Apple’s patent dispute with Qualcomm “turns out to be a pretty big deal,” Nocera writes. “If Apple wins, it could change one of the most prevalent practices in Silicon Valley — while wreaking havoc on the business model of not only Qualcomm, but also Nokia Oyj, Ericsson AB and other companies that rely on patents for their profits. If Apple loses, patent licensing practices will continue to throw sand in the wheels of commerce — and cost consumers money.”

Qualcomm “licenses its technology to smartphone makers even when they don’t use its chips; indeed its patents are so vital that the Institute of Electrical and Electronics Engineers — the body that sets standards in the electronics industry — has labeled a number of them ‘standard-essential patents.’ That means that if you’re a phone maker, you have no choice but to pay Qualcomm to license its patents. Because those patents are indispensable, however, the institute also mandates that Qualcomm set a licensing fee that is ‘fair, reasonable, and non-discriminatory,'” Nocera writes. “The dispute is over how much Apple — and all the other companies that make smartphones — should pay.”

“Because Qualcomm had the right to go to court to seek an injunction against companies that refused to pay its fees, most companies tended to pay up, however grudgingly,” Nocera writes. “In February 2015, however, the institute made several critical policy changes that seemed to give the smartphone makers the upper hand. It ruled that patent fees should no longer be paid as a percentage of the entire price of the phone, but rather as a percentage of the component that used the technology.”

Read more in the full article here.

MacDailyNews Take: Qualcomm’s FRAND abuse must not stand.

Qualcomm’s licensing scam — charging a percentage of the total cost of all components in the phone, even non-Qualcomm components — is unreasonable, illogical, and irrational.

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