11 ms·

Qualcomm shook down the cell phone industry for almost 20 years (2019)

253 points by ddtaylor 4y ago

stevenjgarner 4y ago
Anybody want to summarize the "scathing 233-page opinion" how Qualcomm's patent licensing "violated American antitrust law". This article basically explains how Qualcomm was intelligent about protecting their proprietary position. It does not seem to explain how that protection was illegal.
- yonran 4y ago
  I think the crux of the article is this: they used the protected monopoly on one market (e.g. CDMA modems) to gain an unfair advantage in the other markets (all the other chips in a cell phone). > Qualcomm's patent licensing fees were calculated based on the value of the entire phone, not just the value of chips that embodied Qualcomm's patented technology. This effectively meant that Qualcomm got a cut of every component of a smartphone—most of which had nothing to do with Qualcomm's cellular patents.
  - radicaldreamer 4y ago
    Do competitors or manufacturers using other vendors (Huawei, Samsung, Mediatek, Apple) have to pay Qualcomm licensing fees?
    - noselasd 4y ago
      Absolutely
      - tooltalk 4y ago
        No, that's not how it works. The wireless patent holders collect royalties only at the top of the supply-chain (from oems, not suppliers) to maximize their profit. Mediatek and other competing modem chip makers/supply don't pay, but device-makers like Huawei, Samsung, Apple (ie, Foxconn) do.
    - tooltalk 4y ago
      All 5G devices makers must implement Qualcomm's standard essential patents (aka, SEP). And there are many leading 5G patent holders like Qualcomm, Nokia, Huawei, etc -- they are in turn required to license them a fair, reasonable and non-discrimintory manner (aka, FRAND) to all "willing" licensees. This lawsuit by FTC was largely concocted by Apple's multiyear efforts to pay as little as possible for Qualcomm's wireless invention (royalty) and save their bottomline -- with Apple repeatedly on the losing side not only against Qualcomm, but also every other wireless patent holders like Nokia, Ericsson, etc..
  - tooltalk 4y ago
    The "royalty basis" claim was not the crux of the lawsuit (or the article).
- stevenjgarner 4y ago
  This article definitely does not hit the nail on the head. Patent holders regularly supply patented technology through a patent license agreement. What exactly was discriminatory and not in good faith about the way Qualcomm did it? INHO, a legal ruling this monumental should be way easier to understand for those of us who routinely supply and license proprietary technology. The article does not summarize or explain the actual court's findings: The Court orders the following injunctive relief: (1) Qualcomm must not condition the supply of modem chips on a customer’s patent license status and Qualcomm must negotiate or renegotiate license terms with customers in good faith under conditions free from the threat of lack of access to or discriminatory provision of modem chip supply or associated technical support or access to software. (2) Qualcomm must make exhaustive SEP licenses available to modem-chip suppliers on fair, reasonable, and non-discriminatory (“FRAND”) terms and to submit, as necessary, to arbitral or judicial dispute resolution to determine such terms. (3) Qualcomm may not enter express or de facto exclusive dealing agreements for the supply of modem chips. (4) Qualcomm may not interfere with the ability of any customer to communicate with a government agency about a potential law enforcement or regulatory matter. (5) In order to ensure Qualcomm’s compliance with the above remedies, the Court orders Qualcomm to submit to compliance and monitoring procedures for a period of seven (7) years. Specifically, Qualcomm shall report to the FTC on an annual basis Qualcomm’s compliance with the above remedies ordered by the Court.
bogwog 4y ago
Who could've predicted that patents, legal instruments designed to create monopolies, would be used to create monopolies? EDIT: Apparently, Qualcomm won the appeal[1]. I wonder if the situation is still as bad today as it was when this article came out? https://www.qualcomm.com/content/dam/qcomm-martech/dm-assets/documents/document-21.pdf https://www.qualcomm.com/content/dam/qcomm-martech/dm-assets...
- jjoonathan 4y ago
  Probably the same people who gave the USPTO a profit motive to issue patents, no matter how absurd. (Well, not "profit" in the sense of having shareholders and dividends, but definitely in the sense that its budget comes from fees and it gets more fees if it issues more patents.)
- entropy47 4y ago
  I don't think patents were designed to create monopolies so much as they were created to incentive research. It sucks to go through a lot of expensive R&D that leads to a simple implementation if other people can just copy that and enjoy a huge second mover advantage. Don't get me wrong, the end effect of patents has been nightmarish (I think mainly because the courts are so out of touch with technology). But I don't think the actual intent behind them is necessary evil or anticompetitive.
  - kevin_thibedeau 4y ago
    The incentive is a time limited monopoly.
    - entropy47 4y ago
      I suppose it depends on how you define monopoly. A patent protects a (theoretically, non obvious) solution to a problem that you came up with. Other people can still work on that problem, they just need to come up with their own solutions. You wouldn't say copyright gives an artist a monopoly on any particular type of creativity and - if patents worked properly, which they don't - I like to picture a similar outcome.
bsder 4y ago
As much as I really loathe Qualcomm, they placed an enormous existential bet on QAM and that they could make the linearity requirements work. For a long time, the power amps to make that work had an absolutely abysmal yield and only a single company (Rockwell Defense) could fab them. The company walked a tightrope and could very well have died. This is the kind of tech advancement that absolutely deserves some level of patent protection. The fact that the patent system allows this to be parlayed into a multi-decade shakedown is different from whether Qualcomm should have been granted patents initially.
- sydthrowaway 4y ago
  What's the next future in modulation schemes?
  - femto 4y ago
    Massive MIMO. Arguably a modulation scheme if the array of antennas is treated as a whole.
- xoa 4y ago
  I think the basic problem was in their abuse of the standards process. Having patents on your own inventions for a limited time, for hardware at least [0], has strong arguments. But it doesn't typically exempt one from general antitrust law as far as colluding with others to corner a market. On the other hand, there is an unavoidable natural physical limitation when it comes to the viable electromagnetic spectrum, and huge win/wins all around in everyone being standardized across carriers and devices for how they communicate. The spirit of the SEP process was supposed to be essentially a quid pro quo: everyone can volunteer to join and then have their IP used in a way that would normally be illegal (all players leveraging various government granted or built monopolies to essentially force the entire world to use and pay for certain IP), and thus get a massively larger market for their products, but in exchange have to give up the normal full levels of control a patent would afford by offering RAND terms to all on the value of those specific contributions. It's a bet that more money can be made from a guaranteed smaller cut on billions of devices vs a large cut on ones own vertical stuff (and possibly being frozen out of usage in certain markets entirely). Qualcomm though leveraged that to extract a % of everything else in the device too using this multi-level monopoly. That wasn't OK. If from the very beginning they'd wanted to just demand everyone else not use any of their patents except by specific licensing with them, no inclusion in any standards, that'd be honest enough. Or if they'd gone the other way and full RAND that too. But they wanted to have their cake and eat it and that should have been stomped on by regulators right off frankly. ---- 0: I don't think software patents should exist at all because the core investment of software is more than adequately protected by copyright.
dang 4y ago
Discussed at the time (of the article): How Qualcomm shook down the cell phone industry for almost 20 years - https://news.ycombinator.com/item?id=20055517 https://news.ycombinator.com/item?id=20055517 - May 2019 (300 comments)
josaka 4y ago
This ruling did not survive on appeal: https://scholar.google.com/scholar_case?case=5420885724600138871 https://scholar.google.com/scholar_case?case=542088572460013...
- rektide 4y ago
  Which feels insane. It feels like there's no constraints, no restrictions on what's allowed to keep down competition.
  - lazide 4y ago
    Patents are time limited, then go into the public domain for this reason.
    - hedora 4y ago
      The USPTO makes it easy to re-patent things after expiration.
      - paulryanrogers 4y ago
        Technically doesn't it require some new innovation? And the original patent itself still enters the public domain?
        rektide 4y ago
        A vast part of problem is that the people deciding aren't adequately technical, can't judge the non-obvious clause adequately. Making up some faint new claim, that so happens to largely encompasses the existing claim, feels all too regular. There's just so few people fit to judge, to appropriately decide to award or not award another decade or so of monopoly to a patent.
      - nceqs3 4y ago
        This is categorically false.
thomasjudge 4y ago
What is the point of resubmitting this article now?
- ksec 4y ago
  I dont know, it could be a coincidence. But from a cynical point of view, it is better for Apple to drum up the PR now, and be ready for Apple's modem in 2023 or 2024. Which is their usual PR strategy.
  - deleted 4y ago
    [deleted]
- nuker 4y ago
  I enjoyed reading it, good article.
  - 3836293648 4y ago
    But did you see that they won the appeal?
- usrn 4y ago
paxys 4y ago
When I worked at Qualcomm a while ago the company had two major business lines. One of them was developing and selling a line of mobile chipsets (Snapdragon) to a lot of the major players in the market, for which they employed thousands of top engineers and researchers. The other was licensing their CDMA patents to all of the players in the market, and this org was run entirely by lawyers. The second business made significantly more money than the first.
- ljhsiung 4y ago
  Disclaimer: current employee. Purely personal opinion. I'm curious how long ago this was? I can't find any time period where QTL (the licensing division) made more than QCT (the Snapdragon et. al division). Still, I think your statement's sentiment is the consensus-- that overall, Qualcomm is/has been the "Oracle of hardware" that milks the licensing cow. Let's look at Q2 '22, Q2 '19, Q2 '16, Q2 '13. I choose 3-year gaps for no particular reason, simply how I personally view company timelines and how long it might take to "steer a ship", e.g. if the CEO wants to change its public perception, it might take a few years. I also choose Q2 simply because Q2 was the most recent quarter. Relatively arbitrary, but still sensible data points when talking about Qualcomm's recent history. Noteworthy also, is that Q2 '22 is about the 1 year anniversary of when the new CEO was instantiated. ($mil) | - QCT - | - QTL -- | QTL % of tot rev -------------------------------------------- Q2 '13 | $3,916 | $2,057 | 33.6% -------------------------------------------- Q2 '16 | $3,337 | $2,135 | 38.5% -------------------------------------------- Q2 '19 | $3,722 | $1,122 | 22.9% -------------------------------------------- Q2 '22 | $9,548 | $1,580 | 16.5% Licensing revenue has actually been flat or on the decline recently. Even in business outlooks, Qualcomm usually directly says "our goal is to maintain QTL" while heavily expanding on QCT, somewhat implying an attempt to cast off this "ran by lawyers" reputation. Time will tell, I suppose. [1] https://d1io3yog0oux5.cloudfront.net/_ef937ef9314613934ed1233f1498098e/qualcomm/db/773/6117/file/Q2_13_ER_Final.pdf https://d1io3yog0oux5.cloudfront.net/_ef937ef9314613934ed123... [2] https://d1io3yog0oux5.cloudfront.net/_ef937ef9314613934ed1233f1498098e/qualcomm/db/773/6130/file/FY_2016_2nd_Quarter_Earnings_Release.pdf https://d1io3yog0oux5.cloudfront.net/_ef937ef9314613934ed123... [3] https://d1io3yog0oux5.cloudfront.net/_ef937ef9314613934ed1233f1498098e/qualcomm/db/773/6142/file/FY+2019+2nd+Quarter+Earnings+Release.pdf https://d1io3yog0oux5.cloudfront.net/_ef937ef9314613934ed123... [4] https://d1io3yog0oux5.cloudfront.net/_ef937ef9314613934ed1233f1498098e/qualcomm/db/773/7114/file/FY+2022+2nd+Quarter+Earnings+Release.pdf https://d1io3yog0oux5.cloudfront.net/_ef937ef9314613934ed123...
gsich 4y ago
Qualcomm sucks hard. Binary blobs, no mainline drivers for some modems, Shitty NDAs. No documentation.
olliej 4y ago
I still don't understand how these various standardisation bodies, with there FRAND "requirements", don't have mandatory terms that basically say "any attempt to require non-FRAND terms for any IP shall result in all relevant IP from that company being relicensed as free for the relevant standards". Toss in wording for mandatory bundling nonsense, etc. It seems like the lack of penalties for abusing IP you agreed to provide on FRAND terms means that there is no penalties for this kind of behavior - worst case scenario you get pushed back to what you had originally agreed to anyway. Making it so being caught violating your agreement meant that you permanently lose all your future IP revenue as well seems like the only thing that would ever cause any change in behaviour.
- jillesvangurp 4y ago
  That's because these standardization bodies are run by the same companies benefiting from them and are incentivized to serve their owners and not the public domain. The goal of these standards is not to be open and free but to allow for multiple proprietary but compatible implementations to exist. For better or for worse, mobile phones need to be able to talk to each other via standardized infrastructure and you need to agree some technical specifications for that. That's the need these standardization bodies serve. Making it easy for others to enter the market is not a goal and actually explicitly not a goal. Implementing these specifications requires access to patents from the main specification authors. This ensures these make a nice profit and ensures companies are willing, and even eager, to commit their IP to being part of a standard. It's the key way for them to monetize their R&D.
benatkin 4y ago
I currently have a phone with an EXYNOS processor. It's a Samsung Galaxy A52 5G. Oddly the S22 in UK has a different processor from the S22 in the US. https://www.tomsguide.com/features/samsung-galaxy-s22-plus-benchmarks-snapdragon-8-gen-1-vs-exynos-2200-results https://www.tomsguide.com/features/samsung-galaxy-s22-plus-b... It's good to see competition. Apple may not be as anticompetitive as Qualcomm with hardware patents, but their rule to not allow alternative browser tech on iOS seems pretty bad to me.
- lagadu 4y ago
  The article isn't clear about it but Qualcomm's monopoly isn't in the SoC business but rather in the modem business (which is integrated into SoCs usually). This is where all the CDMA talk comes from: I believe they were the only large scale maker of CDMA modems, which also explains why there's no Exynos chips in CDMA markets. This is why Apple bought Intel's modem division a couple years ago: they're actively trying to move away from their Qualcomm dependency[0]. [0] https://www.macworld.com/article/554612/iphone-custom-5g-modem-2023.html https://www.macworld.com/article/554612/iphone-custom-5g-mod...
mrtweetyhack 4y ago
usrn 4y ago
nceqs3 4y ago
This case was obliterated on appeal. The Judge's opinion was the laughing stock of the SEP industry for a while. Qualcomm did nothing wrong and this was all part of Apple's massive campaign against Qualcomm to force a positive settlement for themselves.
- nuker 4y ago
  > Qualcomm did nothing wrong … Is this a joke? Have you read the article?
  - usr1106 4y ago
    Some judge in later instance decided that Qualcomm did nothing wrong. In my opinion Qualcomm is at the top of evil corporations. As the original ruling said.
usr1106 4y ago
I am not a radio engineer but I understood CDMA wasn't even a very good technology. American CDMA was not competitve with internationally used GSM (well, no competition existed those days so America kept using it.) 3G (WCDMA) was not a great standard. Very energy-inefficient. Operators are happy to shut it down. In 4G it's no longer used. What about 5G? So Qualcomm being the Microsoft of radios? Dominating the world with 2nd class technology and first class shady business practices?
- vlovich123 4y ago
  Qualcomm has the GSM standard covered with patents as well. That’s ignoring that CDMA underpins 3G GSM and LTE. So really CDMA got absorbed into the GSM standards and became more of a branding thing as far as I understand it.
- mdasen 4y ago
  > American CDMA was not competitve with internationally used GSM (well, no competition existed those days so America kept using it.) That's a curious statement. In the US, CDMA (IS-95), TDMA (IS-54/136), and GSM all competed. It was in Europe that there was no competition. WCDMA wasn't a great standard. WCDMA basically came from the GSM camp as a competitor to Qualcomm's CDMA2000/1xRTT/1xEV-DO. Qualcomm's CDMA had more capacity than TDMA and GSM, soft handoffs, and importantly in America the phones would also support AMPS (analog) networks that provided rural coverage while networks were being upgraded (and the 35km coverage limit of GSM may have been impactful in flat, rural areas of the US - it's easy to underestimate how much of the US is rural). Qualcomm's user-equipment was also better and it's still king today. Qualcomm also often provided a more pragmatic option for carriers. Upgrading a network with 1xEV-DO meant carving out 2.5MHz. Upgrading a network with GSM's 3G standard (WCDMA) meant carving out 10MHz. If you're a carrier that's facing capacity issues and only has 30-40MHz, that means carving out a huge chunk of space to upgrade. You need to start getting new handsets into people's hands fast. Worse, while being able to carry voice and data over the same system is great in theory, it meant that as carriers were upgrading their networks over 5 years, your new 3G phone might be placing a call via a tower that's farther away than a GSM tower or you might be stuck on a marginal 1900MHz 3G connection while an 850MHz GSM connection would be stronger. Qualcomm's data-only approach meant that customers still had the same, reliable voice connection they always loved. Upgrading from GSM to WCDMA meant getting a phone that would be connecting to an under-construction "beta" network that often didn't have the coverage of the older GSM network - but your phone would hold onto a really marginal WCDMA signal and you'd get a bad experience. For a carrier like AT&T to launch low-band WCDMA meant carving out nearly half of its low-band spectrum for WCDMA - and in a suburban/rural country like the US where 1900MHz coverage was pretty sparse at the time, that meant reducing capacity a lot or waiting until most people had WCDMA phones. Verizon, on the other hand, could simply 1xRTT (slower data) areas if they launched 1xEV-DO at 1900MHz while still offering the same solid voice service - or they could carve out 10% of their low-band spectrum for data. Both of those offer a way better path forward for both the carrier and the users. LTE and 5G NR have moved to OFDMA, but CDMA was better than the TDMA/GSM (and iDEN) networks that were the other choices in many respects. It was more efficient, but I'd say a big part of it was that Qualcomm just nailed the implementation. WCDMA was just ill-fated, but given that so many countries were going to adopt WCDMA regardless, it didn't really matter. It was the successor to GSM and so most of the world would end up using it. Release 99 with its 384kbps data rate felt a bit like a joke compared to 1xEV-DO's 2.45Mbps (while having smaller channel sizes). I wouldn't say that CDMA wasn't a good technology. It was a better technology than GSM or TDMA. It was more efficient and Qualcomm's CDMA provided a superior experience. WCDMA was a bit garbage at first. HSDPA improved downloads and HSUPA later improved uploads and HSPA+ further improved things and did show that wider channels had some good offerings - but it was a really rough transition. Plus, it was just really inconsistent and usually had higher pings than EV-DO (even if it'd perform better on a speed test). While AT&T and T-Mobile rolled out HSPA+, Verizon rolled out LTE and once again they'd have the benefit of the rock-solid CDMA voice network they'd been building for so long and a far better data option (while AT&T had upgraded from TDMA to GSM and GSM alongside WCDMA and now would need LTE as well). That's not to say GSM/WCDMA didn't have some advantages. Handsets were cheaper and you weren't beholden to Qualcomm so much. The 5MHz channels would have a bit more longevity, but arguably if Verizon hadn't chosen LTE Qualcomm would have continued evolving their proprietary standard more (and in hindsight I think anyone would say that WCDMA should have supported smaller channel sizes to accommodate an easier launch). The allegations in the trial were often related to Qualcomm's practice of using patent royalties to bolster its chips division whose sales would then bolster its ability to build-up it's patent portfolio whose royalties then boosted its chips division... Qualcomm wasn't dominating the world with 2nd class technology. They were using their first-class technology to keep reinforcing their dominant position. If you're European and your experience with "CDMA" is "WCDMA", I can see how you might think poorly of it. If you're an American, you could see Qualcomm's CDMA being so much better than GSM and WCDMA. I think it's also likely that a good bit of LTE's success has come because of Qualcomm's work on it. Qualcomm definitely wasn't pushing second-rate stuff. The GSM camp pushed a half-baked WCDMA that used some of Qualcomm's technology, but that Qualcomm wasn't really backing (hoping that people would choose their proprietary CDMA 1xEV-DO system instead). With 3G technologies, everyone adopted CDMA-style systems (whether Qualcomm's or the GSM camp's). With 4G technologies, everyone went with OFDMA. However, implementation matters and along with allegedly anti-competitive business practices, Qualcomm is also pretty great at creating top-tier wireless stuff. They threw their weight behind LTE and have continued to create the best LTE chipsets out there.
april_22 4y ago
Could anyone give a quick summarization of those 233 pages?
say_it_as_it_is 4y ago
I don't consider this a shakedown but rather business savvy of book-worthy attention.
shop2shop 4y ago
xtajv 4y ago
I remember the ol' "LTE is short for Long Term Employment" joke. It took me several months of strictly non-4G-related work to recognize vanity license plates again.

253 points by ddtaylor 4y ago

Anybody want to summarize the "scathing 233-page opinion" how Qualcomm's patent licensing "violated American antitrust law". This article basically explains how Qualcomm was intelligent about protecting their proprietary position. It does not seem to explain how that protection was illegal.

yonran 4y ago
I think the crux of the article is this: they used the protected monopoly on one market (e.g. CDMA modems) to gain an unfair advantage in the other markets (all the other chips in a cell phone). > Qualcomm's patent licensing fees were calculated based on the value of the entire phone, not just the value of chips that embodied Qualcomm's patented technology. This effectively meant that Qualcomm got a cut of every component of a smartphone—most of which had nothing to do with Qualcomm's cellular patents.
- radicaldreamer 4y ago
  Do competitors or manufacturers using other vendors (Huawei, Samsung, Mediatek, Apple) have to pay Qualcomm licensing fees?
  - noselasd 4y ago
    Absolutely
    - tooltalk 4y ago
      No, that's not how it works. The wireless patent holders collect royalties only at the top of the supply-chain (from oems, not suppliers) to maximize their profit. Mediatek and other competing modem chip makers/supply don't pay, but device-makers like Huawei, Samsung, Apple (ie, Foxconn) do.
  - tooltalk 4y ago
    All 5G devices makers must implement Qualcomm's standard essential patents (aka, SEP). And there are many leading 5G patent holders like Qualcomm, Nokia, Huawei, etc -- they are in turn required to license them a fair, reasonable and non-discrimintory manner (aka, FRAND) to all "willing" licensees. This lawsuit by FTC was largely concocted by Apple's multiyear efforts to pay as little as possible for Qualcomm's wireless invention (royalty) and save their bottomline -- with Apple repeatedly on the losing side not only against Qualcomm, but also every other wireless patent holders like Nokia, Ericsson, etc..
- tooltalk 4y ago
  The "royalty basis" claim was not the crux of the lawsuit (or the article).
stevenjgarner 4y ago
This article definitely does not hit the nail on the head. Patent holders regularly supply patented technology through a patent license agreement. What exactly was discriminatory and not in good faith about the way Qualcomm did it? INHO, a legal ruling this monumental should be way easier to understand for those of us who routinely supply and license proprietary technology. The article does not summarize or explain the actual court's findings: The Court orders the following injunctive relief: (1) Qualcomm must not condition the supply of modem chips on a customer’s patent license status and Qualcomm must negotiate or renegotiate license terms with customers in good faith under conditions free from the threat of lack of access to or discriminatory provision of modem chip supply or associated technical support or access to software. (2) Qualcomm must make exhaustive SEP licenses available to modem-chip suppliers on fair, reasonable, and non-discriminatory (“FRAND”) terms and to submit, as necessary, to arbitral or judicial dispute resolution to determine such terms. (3) Qualcomm may not enter express or de facto exclusive dealing agreements for the supply of modem chips. (4) Qualcomm may not interfere with the ability of any customer to communicate with a government agency about a potential law enforcement or regulatory matter. (5) In order to ensure Qualcomm’s compliance with the above remedies, the Court orders Qualcomm to submit to compliance and monitoring procedures for a period of seven (7) years. Specifically, Qualcomm shall report to the FTC on an annual basis Qualcomm’s compliance with the above remedies ordered by the Court.

bogwog 4y ago

Who could've predicted that patents, legal instruments designed to create monopolies, would be used to create monopolies? EDIT: Apparently, Qualcomm won the appeal[1]. I wonder if the situation is still as bad today as it was when this article came out? https://www.qualcomm.com/content/dam/qcomm-martech/dm-assets/documents/document-21.pdf https://www.qualcomm.com/content/dam/qcomm-martech/dm-assets...

jjoonathan 4y ago
Probably the same people who gave the USPTO a profit motive to issue patents, no matter how absurd. (Well, not "profit" in the sense of having shareholders and dividends, but definitely in the sense that its budget comes from fees and it gets more fees if it issues more patents.)
entropy47 4y ago
I don't think patents were designed to create monopolies so much as they were created to incentive research. It sucks to go through a lot of expensive R&D that leads to a simple implementation if other people can just copy that and enjoy a huge second mover advantage. Don't get me wrong, the end effect of patents has been nightmarish (I think mainly because the courts are so out of touch with technology). But I don't think the actual intent behind them is necessary evil or anticompetitive.
- kevin_thibedeau 4y ago
  The incentive is a time limited monopoly.
  - entropy47 4y ago
    I suppose it depends on how you define monopoly. A patent protects a (theoretically, non obvious) solution to a problem that you came up with. Other people can still work on that problem, they just need to come up with their own solutions. You wouldn't say copyright gives an artist a monopoly on any particular type of creativity and - if patents worked properly, which they don't - I like to picture a similar outcome.

bsder 4y ago

As much as I really loathe Qualcomm, they placed an enormous existential bet on QAM and that they could make the linearity requirements work. For a long time, the power amps to make that work had an absolutely abysmal yield and only a single company (Rockwell Defense) could fab them. The company walked a tightrope and could very well have died. This is the kind of tech advancement that absolutely deserves some level of patent protection. The fact that the patent system allows this to be parlayed into a multi-decade shakedown is different from whether Qualcomm should have been granted patents initially.

sydthrowaway 4y ago
What's the next future in modulation schemes?
- femto 4y ago
  Massive MIMO. Arguably a modulation scheme if the array of antennas is treated as a whole.
xoa 4y ago
I think the basic problem was in their abuse of the standards process. Having patents on your own inventions for a limited time, for hardware at least [0], has strong arguments. But it doesn't typically exempt one from general antitrust law as far as colluding with others to corner a market. On the other hand, there is an unavoidable natural physical limitation when it comes to the viable electromagnetic spectrum, and huge win/wins all around in everyone being standardized across carriers and devices for how they communicate. The spirit of the SEP process was supposed to be essentially a quid pro quo: everyone can volunteer to join and then have their IP used in a way that would normally be illegal (all players leveraging various government granted or built monopolies to essentially force the entire world to use and pay for certain IP), and thus get a massively larger market for their products, but in exchange have to give up the normal full levels of control a patent would afford by offering RAND terms to all on the value of those specific contributions. It's a bet that more money can be made from a guaranteed smaller cut on billions of devices vs a large cut on ones own vertical stuff (and possibly being frozen out of usage in certain markets entirely). Qualcomm though leveraged that to extract a % of everything else in the device too using this multi-level monopoly. That wasn't OK. If from the very beginning they'd wanted to just demand everyone else not use any of their patents except by specific licensing with them, no inclusion in any standards, that'd be honest enough. Or if they'd gone the other way and full RAND that too. But they wanted to have their cake and eat it and that should have been stomped on by regulators right off frankly. ---- 0: I don't think software patents should exist at all because the core investment of software is more than adequately protected by copyright.

dang 4y ago

Discussed at the time (of the article): How Qualcomm shook down the cell phone industry for almost 20 years - https://news.ycombinator.com/item?id=20055517 https://news.ycombinator.com/item?id=20055517 - May 2019 (300 comments)

josaka 4y ago

This ruling did not survive on appeal: https://scholar.google.com/scholar_case?case=5420885724600138871 https://scholar.google.com/scholar_case?case=542088572460013...

rektide 4y ago
Which feels insane. It feels like there's no constraints, no restrictions on what's allowed to keep down competition.
- lazide 4y ago
  Patents are time limited, then go into the public domain for this reason.
  - hedora 4y ago
    The USPTO makes it easy to re-patent things after expiration.
    - paulryanrogers 4y ago
      Technically doesn't it require some new innovation? And the original patent itself still enters the public domain?
      - rektide 4y ago
        A vast part of problem is that the people deciding aren't adequately technical, can't judge the non-obvious clause adequately. Making up some faint new claim, that so happens to largely encompasses the existing claim, feels all too regular. There's just so few people fit to judge, to appropriately decide to award or not award another decade or so of monopoly to a patent.
    - nceqs3 4y ago
      This is categorically false.

thomasjudge 4y ago

What is the point of resubmitting this article now?

ksec 4y ago
I dont know, it could be a coincidence. But from a cynical point of view, it is better for Apple to drum up the PR now, and be ready for Apple's modem in 2023 or 2024. Which is their usual PR strategy.
- deleted 4y ago
  [deleted]
nuker 4y ago
I enjoyed reading it, good article.
- 3836293648 4y ago
  But did you see that they won the appeal?
usrn 4y ago

paxys 4y ago

When I worked at Qualcomm a while ago the company had two major business lines. One of them was developing and selling a line of mobile chipsets (Snapdragon) to a lot of the major players in the market, for which they employed thousands of top engineers and researchers. The other was licensing their CDMA patents to all of the players in the market, and this org was run entirely by lawyers. The second business made significantly more money than the first.

ljhsiung 4y ago
Disclaimer: current employee. Purely personal opinion. I'm curious how long ago this was? I can't find any time period where QTL (the licensing division) made more than QCT (the Snapdragon et. al division). Still, I think your statement's sentiment is the consensus-- that overall, Qualcomm is/has been the "Oracle of hardware" that milks the licensing cow. Let's look at Q2 '22, Q2 '19, Q2 '16, Q2 '13. I choose 3-year gaps for no particular reason, simply how I personally view company timelines and how long it might take to "steer a ship", e.g. if the CEO wants to change its public perception, it might take a few years. I also choose Q2 simply because Q2 was the most recent quarter. Relatively arbitrary, but still sensible data points when talking about Qualcomm's recent history. Noteworthy also, is that Q2 '22 is about the 1 year anniversary of when the new CEO was instantiated. ($mil) | - QCT - | - QTL -- | QTL % of tot rev -------------------------------------------- Q2 '13 | $3,916 | $2,057 | 33.6% -------------------------------------------- Q2 '16 | $3,337 | $2,135 | 38.5% -------------------------------------------- Q2 '19 | $3,722 | $1,122 | 22.9% -------------------------------------------- Q2 '22 | $9,548 | $1,580 | 16.5% Licensing revenue has actually been flat or on the decline recently. Even in business outlooks, Qualcomm usually directly says "our goal is to maintain QTL" while heavily expanding on QCT, somewhat implying an attempt to cast off this "ran by lawyers" reputation. Time will tell, I suppose. [1] https://d1io3yog0oux5.cloudfront.net/_ef937ef9314613934ed1233f1498098e/qualcomm/db/773/6117/file/Q2_13_ER_Final.pdf https://d1io3yog0oux5.cloudfront.net/_ef937ef9314613934ed123... [2] https://d1io3yog0oux5.cloudfront.net/_ef937ef9314613934ed1233f1498098e/qualcomm/db/773/6130/file/FY_2016_2nd_Quarter_Earnings_Release.pdf https://d1io3yog0oux5.cloudfront.net/_ef937ef9314613934ed123... [3] https://d1io3yog0oux5.cloudfront.net/_ef937ef9314613934ed1233f1498098e/qualcomm/db/773/6142/file/FY+2019+2nd+Quarter+Earnings+Release.pdf https://d1io3yog0oux5.cloudfront.net/_ef937ef9314613934ed123... [4] https://d1io3yog0oux5.cloudfront.net/_ef937ef9314613934ed1233f1498098e/qualcomm/db/773/7114/file/FY+2022+2nd+Quarter+Earnings+Release.pdf https://d1io3yog0oux5.cloudfront.net/_ef937ef9314613934ed123...

gsich 4y ago

Qualcomm sucks hard. Binary blobs, no mainline drivers for some modems, Shitty NDAs. No documentation.

olliej 4y ago

I still don't understand how these various standardisation bodies, with there FRAND "requirements", don't have mandatory terms that basically say "any attempt to require non-FRAND terms for any IP shall result in all relevant IP from that company being relicensed as free for the relevant standards". Toss in wording for mandatory bundling nonsense, etc. It seems like the lack of penalties for abusing IP you agreed to provide on FRAND terms means that there is no penalties for this kind of behavior - worst case scenario you get pushed back to what you had originally agreed to anyway. Making it so being caught violating your agreement meant that you permanently lose all your future IP revenue as well seems like the only thing that would ever cause any change in behaviour.

jillesvangurp 4y ago
That's because these standardization bodies are run by the same companies benefiting from them and are incentivized to serve their owners and not the public domain. The goal of these standards is not to be open and free but to allow for multiple proprietary but compatible implementations to exist. For better or for worse, mobile phones need to be able to talk to each other via standardized infrastructure and you need to agree some technical specifications for that. That's the need these standardization bodies serve. Making it easy for others to enter the market is not a goal and actually explicitly not a goal. Implementing these specifications requires access to patents from the main specification authors. This ensures these make a nice profit and ensures companies are willing, and even eager, to commit their IP to being part of a standard. It's the key way for them to monetize their R&D.

benatkin 4y ago

I currently have a phone with an EXYNOS processor. It's a Samsung Galaxy A52 5G. Oddly the S22 in UK has a different processor from the S22 in the US. https://www.tomsguide.com/features/samsung-galaxy-s22-plus-benchmarks-snapdragon-8-gen-1-vs-exynos-2200-results https://www.tomsguide.com/features/samsung-galaxy-s22-plus-b... It's good to see competition. Apple may not be as anticompetitive as Qualcomm with hardware patents, but their rule to not allow alternative browser tech on iOS seems pretty bad to me.

lagadu 4y ago
The article isn't clear about it but Qualcomm's monopoly isn't in the SoC business but rather in the modem business (which is integrated into SoCs usually). This is where all the CDMA talk comes from: I believe they were the only large scale maker of CDMA modems, which also explains why there's no Exynos chips in CDMA markets. This is why Apple bought Intel's modem division a couple years ago: they're actively trying to move away from their Qualcomm dependency[0]. [0] https://www.macworld.com/article/554612/iphone-custom-5g-modem-2023.html https://www.macworld.com/article/554612/iphone-custom-5g-mod...

mrtweetyhack 4y ago

usrn 4y ago

nceqs3 4y ago

This case was obliterated on appeal. The Judge's opinion was the laughing stock of the SEP industry for a while. Qualcomm did nothing wrong and this was all part of Apple's massive campaign against Qualcomm to force a positive settlement for themselves.

nuker 4y ago
> Qualcomm did nothing wrong … Is this a joke? Have you read the article?
- usr1106 4y ago
  Some judge in later instance decided that Qualcomm did nothing wrong. In my opinion Qualcomm is at the top of evil corporations. As the original ruling said.

usr1106 4y ago

I am not a radio engineer but I understood CDMA wasn't even a very good technology. American CDMA was not competitve with internationally used GSM (well, no competition existed those days so America kept using it.) 3G (WCDMA) was not a great standard. Very energy-inefficient. Operators are happy to shut it down. In 4G it's no longer used. What about 5G? So Qualcomm being the Microsoft of radios? Dominating the world with 2nd class technology and first class shady business practices?

vlovich123 4y ago
Qualcomm has the GSM standard covered with patents as well. That’s ignoring that CDMA underpins 3G GSM and LTE. So really CDMA got absorbed into the GSM standards and became more of a branding thing as far as I understand it.
mdasen 4y ago
> American CDMA was not competitve with internationally used GSM (well, no competition existed those days so America kept using it.) That's a curious statement. In the US, CDMA (IS-95), TDMA (IS-54/136), and GSM all competed. It was in Europe that there was no competition. WCDMA wasn't a great standard. WCDMA basically came from the GSM camp as a competitor to Qualcomm's CDMA2000/1xRTT/1xEV-DO. Qualcomm's CDMA had more capacity than TDMA and GSM, soft handoffs, and importantly in America the phones would also support AMPS (analog) networks that provided rural coverage while networks were being upgraded (and the 35km coverage limit of GSM may have been impactful in flat, rural areas of the US - it's easy to underestimate how much of the US is rural). Qualcomm's user-equipment was also better and it's still king today. Qualcomm also often provided a more pragmatic option for carriers. Upgrading a network with 1xEV-DO meant carving out 2.5MHz. Upgrading a network with GSM's 3G standard (WCDMA) meant carving out 10MHz. If you're a carrier that's facing capacity issues and only has 30-40MHz, that means carving out a huge chunk of space to upgrade. You need to start getting new handsets into people's hands fast. Worse, while being able to carry voice and data over the same system is great in theory, it meant that as carriers were upgrading their networks over 5 years, your new 3G phone might be placing a call via a tower that's farther away than a GSM tower or you might be stuck on a marginal 1900MHz 3G connection while an 850MHz GSM connection would be stronger. Qualcomm's data-only approach meant that customers still had the same, reliable voice connection they always loved. Upgrading from GSM to WCDMA meant getting a phone that would be connecting to an under-construction "beta" network that often didn't have the coverage of the older GSM network - but your phone would hold onto a really marginal WCDMA signal and you'd get a bad experience. For a carrier like AT&T to launch low-band WCDMA meant carving out nearly half of its low-band spectrum for WCDMA - and in a suburban/rural country like the US where 1900MHz coverage was pretty sparse at the time, that meant reducing capacity a lot or waiting until most people had WCDMA phones. Verizon, on the other hand, could simply 1xRTT (slower data) areas if they launched 1xEV-DO at 1900MHz while still offering the same solid voice service - or they could carve out 10% of their low-band spectrum for data. Both of those offer a way better path forward for both the carrier and the users. LTE and 5G NR have moved to OFDMA, but CDMA was better than the TDMA/GSM (and iDEN) networks that were the other choices in many respects. It was more efficient, but I'd say a big part of it was that Qualcomm just nailed the implementation. WCDMA was just ill-fated, but given that so many countries were going to adopt WCDMA regardless, it didn't really matter. It was the successor to GSM and so most of the world would end up using it. Release 99 with its 384kbps data rate felt a bit like a joke compared to 1xEV-DO's 2.45Mbps (while having smaller channel sizes). I wouldn't say that CDMA wasn't a good technology. It was a better technology than GSM or TDMA. It was more efficient and Qualcomm's CDMA provided a superior experience. WCDMA was a bit garbage at first. HSDPA improved downloads and HSUPA later improved uploads and HSPA+ further improved things and did show that wider channels had some good offerings - but it was a really rough transition. Plus, it was just really inconsistent and usually had higher pings than EV-DO (even if it'd perform better on a speed test). While AT&T and T-Mobile rolled out HSPA+, Verizon rolled out LTE and once again they'd have the benefit of the rock-solid CDMA voice network they'd been building for so long and a far better data option (while AT&T had upgraded from TDMA to GSM and GSM alongside WCDMA and now would need LTE as well). That's not to say GSM/WCDMA didn't have some advantages. Handsets were cheaper and you weren't beholden to Qualcomm so much. The 5MHz channels would have a bit more longevity, but arguably if Verizon hadn't chosen LTE Qualcomm would have continued evolving their proprietary standard more (and in hindsight I think anyone would say that WCDMA should have supported smaller channel sizes to accommodate an easier launch). The allegations in the trial were often related to Qualcomm's practice of using patent royalties to bolster its chips division whose sales would then bolster its ability to build-up it's patent portfolio whose royalties then boosted its chips division... Qualcomm wasn't dominating the world with 2nd class technology. They were using their first-class technology to keep reinforcing their dominant position. If you're European and your experience with "CDMA" is "WCDMA", I can see how you might think poorly of it. If you're an American, you could see Qualcomm's CDMA being so much better than GSM and WCDMA. I think it's also likely that a good bit of LTE's success has come because of Qualcomm's work on it. Qualcomm definitely wasn't pushing second-rate stuff. The GSM camp pushed a half-baked WCDMA that used some of Qualcomm's technology, but that Qualcomm wasn't really backing (hoping that people would choose their proprietary CDMA 1xEV-DO system instead). With 3G technologies, everyone adopted CDMA-style systems (whether Qualcomm's or the GSM camp's). With 4G technologies, everyone went with OFDMA. However, implementation matters and along with allegedly anti-competitive business practices, Qualcomm is also pretty great at creating top-tier wireless stuff. They threw their weight behind LTE and have continued to create the best LTE chipsets out there.

april_22 4y ago

Could anyone give a quick summarization of those 233 pages?

say_it_as_it_is 4y ago

I don't consider this a shakedown but rather business savvy of book-worthy attention.

shop2shop 4y ago

xtajv 4y ago

I remember the ol' "LTE is short for Long Term Employment" joke. It took me several months of strictly non-4G-related work to recognize vanity license plates again.