Nokia pushes for cap on W-CDMA patent royalties

Nokia pushes for cap on W-CDMA patent royalties
By John Walko, CommsDesign.com
May 9, 2002 (10:29 a.m. EST)
URL: http://www.eetimes.com/story/OEG20020509S0027

LONDON — A senior executive at Nokia Networks is urging the mobile communications industry to limit the amount of money equipment makers are asked to pay for licensing intellectual property (IP) used in 3G handsets and networking equipment based on the W-CDMA standard.

J.T. Berquist, senior vice president at Nokia Networks, said it is vital for the sustained growth of the mobile industry that the cumulative royalty costs of W-CDMA is pegged at a maximum of 5 percent. "In our opinion, this is the level of royalties that encourage greater growth and innovation in the industry."

The 5 percent figure is much lower than what is generally charged for IP in the mobile communications sector. Nokia argues that with W-CDMA becoming a de facto standard for 3G, more reasonable licensing rates would reduce the cost of the equipment, speed the rollout of networks and generate higher demand.

But for the initiative to work, Nokia would need the backin g of the other major holders of patents relating to W-CDMA technology, including Ericsson, which claims it owns about 40 percent of the IP, as well Qualcomm, Motorola and NTT Docomo. Nokia says it owns about 25 percent of the "essential patents registered so far" with key standards organizations such as the European Telecommunications Standards Institute, and the Association of Radio Industries and Business.

Nokia said it has started discussions with other IP holders to reach consensus around the 5 percent cap. However, a spokesman for Ericsson has already said the Swedish company would prefer to see the market decide the level of royalties charged for W-CDMA intellectual property.

The Third Generation Partnership Project (3GPP), which represents many of the mainly European and Asian operators and equipment suppliers, already supports efforts to limit the IP rates charged for all types of next-generation mobile technologies and standards.

Earlier this year, at the 3GSM World Congress in Nice, Fr ance, Nokia unveiled several other initiatives to bring the industry around to reducing the cost of developing hardware and software for 3G.