Page 1 October 15, 2004 Intellectual Property Rights, Technology Standards & Incentives to...
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Page 1 October 15, 2004 Intellectual Property Rights, Technology Standards & Incentives to Innovation Sean Murphy QUALCOMM Incorporated China-U.S. Informatization Policy Roundtable Washington, D.C. -- October 15, 2004
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Transcript of Page 1 October 15, 2004 Intellectual Property Rights, Technology Standards & Incentives to...
Page 1October 15, 2004
Intellectual Property Rights, Technology Standards & Incentives to Innovation
Sean Murphy
QUALCOMM Incorporated
China-U.S. Informatization Policy Roundtable
Washington, D.C. -- October 15, 2004
Page 2October 15, 2004
Observations on Chinese IT market & policies Observations on Chinese IT market & policies
China is a major supplier and consumer of ICT goods & services, and will become am important source of innovation and IPR
These impressive achievements are attributed largely to Chinese-US private sector collaboration
China wants to attract foreign high-tech investment and IPR, yet some policies may risk causing the opposite outcomes:• Emerging preference for unique national or “home-grown” standards• Restrictions on customary business-to-business IPR licensing & royalty terms• Access to Chinese market is often conditioned on commercial concessions
Policies seem to be motivated by assumption that Chinese companies need government intervention to help them succeed:• Global standards development bodies are not accessible to Chinese firms• Perception that foreign IPR owners abuse their rights / exploit licensees
Page 3October 15, 2004
Benefits of Global Standards Benefits of Global Standards
Voluntary, industry-driven ICT standardization:
• Accelerates commercial availability of new technologies / services
• Promotes interoperability
• Increases quality of services / reliability of products
• Promotes economies of scale / lower costs
• Minimizes customer frustration / maximize social benefits
• Promotes cooperation / collaboration among business partners and stakeholders
Page 4October 15, 2004
Global Standards TrendsGlobal Standards Trends
Industry is moving from national to global standards
Decisions about standards adoption are best left to the market place:
• Companies know best which technologies enhance competitiveness and best meet the needs of their customers
• Government policies cannot keep pace with technology innovation, evolution, and convergence
• Most global ICT standards have been created with little or no government involvement
Governments are refraining from compulsory standards and technology mandates; focusing instead on technology-neutral performance requirements
Page 5October 15, 2004
Appropriation Role of GovernmentAppropriation Role of Government
This is not to say governments have no role in standards
For example, US government is involved in standards as a:• Participant in standards development (generally, as an observer)• Regulator• Consumer (government procurement)
Governments can facilitate development and deployment of private sector-led standards that are:
• Voluntary• Driven by technical and commercial merits• Least trade-restrictive• Consistent with domestic and international rules protecting IPR
Page 6October 15, 2004
Government Adoption of StandardsGovernment Adoption of Standards
Ideally, goal is direct adoption of international standards
If not feasible because of compelling circumstance, then resort to adaptation of international standards; however, WTO Members are obligated to:
• Justify the deviation• Ensure that modified standard is least-trade restrictive alternative• Protect and enforce IPR implicated by the modified standard
Only in rare cases, consider development of unique national standards
• This is the exception not the rule• Above WTO obligations apply
Page 7October 15, 2004
Principles of Standards DevelopmentPrinciples of Standards DevelopmentMost global standards development organizations (SDOs) agree on the following common principles:
• Openness to all interested parties
• Transparency in procedures
• Consensus-based decision-making
• Industry-led activities, not government-mandated
• Procedures for review & appeal
• Fair treatment of IPR at outset of standardization process
• Licensing of essential IPR on reasonable and non-discriminatory (“RAND”) terms once standard is completed
Page 8October 15, 2004
Example 1: Chinese Leadership in 3G WCDMAExample 1: Chinese Leadership in 3G WCDMA
CCSA China Communications Standards Association (China)ARIB Association of Radio Industries and Businesses (Japan)TTC Telecommunication Technology Committee (Japan)TTA Telecommunications Technology Association (Korea)ATIS Alliance for Telecommunications Industry Solutions (USA)ETSI European Telecommunications Standards Institute (Europe - CEPT)
Page 9October 15, 2004
Example 2: Chinese Leadership in 3G CDMA2000Example 2: Chinese Leadership in 3G CDMA2000
CCSA China Communications Standards Association (China)ARIB Association of Radio Industries and Businesses (Japan)TTC Telecommunication Technology Committee (Japan)TTA Telecommunications Technology Association (Korea)TIA Telecom Industry Association (USA, Canada, Mexico)
Page 10October 15, 2004
Why Participate in International SDOs?
Example: QUALCOMM IPR is essential to multiple standards
Why Participate in International SDOs?
Example: QUALCOMM IPR is essential to multiple standards• cdmaOne (2nd generation or “2G”)
• CDMA2000 (3rd generation or “3G”)
CDMA2000 1x (voice & high-speed data)
CDMA2000 1xEV-DO (very high-speed data)
CDMA2000 1xEV-DV (voice and very high-speed data)
• Wideband CDMA (also known as “WCDMA” or “UMTS”)
• Chinese variants (TD-SCDMA and SCDMA)
Page 11October 15, 2004
QUALCOMM’s Unique Patent Position:The Result of Significant R&D Investments Over TimeQUALCOMM’s Unique Patent Position:The Result of Significant R&D Investments Over Time
Cumulative U.S. Patents (Issued Patents & Filed Applications)(Excludes non-U.S. filed applications and granted patents)
2,5492,767
2,9643,097
1,2661,1841,1241,0881,031
3,249
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Jun'03 Sep'03 Dec'03 Mar'04 Jun'04
Issued Total (Issued & Pending)
Page 12October 15, 2004
IPR licensing disseminates technology and opportunityIPR licensing disseminates technology and opportunity
TechnologyPlatformVendors
Infrastructure& Equipment
Vendors
ApplicationPlatformVendors
ApplicationDevelopers
ContentProviders
ContentAggregators
MobilePortal
Providers
MobileNetwork
Operators
HandsetVendors
Operator Takes LeadershipOperator Takes LeadershipOperator Takes LeadershipOperator Takes Leadership
MotorolaLucentNortel
EricssonSamsung
ZTE
SamsungLGZTE
MotorolaToshibaSanyo
KyoceraSoutecHiSenseCapitalHaierBird
KonkaTCL
EastcomXoceco
MobileMobileOperatorOperator
““M-PORTAL”M-PORTAL”
ISPISP
ICPICP
ASPASP
QUALCOMM participates in every link of the chain
Illustration: CDMA value chain in China
Page 13October 15, 2004
18 Subscriber Equipment Licensees9 Infrastructure Equipment
Licensees
Amoi Mobile Co. Ltd.Beijing Telecommunications Equipment Factory
Beijing Telecommunications Equipment Factory
CEC Telecom Co., Ltd.
Dalian Daxian Group Co. Ltd.
Dalian Huanyu Mobile Technological Co.
Ltd.
Dalian Huanyu Mobile Technological Co.
Ltd.Datang Telecom Technology Co., Ltd. Datang Telecom Technology Co., Ltd.
Eastern Communication Company Ltd. Eastern Communication Company Ltd.
Guangzhou Southern Hi-Tech Co., Ltd.Great Dragon Information Technology Corp. Ltd.
Haier Group Company Guangzhou Jinpeng Group Co., Ltd.
Hisense Group Co., Ltd.
Huawei Technologies Co., Ltd. Huawei Technologies Co., Ltd.
Konka Group Co. Ltd.Langchao Electronic Info Industry Group Corp.
Legend Mobile Communication Technology
Ltd.Ningbo Bird Co. Ltd.
TCL Holdings Co. Ltd.
UTStarcom, Inc. UTStarcom, Inc.
ZTE Corporation ZTE Corporation
Example: More jobs, world class manufacturers and technology
transfer resulting from QUALCOMM licensing to Chinese vendors
China Benefits from IPR LicensingChina Benefits from IPR Licensing
Page 14October 15, 2004
IPR Licensing Promotes Competition And Consumer Choice in China, as illustrated:IPR Licensing Promotes Competition And Consumer Choice in China, as illustrated:
There are over 160 different CDMA handsets in China, including the 30 new models shown above introduced in 2004
Page 15October 15, 2004
ConclusionsConclusions
Global standards benefit everyone; IPR protection and licensing are critical components
The market should decide what standards are voluntarily developed and deployed
Governments should protect & enforce IPR and refrain from interference with IPR/technology transfer
This approach leads to robust standards, creation of a value chain, better products & services, competitive manufacturers, domestic employment and technology transfer, and enhanced consumer choices
IPR owners need incentives to engage in R&D and ability to earn return on investment or there will be no value chain or down-stream benefits
