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Why do you have to pay for patents when purchasing chips? Qualcomm patent licensing business model detailed

via:CnBeta     time:2018/7/12 8:01:36     readed:54

During July 10-11, US time, Phoenix Net Technology and other media came to San Diego, California, to visit the global headquarters of wireless communication technology and semiconductor giants that have been established for 33 years.

Adjust 5G mobile phone patent fees

“Qualcomm is a company that continues to invent and innovate, and every smartphone has Qualcomm’s invention,” said Penny Baldwin, Qualcomm’s chief marketing officer. Technology Patent Licensing (QTL) and Chip (QCT) are the two pillars of Qualcomm's current business. Needless to say, the chip business is currently using Qualcomm's Opteron chips. The technical patent licensing business is also well understood, that is, transferring the patent license to the company in need and collecting the patent license fee.

Penny Baldwin said that Qualcomm is different from the company that uses technology patents as a moat to enhance product competitiveness. Qualcomm has adopted a cooperative and win-win business model. This model can help small companies to enter the industry without having too high a technical threshold, while also helping companies operating globally to reduce the risk of intellectual property law disputes in countries with intellectual property protection.

In November last year, Qualcomm lowered the rate of standard essential patent license fees, including 5G. After the adjustment, the actual license rate for single-mode 5G mobile phones is 2.275% of the sales price; the actual license rate for multi-mode (3G/4G/5G) mobile phones is 3.25% of the sales price.

Adjusted charging standard

It should be pointed out that this is not calculated according to the retail price of the smartphone, but is charged according to the net selling price of the packaging fee, insurance fee, transportation fee and the like. And Qualcomm also set a ceiling, capping the net price of each mobile phone is 400 US dollars (about 2670 yuan), that is to say, the $500 net selling price of the smart phone is also calculated according to 400 dollars.

Qualcomm pointed out that the 5G patent license rate announced last year is basically the same as the more than 150 copies of the necessary patent license agreement for cellular communication based on 3G/4G brand mobile phones signed in China since 2015. Now Qualcomm does not improve the current licenses. Under the premise of the license rate of the agreement, the 4G subsequent version standards (Release 12, 13, 14) and the first version of the 5G standard (Release 15) are included and will be provided in future negotiations.

That is to say, the standard essential patents that Qualcomm and the National Development and Reform Commission agreed on in the previous decision only cover Release 11, and the 5G patent license rate agreement has covered Release 15, and four new standard essential patents have been added. (Release 15 is the 5G standard and Release 12, 13, and 14 are the 4G standards).

In the automotive and IoT space, Qualcomm has more than 10 years of technology licensing experience, and its licensing fee is

The patented technology based on Qualcomm is calculated for the value provided by the user of the connected device. Qualcomm also announced the patent licensing fees for Internet of Vehicles and IoT devices: the license fee for automotive telematics modules and equipment is currently less than $5 per unit; NB IoT or eMTC (low-end data demand and intermittent connectivity) ) Currently 50 cents per unit.

Qualcomm's adjustment of the patent license fee for 5G smart phones seems to be “adding no increase (in some terms, even price reduction)”. Qualcomm also reduced its revenue by hundreds of millions of dollars each year because of this adjustment, but the overall price of smartphones launched by mobile phone manufacturers has not declined.

Qualcomm's DNA

Qualcomm Senior Engineering Vice President and Technology Licensing Legal Counselor Chen Liren

"The chip itself is not a way to reflect the huge patents required by Qualcomm's huge cellular technology standards," said Chen Liren, vice president of senior engineering and legal consultant for Qualcomm.

That is to say, even if a smart phone does not use Qualcomm's chips, it will certainly use Qualcomm's cellular standard essential patent technology, and must respect its intellectual property rights. This will enable Qualcomm to continue to conduct cutting-edge technology research and development, and to carry out sustainable and continuous innovation.

Chen Liren is an active inventor with more than 120 authorized patents and pending patent applications worldwide. According to him, the technology licensing business Qualcomm has been operating for more than 27 years, and currently has more than 345 technology licensors, and the cumulative use of Qualcomm related technology patents exceeds 10 billion units.

In fact, Qualcomm is essentially a wireless communications technology company. "Every smart phone has Qualcomm's invention." This sentence means that every smart phone will use Qualcomm's wireless communication technology, regardless of whether Qualcomm's chip is used.

Taking a smart phone as an example, a display screen, a processor, a memory, a camera, etc. are its core components, but in reality, communication is the basis of a mobile phone as a communication tool. Many of the foundations of current wireless mobile communications are still based on CDMA technology, which was developed by Qualcomm in 1989, and its appearance has permanently changed the face of global wireless communications.

After that, in the era of 3G and 4G networks, Qualcomm has also been an important promoter of industry innovation. In the 5G era, which is about to open in 2019, Qualcomm has also been at the forefront of the industry. In November 2017, Qualcomm and China Mobile and other partners successfully realized the world's first 3GPP R15-based end-to-end 5G new air interface system interoperability, which is an important milestone for 5G from standard to product and pre-commercial; In the month, Qualcomm completed the industry's first detailed 5G new air interface simulation experiment.

And so on, every time the mobile communication technology revolution Qualcomm can walk in the forefront of the industry, is the long-term spare research and development investment. Qualcomm will invest 20% of its fiscal year revenue into research and development to maintain the company's continued technological innovation. At present, Qualcomm's accumulated R&D investment has exceeded US$51 billion.

In addition, there is a mechanism within Qualcomm: as long as the employee who submitted the patent application will receive a bonus, after the application is approved, another reward will be awarded (the specific amount depends on the value of the patent to the company) . The existence of such an incentive system has also greatly stimulated the enthusiasm of employees for innovation.

Qualcomm currently has more than 130,000 patents, a small portion of which is displayed in the lobby on the first floor of its headquarters building. Like people, companies have their own DNA. Qualcomm is a "system" company. Continuous "invention" and "innovation" are Qualcomm's DNA.

Phoenix Network Technology Liu Zhengwei from San Diego

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