Oct 28, 2005 (12:10 PM EDT)
Qualcomm Response: Claims Made To EC Meritless

Read the Original Article at InformationWeek

MANHASSET, N.Y. — CDMA technology supplier Qualcomm Inc. said the allegations of withholding intellectual property made to the European Commission by six rivals are factually inaccurate and legally meritless.

Earlier Friday (Oct. 28), Broadcom Corp. Ericsson, NEC, Nokia, Panasonic Mobile Communications and Texas Instruments Inc. each asked the EC to investigate and stop alleged anticompetitive conduct by San Diego-based Qualcomm in the licensing of essential patents for 3G mobile technology.

In a released statement, Qualcomm said the accusation the company has failed to honor commitments to license its essential patents on fair and reasonable terms is belied by the more than 130 licenses the company has granted to a broad range of companies. Qualcomm said its patent portfolio is the most extensively licensed portfolio in the cellular industry, backing the company’s claim its licensing practices are fair, reasonable and pro-competitive.

Qualcomm added that five of six reported claimants are among the licensees. The company said the action was a ploy by licensees to renegotiate their license agreements through governmental intervention.

The company also denied allegations the company’s licensing practices were designed to exclude chip competitors, noting that its licensees included Texas Instruments, NEC, Infineon, Philips, Agere, Motorola, VIA and Fujitsu.

"We are proud that our licensing program has enabled many new entrants to design innovative wireless devices and compete in the 3G marketplace," said Dr. Paul E. Jacobs, chief executive, in the statement. "It is not surprising that the reported allegations come largely from entrenched 2G suppliers who have the most to lose from the enhanced and expanded competition in 3G created by Qualcomm’s widespread licensing and supply of enabling 3G technology, chipsets and software."

Steve Altman, president of Qualcomm, said in the statement the company’s business practices were not harming the industry as some have alleged. "In fact, the average selling price of WCDMA handsets is declining, and WCDMA subscriber uptake is increasing-- each at a faster rate than GSM experienced during its early commercial years."

Qualcomm also noted allegations regarding royalty discounting, while misleading, are simply complaints about legitimate and lawful price competition, which the company said was good for manufacturers, operators and consumers.

The statement said Qualcomm would vigorously defend against any claim of unlawful conduct in its licensing or chipset sales practices.