6 November 2002
Wireless giants ink royalty rate pact
Stockholm – Wireless industry leaders NTT DoCoMo, Ericsson, Nokia and Siemens reached a mutual understanding Wednesday to license Wideband Code Division Multiple Access (W–CDMA) at rates proportional to the number of essential patents owned by each company.
The intention, they said, is to set a benchmark for all patent holders of the W-CDMA technology to achieve fair and reasonable royalty rates.
Combined, the companies together own the majority of the essential intellectual property rights (IPR) relevant to the W-CDMA standard selected already by about 110 operators worldwide. This arrangement would enable the cumulative royalty rate for W-CDMA to be at a modest single digit level, the suppliers said in a joint statement.
The same companies also own a significant number of the essential patents applicable to the CDMA2000 standard. Those patents also "will be licensed at fair and reasonable terms," the statement said.
Japanese manufacturers Fujitsu, Matsushita Communication Industrial (Panasonic), Mitsubishi Electric, NEC and Sony Corp., all of which also hold related patents, also expressed their willingness to co-operate with such arrangements.
"It is of the utmost importance for the mobile communication industry and in the interest of both licensors and licensees that the cumulative royalty cost of W-CDMA is maintained at a competitive level which encourages both greater growth and innovation in the industry," said Lothar Pauly, board member of the Siemens Information and Communication Mobile Group.
"As we – the major IPR holders – make our patents available we ensure that W-CDMA stays an open and globally acceptable technology," he said.
Said Yrjö Neuvo, Nokia executive vice president: "This initiative means that cumulative royalty rates of W-CDMA are kept at a healthy level. For example according to the recent developments in China the cumulative royalty rate seems to remain even under our earlier targeted cumulative 5% level. This makes the W-CDMA standard safe to invest in for operators, manufacturers and application developers."
"W-CDMA is the standard selected by most operators in the world for their future business," said Torbjorn Nilsson, Ericsson senior vice president marketing & strategic business development. With this initiative we believe the cumulative royalty will be even lower for W-CDMA than GSM, which has enjoyed unrivalled success compared to any other standard in the world.
The W-CDMA standard is developed by the 3rd Generation Partnership Project (3GPP). In the 3GPP standardization process the declaration of essential IPRs is mandatory. The European Telecommunications Standards Institute (ETSI) and the Association of Radio Industries and Businesses (ARIB) in Japan maintains an updated list of IPR declarations for 3GPP.
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