As a result, the whole TFTC decision is replaced by the settlement terms and the decision shall be deemed revoked ab initio (from the beginning) and Qualcomm’s litigation filed in the Taiwan Intellectual Property Court is now closed.
As part of the resolution, Qualcomm has agreed to certain process related commitments offering mutual good faith and fairness in the negotiation of agreements with headset licensees to Qualcomm cellular standard essential patents (SEP).
Qualcomm Technology Licensing (QTL) has been quite transparent about its SEP pricing. The company holds 130,000 patents and wants 3.25 percent for the SEP with the smartphone royalty cap at $400 selling price. For example, a $200 smartphone ends up owing QTL $6.50 per device (3.25 percent x $200) while the most expensive phone, let’s say iPhone or a Snapdragon 845 based Asus Zenfone 5Z that clearly sells for over $400 would end up with (3.25 percent x $400) or $13 US dollars for all standard essential patents for 3G / 4G and even 5G.
As part of the settlement, the parties agreed that the NTD 2.73 billion (approximately $93 million USD) Qualcomm paid towards the monetary fine through the end of July will be retained by the TFTC and no other amounts will be due.
Taiwan needs Qualcomm's help in 5G
Someone in Taiwan realized that the island needs Qualcomm to help the whole ecosystem and its OEMs thrive in 5G. Huawei helps the China scene, Samsung helps Korea and yes Taiwan does have MediaTek that didn’t really do that well in fighting Qualcomm in the 4G enabled high end. MediaTek is based out of Taiwan and was likely very close to Taiwan FTC. Just saying.
Asus is one of the manufacturers which hopes to make more sales going toward 5G and HTC as one of the manufacturers out of Taiwan that used to play a big role in the mobile market. They desparately need Qualcomm’s help in order to stay competitive to a swarm of competition that never sleeps. In just eight years we went from Xiaomi showing up to the market at the time when HTC was one of the great names of mobile, to the point that Xiaomi (China based company) ended up with a market cap of over $400 billion. Things change fast.
Alex Rogers, executive vice president and president, Qualcomm Technology Licensing, said: “We are pleased to have reached a mutually beneficial resolution with the TFTC that puts the litigation behind us. This settlement directly addresses concerns raised by the TFTC, regardless of disputed positions, and builds on our foundation of collaborative, long-term business relationships in Taiwan. We are happy to reaffirm our commitment to licensing our valuable intellectual property under principles of fairness and good faith. With the uncertainty removed, we can now focus on expanding our relationships that support the Taiwanese wireless industry and rapid adoption of 5G technology.”