Everyone Pays for IPRs

Would this be the winter of our IPR discontent? The world market has taken a small step for IMT-2000, a giant step for marketplace decision. Although I am all for competition and the market choosing what it believes is the stronger element over the less desirable, the inherent undercurrent created by IPRs troubles me.

IPRs, or intellectual property rights, are similar to patent protection on technology developments. An IPR could be as seemingly minor as how one circuit works within a system or as large as how a call is handed off in an RF environment. The evolution of the wireless industry as well as other high technology industries has been promoted substantially, thanks to the sharing of numerous IPRs from various parties, particularly manufacturers, in putting together a winning technology.

It is a little like team play of the card game Go Fish. Manufacturers have different cards or technologies that could enhance the pursuit of laying out the perfect, world digital standard. One asks the other, do you have a five? Yes, the other replies. OK, the first says, if I give you my five, will you give me your seven?

And so it goes until everyone has agreed upon the ultimate standard with which to build and bring to market. And everyone has contributed his best technology into a winning final product. A residual benefit to this approach is all of the players pretty much break even on the technology sharing.

However, today there are vendors who take their IPRs very seriously. So seriously, in fact, that the idea of trading and sharing without significant dues-paying is incomprehensible. I understand this mentality when a technology is so revolutionary that it could not benefit from the brain trusts of other technologists. But I wonder if playing the IPR card as a revenue generator is harmful in the long term.

Consider what happens with this approach. One company charges royalties for its technologies. Other manufacturers, wanting to provide a full menu to their customers, pay the royalties. Those fees go into the total cost of product development. Because today's manufacturers are for-profit organizations and have shareholders to answer to, they have to pass that cost onto their customers. That is you. Because of this, you are footing the bill for the technology whether you choose that technology or not.

Now this catches you between a rock and very hard, uncomfortable place. Because you are a for-profit organization and you have shareholders and bankers to answer to, you have to pass the cost on to your customers somehow. How is that possible when your competitors are constantly pushing their prices down?

I believe in marketplace decisions and competition like the next guy. However, this approach to IPRs only serves to encourage all of the other vendors to take a more closed view of their own IPRs. If some manufacturers are taking the proceeds from their IPRs directly to their bottom lines, others are likely to follow. What happens then is the idea of a single standard vanishes into oblivion, or a new technology becomes so expensive that you, the carrier, couldn't afford to bring it to market if you wanted to.