Mobile phone firms agree on W-CDMA royalties

Mobile phone manufacturers NTT DoCoMo, Ericsson, Nokia and Siemens have come to an agreement regarding intellectual property...

Mobile phone manufacturers NTT DoCoMo, Ericsson, Nokia and Siemens have come to an agreement regarding intellectual property rights (IPR) and the assessment of royalty rates on the use of Wideband Code Division Multiple Access (W-CDMA) technology.

The companies seek to keep royalty rates at around 5%. Some 110 operators worldwide have already committed themselves to the W-CDMA standard.

W-CDMA is seen as the version of CDMA that will prove to be the first step for allowing third-generation technology to rival mobile system Global System for Mobile Communications technology.

NTT DoCoMo, Ericsson, Nokia and Siemens - who see themselves as "the major IPR holders" of W-CDMA - said it is essential that the W-CDMA standard stays "an open and globally acceptable technology" with the cumulative royalty cost of W-CDMA being kept at a rate low enough to encourage greater growth and innovation.

Other essential patent holders - Fujitsu, Matsushita (best known for its Panasonic brand), Mitsubishi, NEC and Sony - have also expressed their willingness to co-operate with the arrangements for W-CDMA royalty rates.

NTT DoCoMo, Ericsson, Nokia and Siemens have also discussed the proposals with the Third Generation Partnership Project (3GPP), which developed the W-CDMA technology, and co-ordinates royalties for the technology. French-based 3GPP was established by the mobile phone industry to provide an evaluation service for W-CDMA patents.

In September, 3G Patent Platform Partnership (3G3P) director general Brian Kearsey expressed concern that too many companies claimed to own too many patents essential to building next-generation W-CDMA handsets, base stations and radio network controllers in the hopes of generating large future profits.

The 3G3P called for a royalty cap at 5% of the sales value of a product, a stance that NTT DoCoMo, Ericsson, Nokia and Siemens now appear to support.

The group believes the cumulative royalties would be even lower for W-CDMA than GSM, citing "recent developments in China" that indicate the cumulative royalty rate remains "even under our earlier targeted cumulative 5% level".

Whereas W-CDMA is being adopted as the standard in Europe and large parts of Asia, another standard, CDMA operators in the US and parts of Asia are plumping for CDMA2000.

Most of the essential patents to CDMA2000 are owned by Qualcomm, which is said to be keeping royalties at about 5%to 6%.

NTT DoCoMo, Ericsson, Nokia and Siemens asserted that they too "own a significant number of the essential patents applicable to the CDMA2000 standard" and vowed "these patents will be licensed at fair and reasonable terms".

While W-CDMA royalties rates are co-ordinated by the 3GPP, CDMA2000 goes through a separate body, the 3GPP2 (Third Generation Partnership Project 2), whose members include NEC, Sony, Qualcomm and Motorola.

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