Editor's Note: Since its inception in 1985, Qualcomm has focused on the wireless arena and invested a total of $44 billion in research and development funding to help Qualcomm grow into a globally recognized wireless technology and product company. However, just as the popular "popular red is not much" in the entertainment industry, Qualcomm, which is "red", has also received extensive attention and some doubts. A few days ago, Qualcomm Global President Derek Aboli accepted an interview with the media to interpret patent licenses, chip platform strategies, ARM servers and other areas to restore a true Qualcomm.
Mentioning Qualcomm, I believe that the industry is no stranger, the first thing that comes to mind is its mobile phone chip and a unique patent licensing business model. However, from many reports, we still see that the industry does not really understand Qualcomm, and even there is quite a misunderstanding of Qualcomm. With the 2017 China Development Forum held recently, the entire media of our communications world had the opportunity to interview Derek Aberle, the global president of Qualcomm, and to focus on Qualcomm, such as the patent licensing model and the PC and server market. Collisions and conversations were carried out on topics that were sensitive and misleading in the industry.
Misunderstanding 1. Is the patent authorization model fair and reasonable?
Communication World All Media: See your background and know that you were an expert in intellectual property. At present, from a global perspective, the business model of Qualcomm's patent licensing has been questioned in the industry. What do you think about this problem?
Derek Aboli: In this respect, we did encounter some challenges. If we simply review the history and current situation of the whole thing, in fact, two or three companies in a few countries or regions are leading this kind of questioning. It still lies in their commercial problems of what kind of price they are willing to pay with our intellectual property. During the negotiation process, some companies hope to pull in the regulators as a bargaining chip for their own negotiations.
In South Korea, for example, South Korean regulators have previously ruled on Qualcomm’s monopoly. If we look closely at the whole process of this ruling, in fact, this is completely contrary to the provisions of the South Korea-US trade agreement. The main driving factor for Korean regulators to make rulings is the commercial interests of a few companies. Such a ruling is wrong in many ways. Now Qualcomm has filed an appeal with the Korean court, hoping to let the patent authorization dispute enter the judicial process through the court. Once in the court process, the independence and impartiality of the court is undoubtedly more convincing than the regulator, so we are more optimistic about the latter's ruling.
In addition, it was before Apple v. Qualcomm abused the patent license, the US Federal Trade Commission (FTC) made a critical opinion on this matter (not a ruling). This critical opinion was made a few days before the US government changed. After the new government took office, the original chairman of the US Federal Trade Commission left. After the new chairman took office, he gave a written opinion and criticized the previous comments. He believes that this opinion lacks persuasiveness and factual basis in terms of legality, objectivity and economy. Therefore, with the change of the senior management of the US Federal Trade Commission, we believe that the original critical opinions will also change.
Communication World All Media: Some vendors, such as terminal vendors, complained about Qualcomm’s licensing fees in the form of a packaged patent license when it cooperated with Qualcomm, but some of the patents were outdated or they did not think needs. Suppose there are 100 patents in the package, but the authorized manufacturers only need 60 to 70, of which 30 patents are not needed. How do you think about this phenomenon?
Derek Aboli: We take China as an example. We have finally completed a rectification plan after a survey conducted by the National Development and Reform Commission of China. In the rectification plan, Qualcomm has made a series of commitments on intellectual property licensing. One of the promises is that the user is only charged the standard essential patents, and these standard essential patents can no longer be split, otherwise the relevant functions cannot be effectively implemented in the relevant products. For non-standard essential patents that can be split by patent portfolio, we negotiate separately with the manufacturer to license, the key is to look at the manufacturer's own needs.
In fact, in reality, some licensees are hoping to obtain Qualcomm's entire patent portfolio when negotiating with Qualcomm, so that they will have sufficient freedom and flexibility in developing their own products in the future. If you choose any of Qualcomm's technology and patents, you don't need to re-negotiate with Qualcomm when you need to add a new Qualcomm patent in the future. Therefore, the practice of providing patents like packaging is achieved only by the needs and promotion of the licensee.
In fact, after we reached a rectification plan with China's National Development and Reform Commission, and some Chinese companies talked about new licensing agreements, some companies even thanked us for lowering the standard required patent license fees. Therefore, from the perspective of the licensee, they still hope to get the most freedom and flexibility so that they do not have to worry about patent claims from Qualcomm and other manufacturers during product development.
As for the claim that some patents in our patent portfolio have expired, the fact is this: when a licensee holds a patent portfolio, objectively, the patent expires over time. However, Qualcomm puts 20% of the entire revenue into the research and development of new technologies every year, which makes the number of new patents we add to the patent portfolio far exceed the number of patents that expired in the current year. Based on this, the licensee holds the license of Qualcomm. The number of patents is constantly increasing rather than decreasing.
From a higher perspective, Qualcomm's patent-licensed business model is actually the most competitive. Qualcomm has invested huge sums of money in research and development, and the results of these R&D are of fundamental importance to the development of the entire communications industry. In fact, Qualcomm has been the engine of key technology R&D and innovation throughout the development of the mobile communications industry, and standardization has enabled R&D and innovation to be used by every participant in the entire industry. Of course, in turn, we also hope to get a return through the form of intellectual property authorization. After all, Qualcomm has invested heavily in technology research and development, and has contributed and shared technology to the industry.
We have noticed that the Chinese government has been vigorously promoting "double innovation", and in order to effectively promote "double innovation", we must effectively protect intellectual property rights. Otherwise, people are reluctant to invest in research and development, because the investment in intellectual property also wants to be rewarded, but the real challenge is that a few companies have acquired and used the technology invented by others, but they are not willing to pay the corresponding fees.
In addition, I would like to emphasize that Qualcomm has never charged any patent licensing fees to competitors in the chip market. On the contrary, our competitors in the chip market, using and benefiting from our technology, compete with us in the market, which makes the choice of market and users more free and diversified, which proves Qualcomm patent from one side. The authorized business model encourages and promotes fair competition and is conducive to the fairness and rationality of the market and users.
Communication World All Media: Will the patent licensing fee be differentiated and differentiated for different vendors?
Derek Aboli: Each of Qualcomm's patent license agreements is negotiated separately with Licensee, depending on specific requirements and considerations, such as whether there is a cross-licensing or whether other patents are used at the same time. Right and so on. All in all, the value of our technology in the market has been established, so the license agreement we sign must also reflect the fair value of the technology we invent. In fact, many license agreements are very similar. For example, in China, Qualcomm is based on the rectification plan reached with the National Development and Reform Commission, and strictly follows the provisions of the rectification plan to sign a patent licensing agreement with Chinese companies.
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