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Industry Leaders Reach Agreement on Royalty Rates for W-CDMA
Posted: 06-Nov-2002 [Source: Ericsson press release]

[Industry leaders reach a mutual understanding supporting modest royalty rates for W-CDMA technology worldwide ensuring fair and competitive pricing for W-CDMA handsets and infrastructure equipment.]

Industry leaders NTT DoCoMo, Ericsson, Nokia and Siemens today reached a mutual understanding to introduce licensing arrangements whereby essential patents for W-CDMA are licensed at rates that are proportional to the number of essential patents owned by each company. The intention is to set a benchmark for all patent holders of the W-CDMA technology to achieve fair and reasonable royalty rates.

The companies together own the clear 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 above companies also own a significant number of the essential patents applicable to the CDMA2000 standard. These patents will be licensed at fair and reasonable terms.

As essential patent holders, Japanese manufacturers Fujitsu, Matsushita Communication Industrial (Panasonic), Mitsubishi Electric, NEC and Sony Corporation have 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," says 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."

"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 targetted cumulative 5% level. This makes the W-CDMA standard safe to invest in for operators, manufacturers and application developers," says Yrj Neuvo, Executive Vice President of Nokia. "We can see the IPR initiative gaining support amongst the industry, and encourage others to join."

" W-CDMA is the standard selected by most operators in the world for their future business, and 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 says Torbjorn Nilsson, Senior Vice President Marketing & Strategic Business Development of Ericsson.

"This initiative is meaningful for promoting the W-CDMA services by keeping cumulative royalty rate below 5%," says Kota Kinoshita, Executive Vice President of NTT DoCoMo. "We have discussed through the 3G Patent Platform Partnership (3G3P) how to license essential patents at acceptable royalty rates. We believe the intent of the arrangement is well harmonized with that of 3G3P."

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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