Qualcomm implemented changes to its patent licensing model to make the unit more flexible, a move which could help mend soured relations with regulators and major customers Apple and Huawei.
Speaking to Reuters, the company’s patent licensing head Alex Rogers said it had broadened use of its licensing model for 5G and Qualcomm could receive a lower rate for deals struck in the future.
The move could also make the business more dependable if regulators believe the terms are favourable – as long as Apple as well as a number of other major customers resolve their ongoing disputes with Qualcomm.
Qualcomm’s patent business has generated a large bulk of the company’s profit for years alongside its chip business, but the unit has courted controversy with handset makers as well as been subject to a number of global regulatory fines.
Currently, handset makers have the option of licensing two sets of Qualcomm patents. It offers a “full suite” which costs companies around 5 per cent of the cost of the handset, or “standard essential patents” which only includes patents for equipment on mobile data networks for a rate of 3.25 per cent of a handset cost.
Reuters reported that customers tended to licence both sets to avoid legal action, but Qualcomm has now moved to make it easier for customers to only licence the “standard essential patents”, while adding additional patents for future 5G networks to the suite at no extra cost.
Qualcomm’s Rogers, however, clarified it had “not lowered the rate. What we’re doing is including more technology, more intellectual property in the offering without increasing the price. What we’re doing here is creating a foundation for stability going forward”, he added.
Last week, the company did state it would review its patent licensing fees against the first $400 of a handset. Previously the cap was set at $500.
Rogers did not reveal the status of its ongoing licence disputes with its two major customers, Apple and Huawei.
Last month, The Wall Street Journal reported Qualcomm had entered into advanced talks with Huawei about settling an ongoing patent dispute.
Apple in 2017 also accused Qualcomm of overcharging customers which has led to a war of words between the two. Qualcomm also recently faced accusations by regulators in South Korea and China for abusing its dominant market position due to its licensing regime.