Could someone who is knowledgeable about the disagreement provide some clarification?
A chip and a license are two different things. Doesn't Qualcomm get to charge for both?
A manufacturer would like a chip without a license? Okay. Qualcomm could reasonable do this.
You want a license but no chip? Maybe. This could be more difficult. How does Qualcomm give away their tech and allow the manufacturer to install it onto a their chip AND honestly tell you how many times it was installed so that Qualcomm can be paid correctly? Remember how many time someone could copy a Microsoft Windows or Office CD. Infinite.
You want a chip with some licenses but not others? Seems reasonable.
Is there the possibility of manufactures wanting Qualcomm's chips so that they can install (possibly illegally) portions of Qualcomm's license onto it? And then they won't pay for it? Or something?
Thanks. Jason.
Under U.S. law, if you sell an item which substantially embodies a patent which you own, then your patent rights with regard to that item are exhausted. That means you have no more legal right to demand license fees for the patent which is incorporated in the item. The person who bought the item can use it, or resale it, and they aren’t infringing on your patent. You chose to sell them something which used the patent. If you’re interested further in this concept, I can give you some cites to court cases.
If person A sells an item which incorporates a patent owned by person B, without getting a license to do so, then person B’s patent rights are not exhausted. Both person A and person C who bought the item can be infringers. But if person B sold the item, then no one further down the chain is infringing by using or resaling the item.
So if Qualcomm sells Foxconn a modem, then Qualcomm’s patent rights for all of the standard essential patents which are incorporated in that modem are exhausted. It isn’t entitled to collect license fees for those patents, either from Foxconn or, e.g., Apple if the modem is incorporated in an iPhone which is sold to Apple.
As for other chip makers wanting to license necessary patents from Qualcomm, Qualcomm is required to grant them licenses on FRAND terms. At that point, Qualcomm’s patent rights are exhausted and it isn’t entitled to collect license fees (for the patents in question) from, e.g., smartphone makers who buy chips from those other chip makers. As for how to account for how many licensed chips are made, that’s something the parties need to agree on or have a court sort out.
[doublepost=1546647865][/doublepost]
...
Appreciate the thoughtful info and your polite delivery!
You're welcome.