LONDON — Some of the world's biggest hitters in the mobile communications equipment sector have joined forces to establish rules for licensing patents related to Long Term Evolution (LTE) technology.
The aim is to avoid the bitter patent and Intellectual Property Rights (IPR) rows that broke out during the development of third generation mobile equipment.
The companies that have now agreed to work towards predictable and more transparent costs for licensing intellectual property for LTE gear include Alcatel-Lucent, Ericsson, NEC, NextWave Wireless, Nokia, Nokia Siemens Networks and Sony Ericsson. They invited other interested parties to join the initiative that is intended to ease the pain of licensing IPR related to both LTE and its related Service Architecture Evolution standards (LTE/SAE) effort.
The effort is crucial since many companies hold IPR related to different aspects of LTE technology, and patent pooling, as the process is known, is thought to offer a sufficient reduction in risk and collectively benefit an otherwise competitive industry. It should also speed up product introduction and network implementation.
Surprisingly, one of the main suppliers of devices for mobile broadband, Qualcomm Inc., is missing from the original backers of the initiative. The reason for that may be that it has still not given up on its own flavor of mobile broadband, dubbed Ultra Mobile Broadband, as a potential standard.
The framework is based on the prevalent industry principle of fair, reasonable and non-discriminatory (FRAND) licensing terms for essential patents. This means that the companies agree, subject to reciprocity, to reasonable, maximum aggregate royalty rates based on the value added by the technology in the end product and to flexible licensing arrangements according to the licensors' proportional share of all standard essential IPR for the relevant product.
The companies are supporting a maximum aggregate royalty level for LTE essential IPR in handsets as a single digit percentage of the sales price. For notebooks with embedded LTE capabilities, a single digit dollar amount has been proposed.
"The adoption of this initiative will reassure operators of the early widespread adoption of LTE technology throughout the consumer electronics industry," Ericsson's Senior Vice President, General Manager and Chief Technology Officer Håkan Eriksson said in a statement accompanying the announcement.
And Ken Stanwood, Executive Vice President Technology and Standards, NextWave Wireless suggested: "Todays devices contain a multitude of different technologies. To ensure all patent holders are treated fairly without stifling the market, it would be preferable for patent holders to offer reasonable terms."
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