Large differences in FRAND rates and royalty payments are legitimate and pro-competitive

Cellular technology companies with substantial device businesses — including Huawei and Samsung today, and Nokia until it sold its handset business in 2014 — generate no more than modest net licensing revenues, despite the significant Standard-Essential Patent (SEP) portfolio sizes they have declared. Crucially, they must also cross license their manufactures against infringement of other companies’ patents.  Companies without significant device businesses, including Qualcomm and InterDigital, have no such overriding need to barter their intellectual property. Instead, their businesses are focused on licensing cellular and smartphone patents for cash, upon which their technology developments crucially depend.Many licensing deals are largely barter,with reduced or no cash paymentsSEP licensors do the costly technology developments that make new generations of standards including 3G, 4G and 5G openly available to all OEMs: however, since 2011, if not…

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