An intellectual property gladiator

Intellectual property battles are not always settled in the marketplace. Epic, life-and-death struggles often take place in the judicial arena. It is in the courts that fate of major technologies is often decided, not only on a one-off basis but all along a technology's business development trajectory (remember the Kodak - Polaroid saga?).

As a result, many companies have placed IP at the very centre of their strategies. Recent judicial decisions (RIM vs. NPT or E-Bay vs. MercExchange) threw a spotlight on one category of such companies: the IP trolls, small and pesky. But this is not the only or the most important category of IP combatants.

I was reminded of the diversity of IP battleground by an announcement on May 24 that Qualcomm has initiated a patent infringement suit in the British courts against Nokia. Qualcomm is the embodiment of an IP gladiator, huge, fearsome and combative. The company has been a long-standing champion of a mobile telephony technology, CDMA, which is universally acknowledged as the basis for the next generation of mobile networks and services. Qualcomm did not really invent CDMA (this honour belongs to Hedy Lamar, Hollywood star, who patented the core technology of spread spectrum in 1941 - who said Hollywood does not understand technology?) but it designed all its key components and technologies. While its R&D has been impressive, its IP prowess is nothing short of remarkable. Of course, Qualcomm has patented the critical parts of its work and created an impressive portfolio covering various possible implementations.

But Qualcomm did not stop there. For over 15 years, it has fought vigorously to enforce its patents. In the process, it has taken on practically all the goliaths of the telecom equipment and related semi-conductor industry. It battled Eriksson, Texas Instruments, Nokia, Broadcom and many, many others. And it prevailed in most cases. In the process, the company has become a telecom giant, with FY2006 revenue of 5 billion euros, growing at close to 40% annually and a market capitalisation of 60 billion. The Qualcomm story is far from over. As CDMA takes off commercially, the intensity of both market competition and judicial fights is bound to increase. But I, for one, would be reluctant to bet against Qualcomm.

In the interests of full disclosure: Charles Goldfinger holds a small number of shares in Qualcomm.