Guest:
Dr. Kirti Gupta is the Chief Economist at Qualcomm Inc., where she serves as an in-house economist, specializing on Intellectual Property (IP) and competition policy and strategy. In this role, she is responsible for managing the substantive direction of the global IP policy and advocacy outreach efforts, and for conducting original research on issues related to IP and competition law and economics. She has been involved in various international antitrust and litigation cases. Kirti has also been responsible for developing economic models for determining Qualcomm’s optimal IP strategy world-wide and on designing algorithms for IP portfolio valuation. Prior to her role as an economist, Kirti spent over a decade as a wireless systems engineering expert, working on research and development of third and fourth generation (3G and 4G) wireless cellular systems and has represented Qualcomm in various global technology standards bodies. She is a co‐inventor of thirty-five patents in the field of wireless communications. Dr. Gupta holds a Master’s degree in Electrical Engineering from Purdue University, and a Ph.D. in Economics from the University of California, San Diego.
Kirti starts the podcast with providing insights from her technical knowledge of standards development. She explains that people often forget about the complexity of the technology that we deal with. 4G alone is subject to over 1,400 specifications. Printing these hundred pages documents would fill whole rooms. And thousands of engineers work on various complex technical aspects that are so different that a person working on cellular security aspects would not even understand a person working on location services or coding aspects. This is how rich and complex this tech ecosystem is. This complexity must be considered when economist talk about ex ante and ex post worlds.
Kirti goes on and comments about some of the recent policy debates and ideas floating around. In her view a publicly available claim charted database of SEPs would not make any sense. Claim charts are complex and expensive and are typically exchanged in licensing negotiations under NDA. NDAs are requested by both parties. Licensees would e.g. never want to disclose information on future product plans or volumes of sales in certain countries to the public. Kirti also points out that she believes claim charting by third parties may also be difficult because we would need experts with different skill sets – patent examiners from patent offices are not a fit in her view.
Kirti also believes that setting an aggregated royalty rate to determine a share of this rate does not reflect the value of SEP portfolios. In Kirti’s opinion the top-down approach is a forced central planner approach. She believes you cannot take a price cap and then use simple counts of patents to arrive at a FRAND rate. That to her has no economic foundation. Kirti explains there is some very core and valuable patented technology that must be valued much higher than some incremental technology. Also, Kirti argues that licensing is always about a dynamic patent portfolio, like a leaking bucket. Patents expire and lapse falling out of the bucket while new ones are coming in. So, you will always have a license that covers the bucket no matter what’s in it.
With regards to where to license in the value chain Kirti confirms that Qualcomm offers licenses on different levels e.g. for automotives on the tier 1 level the DCU (Data Capture Unit) level and also tier 2 level the module makers the telematics. Kirti argues it does not matter where to license in the value chain if the rate does not change. It only matters for where it practically makes most sense to license. Licensors must now deal with the reality of new use cases such as IoT to identify what practically makes sense.
