[HN Gopher] Qualcomm shook down the cell phone industry for almo...
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Qualcomm shook down the cell phone industry for almost 20 years
(2019)
 
Author : ddtaylor
Score  : 92 points
Date   : 2022-05-30 10:10 UTC (2 days ago)
 
web link (arstechnica.com)
w3m dump (arstechnica.com)
 
| bsder wrote:
| As much as I really loathe Qualcomm, they placed an _enormous_
| existential bet on QAM and that they could make the linearity
| requirements work.
| 
| For a long time, the power amps to make that work had an
| absolutely _abysmal_ yield and only a single company (Rockwell
| Defense) could fab them.
| 
| The company walked a tightrope and could very well have died.
| This is the kind of tech advancement that _absolutely_ deserves
| some level of patent protection.
| 
| The fact that the patent system allows this to be parlayed into a
| multi-decade shakedown is different from whether Qualcomm should
| have been granted patents initially.
 
  | xoa wrote:
  | I think the basic problem was in their abuse of the standards
  | process. Having patents on your own inventions for a limited
  | time, for hardware at least [0], has strong arguments. But it
  | doesn't typically exempt one from general antitrust law as far
  | as colluding with others to corner a market. On the other hand,
  | there is an unavoidable natural physical limitation when it
  | comes to the viable electromagnetic spectrum, and huge win/wins
  | all around in everyone being standardized across carriers and
  | devices for how they communicate.
  | 
  | The spirit of the SEP process was supposed to be essentially a
  | quid pro quo: everyone can volunteer to join and then have
  | their IP used in a way that would normally be illegal (all
  | players leveraging various government granted or built
  | monopolies to essentially force the entire world to use and pay
  | for certain IP), and thus get a massively larger market for
  | their products, but in exchange have to give up the normal full
  | levels of control a patent would afford by offering RAND terms
  | to all on the value of those specific contributions. It's a bet
  | that more money can be made from a guaranteed smaller cut on
  | billions of devices vs a large cut on ones own vertical stuff
  | (and possibly being frozen out of usage in certain markets
  | entirely).
  | 
  | Qualcomm though leveraged that to extract a % of everything
  | else in the device too using this multi-level monopoly. That
  | wasn't OK. If from the very beginning they'd wanted to just
  | demand everyone else not use any of their patents except by
  | specific licensing with them, no inclusion in any standards,
  | that'd be honest enough. Or if they'd gone the other way and
  | full RAND that too. But they wanted to have their cake and eat
  | it and that should have been stomped on by regulators right off
  | frankly.
  | 
  | ----
  | 
  | 0: I don't think software patents should exist at all because
  | the core investment of software is more than adequately
  | protected by copyright.
 
  | sydthrowaway wrote:
  | What's the next future in modulation schemes?
 
    | femto wrote:
    | Massive MIMO. Arguably a modulation scheme if the array of
    | antennas is treated as a whole.
 
  | stefan_ wrote:
  | Sure, and you should get some money for your tech in that
  | cellphone chip. But that doesn't mean you should be able to
  | extort some % of a car just because it's got the chip in it.
 
| stevenjgarner wrote:
| Anybody want to summarize the "scathing 233-page opinion" how
| Qualcomm's patent licensing "violated American antitrust law".
| This article basically explains how Qualcomm was intelligent
| about protecting their proprietary position. It does not seem to
| explain how that protection was illegal.
 
  | stevenjgarner wrote:
  | This article definitely does not hit the nail on the head.
  | Patent holders regularly supply patented technology through a
  | patent license agreement. What exactly was discriminatory and
  | not in good faith about the way Qualcomm did it? INHO, a legal
  | ruling this monumental should be way easier to understand for
  | those of us who routinely supply and license proprietary
  | technology. The article does not summarize or explain the
  | actual court's findings:
  | 
  | The Court orders the following injunctive relief:
  | 
  | (1) Qualcomm must not condition the supply of modem chips on a
  | customer's patent license status and Qualcomm must negotiate or
  | renegotiate license terms with customers in good faith under
  | conditions free from the threat of lack of access to or
  | discriminatory provision of modem chip supply or associated
  | technical support or access to software.
  | 
  | (2) Qualcomm must make exhaustive SEP licenses available to
  | modem-chip suppliers on fair, reasonable, and non-
  | discriminatory ("FRAND") terms and to submit, as necessary, to
  | arbitral or judicial dispute resolution to determine such
  | terms.
  | 
  | (3) Qualcomm may not enter express or de facto exclusive
  | dealing agreements for the supply of modem chips.
  | 
  | (4) Qualcomm may not interfere with the ability of any customer
  | to communicate with a government agency about a potential law
  | enforcement or regulatory matter.
  | 
  | (5) In order to ensure Qualcomm's compliance with the above
  | remedies, the Court orders Qualcomm to submit to compliance and
  | monitoring procedures for a period of seven (7) years.
  | Specifically, Qualcomm shall report to the FTC on an annual
  | basis Qualcomm's compliance with the above remedies ordered by
  | the Court.
 
  | yonran wrote:
  | I think the crux of the article is this: they used the
  | protected monopoly on one market (e.g. CDMA modems) to gain an
  | unfair advantage in the other markets (all the other chips in a
  | cell phone).
  | 
  | > Qualcomm's patent licensing fees were calculated based on the
  | value of the entire phone, not just the value of chips that
  | embodied Qualcomm's patented technology. This effectively meant
  | that Qualcomm got a cut of every component of a smartphone--
  | most of which had nothing to do with Qualcomm's cellular
  | patents.
 
    | radicaldreamer wrote:
    | Do competitors or manufacturers using other vendors (Huawei,
    | Samsung, Mediatek, Apple) have to pay Qualcomm licensing
    | fees?
 
      | noselasd wrote:
      | Absolutely
 
| paxys wrote:
| When I worked at Qualcomm a while ago the company had two major
| business lines. One of them was developing and selling a line of
| mobile chipsets (Snapdragon) to a lot of the major players in the
| market, for which they employed thousands of top engineers and
| researchers. The other was licensing their CDMA patents to _all_
| of the players in the market, and this org was run entirely by
| lawyers. The second business made _significantly_ more money than
| the first.
 
| dang wrote:
| Discussed at the time (of the article):
| 
|  _How Qualcomm shook down the cell phone industry for almost 20
| years_ - https://news.ycombinator.com/item?id=20055517 - May 2019
| (300 comments)
 
| thomasjudge wrote:
| What is the point of resubmitting this article now?
 
| bogwog wrote:
| Who could've predicted that patents, legal instruments designed
| to create monopolies, would be used to create monopolies?
| 
| EDIT: Apparently, Qualcomm won the appeal[1]. I wonder if the
| situation is still as bad today as it was when this article came
| out?
| 
| https://www.qualcomm.com/content/dam/qcomm-martech/dm-assets...
 
  | jjoonathan wrote:
  | Probably the same people who gave the USPTO a profit motive to
  | issue patents, no matter how absurd.
  | 
  | (Well, not "profit" in the sense of having shareholders and
  | dividends, but definitely in the sense that its budget comes
  | from fees and it gets more fees if it issues more patents.)
 
| josaka wrote:
| This ruling did not survive on appeal:
| https://scholar.google.com/scholar_case?case=542088572460013...
 
  | rektide wrote:
  | Which feels insane. It feels like there's no constraints, no
  | restrictions on what's allowed to keep down competition.
 
    | lazide wrote:
    | Patents are time limited, then go into the public domain for
    | this reason.
 
      | hedora wrote:
      | The USPTO makes it easy to re-patent things after
      | expiration.
 
        | paulryanrogers wrote:
        | Technically doesn't it require some new innovation? And
        | the original patent itself still enters the public
        | domain?
 
        | rektide wrote:
        | A vast part of problem is that the people deciding aren't
        | adequately technical, can't judge the non-obvious clause
        | adequately.
        | 
        | Making up some faint new claim, that so happens to
        | largely encompasses the existing claim, feels all too
        | regular. There's just so few people fit to judge, to
        | appropriately decide to award or not award another decade
        | or so of monopoly to a patent.
 
      | wmf wrote:
      | Enjoy your EDGE phone.
 
      | rektide wrote:
      | 20 years of complete & total control of an industry is way
      | way way too long. If we're going to allow what Qualcomm
      | did, it should be 5 years, absolute tops, probably less.
      | 
      | This is just so proper fucked, such a messed up
      | manipulation. And I agree- it does look legal. The law
      | debases itself, delegitimizes itself, brings shame to
      | itself by permitting this unbelievable horseshit. Which, as
      | others elsewhere have pointed out, is what was allowed:
      | this ruling got appealed & overturned. Qualcomm got away
      | with being a tyrant & ruining an industry.
 
      | mtgx wrote:
 
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