Battle of the Patents

By SemiWiki

September 28, 2011

What’s going on in all these wireless patent battles? And why?

The first thing to understand is that implementing most (all?) wireless standards involves infringing on certain “essential patents.” The word “essential” means that if you meet the standard, you infringe the patent, there is no way around it. You can’t build a CDMA phone without infringing patents from Qualcomm; you can’t build a GSM phone without infringing patents from Motorola, Philips and others.

The second thing to understand is that typically, if you are a patent holder, you want to license the last person in the chain. There are two reasons for this. Firstly, the further down the value chain, the higher the price, and so the easier to extract any given level of license fee. It is easier to get a phone manufacturer to pay you a dollar than a chip manufacturer, for example. The second reason is that often the patent is only infringed in the final stage of the product chain. Any patent that claims to cover phones that do something special is not infringed by chips, software or IP that might go into the phone to make that something special happen. Plus you can’t really embargo anything other than the final product if it is all assembled offshore.

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