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Mimi Tam
Let's step back, clear our head and really think. What are the benefits of ...
JKaplanIP
Yes, KB3001 is quite right. Shrewd start-ups can definitely benefit from the ...
Patent pool uncertainty looms over LTE roll out
Peter Clarke
7/30/2010 8:03 AM EDT
Via Licensing, a subsidiary of Dolby Laboratories, announced in February 2010 that 14 LTE patent owners from eight countries had met in San Francisco to build the framework for a joint patent licensing program to support the global adoption of the LTE standard. Via did not name its participants. Notably Via Licensing has also asked to be notified by holders of essential patents that cover technologies used in WiMax.
MPEG LA held its first meeting of essential LTE patent owners in Tokyo, Japan, in September 2009. At the meeting, 12 patent owners from five countries on three continents discussed the specific structure and terms of a patent pool for licensing patents that are essential to the LTE standards developed by 3GPP. Those patent owners included handset manufacturers, network equipment manufacturers, wireless carriers, chipmakers, and research institutions.
The situation is not necessarily going to resolve itself into a single patent pool, although that would be the ideal situation, said Sisvel's Corey. The clear benefit would lower transaction costs through a single process and payment system. However, in the reality it is a question of degree.
"It is impossible to know where all the patents are but we have identified more than 60 companies holding essential patents. It is a very large landscape and fragmented. If there was one major patent pool and a handful of individual companies to deal with, that would be possible. But signing license deals with 40 plus [entities] is not. A unified patent pool is best," said Corey.
A single patent pool would avoid the problem of multiple royalties which could drive up the cost of handsets and equipment. Many companies hold essential patents and have a high opinion of their worth. Companies such as Nokia, Ericsson, Qualcomm and Motorola will each typically expect to receive between 1.5 percent and 3.25 percent on the value of each LTE handset sold just for their essential royalties, said Corey in a slide presentation. Companies such as Alcatel-Lucent, Nortel, Huawei, ZTE and Vodafone also have their own expectations which can quickly lead to a double-digit percentage and market-inhibiting equipment cost.
Corey said there was no particular deadline to Sisvel's patent pooling effort but clearly as equipment starts to be rolled out, the possibility of patent infringement claims and the threat of unknown licensing costs would concern equipment makers and network operators, while patent holders – often the same companies – would be concerned that a failure to act could harm the value and enforceability of their patents.
"There's no deadline but time is a critical issue. They are still working on Release 9 at 3GPP. We think some time in 2011 for the launch of a pool. It depends in part on the group itself. The group needs to make compromises and come together," said Corey.
Related links and articles:
Articles:
MediaTek takes LTE license, partners with Docomo
Analyst: WiMax shrinking, LTE has issues
NSN takes $1.2 billion slice of Motorola
Low bands lead LTE roll out, says analyst
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chanj
7/30/2010 7:25 PM EDT
Companies have their goals to drive the technology. The rolling out of 4G seems distant because of the patents. Join venture could help relieving the issue. Will 4G venders work with different Teleco to drive their technology, ending up with variety breeds of 4G?
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root2
7/31/2010 7:02 AM EDT
Recently TechIPm LLC researched LTE patent portfolios for US market leader among LTE UE (cellular phones, smart phones, PDAs, mobile PCs, etc.) and base station (eNB) product manufactures. Total of 1250 LTE patents, issued and published applications in the US as of May 31 2010, are analyzed to find essential patent candidates for LTE RAN (Radio Access Network) standards. To evaluate the essentiality of a LTE patent, patent disclosures in claim and detail description for each LTE patent are compared to the final versions of the 3GPP Release 8 technical specifications. Total of 72 patents are identified as the potential candidates for LTE baseband modem essential IPR and total of 62 patents are identified as the potential candidates for LTE protocol SW essential IPR.
Among the total of 134 identified patents as the potential candidates for LTE RAN essential IP only 7 candidates are the issued patents. As the prosecution for the published applications is an ongoing process, it is necessary to watch for a possible IP landscape change. A complete LTE RAN essential IP landscape is expected in two to three years as the current prosecution process for the published and unpublished pending patent applications are finished for a complete set of issued patent data pool.
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eewiz
7/31/2010 5:43 PM EDT
I was wondering what is the impact of these patent pooling organizations on the overall litigation & innovation in the industry. For individual companies, who are members of one of such organization, the litigation cost will be minimal because of their backup. On the other hand, they would have to pay a licensing fee/royalty for the number of patents they would want to use after trading in their own patents.
But for a new startup, these costs will be prohibitive, as they dont have any existing patents to trade in. And without being member, it would be difficult to new company to avoid litigation. So I feel this pooling organizations are just a "barrier to entry" mechanisms put up by existing companies to prevent startups attacking them. Any thoughts?
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CamilleK
8/2/2010 3:22 AM EDT
I tend to agree it is a barrier to entry for small players. However, the cross licensing net effect helps in neutralizing or inoculating claims from competitors and it helps reduce legal costs. Navigating through standard committees and choosing what to patent and when are good tasks to master for startups.
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KB3001
8/3/2010 2:13 PM EDT
Yes, it is a barrier to entry but the shrewd start-ups can also play the game to get a foothold into the system if they choose carefully what to patent, as CamilleK said. If they do not have the resources to do it, they can always sell their IP on to one of the big boys who know a good patent when they see it. That said the price would certainly be very low. The market will decide anyway...
From a consumer point of view, this pooling is a good thing. I hope it's not going to take too long though, because every technology, no matter how great, has a limited window of opportunity.
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JKaplanIP
8/4/2010 10:58 AM EDT
Yes, KB3001 is quite right. Shrewd start-ups can definitely benefit from the patent system. The "horror stories" occur when a small company simply ignores, or under-resources, its intellectual property efforts.
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Mimi Tam
8/23/2010 4:20 PM EDT
Let's step back, clear our head and really think. What are the benefits of allowing almost every little new/different method/solution/scheme to be patented in the 1st place.
Patented wireless material often goes into Standards. Only a handful of big companies can afford to patent every chance they get and it has the chain reaction effect (i.e. patent over patent, patent after patent), hence the LTE patent battle in session right now.
Standardization plus patenting ideas that are not fundamental for other ideas to build on is totally a closed group effort. This is limiting participation from non-WG folks from developed and developing countries. This stifles innovations from a broader audience, hamper collective collaboration (i.e. working together, peer reviews, revise and refine) and monopolies opportunities in driving the technology forward let alone slowing down progress.
The "Open Source" philosophy has recently been applied to designs and architectures involving Standards -- the Open Design and Architecture Initiative (ODAI).
Check it out www.odaiworld.org.
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