articulated in comments to the Commission from Qualcomm, Ericsson, and Samsung, a FRAND license could encompass a range of reasonable terms. A reasonable cross-license with one competitor may involve a balancing payment to Samsung while a reasonable cross-license with another competitor may involve Samsung making a balancing payment. Both types of agreements may be reasonable, depending on the two portfolios at issue and each party's respective volume of sales. F" Conclusion: this is clearly beyond common sense. Apple is just playing dumb. I could go on and on and point out Apple's willful ignorance on FRAND. And, yes, Apple's appeal to ignorance or your ridiculous claim that "There really isn't a clear definition for "fair" or "reasonable"," is not much of a sensical arguement.
RandVal30142 9y ago
>Apple's assertion is that the pricing is not Fair or Reasonable I assert Apple's markup on products is not fair or reasonable. Perhaps Qualcomm's demands are in line with the true value of the device and not the pie in the sky numbers Apple wants.
- deleted 9y ago
  [deleted]
- MBCook 9y ago
  FRAND is a legal term in a contract. You can’t just arbitrarily apply it to something that’s not under a contract (Apple’s device prices) and say that because you don’t like that due to a non-legal system definition of FRAND Qualcomm is off the hook.
  - RandVal30142 9y ago
    Not saying Qualcomm is on or off any hook but perhaps Apple's valuations are a bit off and Qualcomm's closer to reality.
    - threeseed 9y ago
      What you are saying has no basis in fact or reality. FRAND has a specific meaning. You don't get to agree to parts of it just because the company you are licensing to has more money to spend.
tooltalk 9y ago
Yes, Apple has made the same assertion against every FRAND patent holders for many, many years-- without zero evidence. This time around, it's slightly different in that Apple successfully engineered a scheme in which KFTC convicted Qualcomm of anti-competitive licensing practices. Apple is late to the wireless game and now they are trying to find a way to pay as little as possible while not contributing virtually nothing to it and being one of the largest benefactors of the tech.

deleted 9y ago

[deleted]

noselasd 9y ago

It's not that black and white. When someone has IP that is included in an international standard, there are room for debate.