Is it a common practice in other fields to charge a percentage of final product as a fee? To me it seems that while this can make sense to some extent there should be a cap. If I put a modem which uses Qualcomm IP in a car should I also pay 5% of the price?
A patent holder can charge whatever they want, or even refuse to allow anyone to license it.
The difference is that Qualcomm agreed to FRAND (fair, reasonable, and non-discriminatory) licensing terms in exchange for their patent being included in the standard.
Once they got their patent in the standard, now they're saying they get to charge whatever they want.
That's the problem. That wasn't the deal they and everyone else agreed to, and it's too late to remove their patent from the standard.
Isn't the point that the R of FRAND is being violated because it is not reasonable to charge a % of the cost of the entire device when they are contributing only the modem.
no, a patent holder CAN NOT charge whatever they want. Apple tried it during their quest to destroy Android (Samsung) a few years back, but most of their utility claims were "apportioned" accordingly. Apple was able to gorge the entire profit on per device on a couple of frivolous design patents, but the SCOTUS stepped in to reverse that absurd ruling last year.
Contrary to your unsubstantiated claims, Qualcomm's licensing rates are publicly available and published time to time -- often in the range of 3% to 5%. Apple according to this article pays nowhere close to the published rate that most other handset makers are paying.
In this particular industry, it is. It depends on whether qualcomm's patented features "drive the market demand" for the finished goods.
So in mobile devices, Qualcomm's wireless patents do deservingly get per device royalty whereas, for automobiles, it would make no sense to use the same per device royalty.
On a somewhat unrelated note, Apple demanded the entire profit on per device basis for a couple of frivolous design infringement from Samsung and won a couple of years ago. This absurd, biased lower court ruling was overturned by the Supreme Court last year.
