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LTE Patent Pools: Two's a Crowd

Michelle Donegan
Wireless Bits
Michelle Donegan
11/5/2012
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10:50 AM -- LTE patent pools are like buses: You wait for ages for one to arrive and then a couple come along at the same time.

The wireless industry now has two patent pools for Long Term Evolution (LTE) since Sisvel SpA announced today that it has launched its own, just one month after Via Licensing Corp. started the industry's first patent pool for the 4G standard. (See Sisvel Launches LTE Patent Pool and Carriers Plunge Into an LTE Patent Pool.)

Sisvel's portfolio of patents comes from Cassidian (an EADS company), the Chinese Academy of Telecommunications Technology , the Electronics and Telecommunications Research Institute (ETRI) , Orange (NYSE: FTE), TDF, KPN Telecom NV (NYSE: KPN) and patents that Sisvel acquired from Nokia Corp. (NYSE: NOK) in late 2011. (See Sisvel Buys Nokia Patents and Euronews: Nokia Sells Patents.)

The company says it is open to any and all owners of essential LTE patents.

But it's puzzling to me how the industry will benefit from having two patent pools for LTE when the purpose of such an organization is to reduce the cost, complexity and uncertainty of licensing for operators, equipment suppliers and device makers -- and keep them out of court too. Having to do business with more than one pool adds an extra layer of complexity that I'm sure many in the industry would like to do without.

On the other hand, having two LTE patent pools is better than nothing.

As Florian Mueller, consultant and FOSS Patents blogger, puts it in an emailed response to my questions, "Two patent pools related to the same standard are not as good as one but better than none at all. The number of patent holders on each of today's cellular standards is so high that some kind of aggregation is in the interest of patentees as well as licensees."

But however many LTE patent pools crop up after Sisvel's and Via Licensing's, though, they will be limited by the lack of participation from the big LTE patent holders such as Samsung Corp. , Ericsson AB (Nasdaq: ERIC), Qualcomm Inc. (Nasdaq: QCOM), Huawei Technologies Co. Ltd. or Nokia -- none of which have jumped in to either pool. (See LTE Patent Pool: No Diving! and Vendors Balk at LTE Patent Pool Proposal.)

— Michelle Donegan, European Editor, Light Reading Mobile

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lynnettewrites
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lynnettewrites,
User Rank: Light Beer
12/5/2012 | 5:18:06 PM
re: LTE Patent Pools: Two's a Crowd


Sisvel and Via Licensing said they were creating patent pools back in 2009. What is different now? And what is the critical mass of patents required that make a patent pool a success? The big guys like QCOM and Ericsson won't be a part of these.

Michelle Donegan
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Michelle Donegan,
User Rank: Light Beer
12/5/2012 | 5:18:04 PM
re: LTE Patent Pools: Two's a Crowd


I think what's different now is that these guys are actually doing patent pools rather than just talking about them. Both of them look quite small scale, looking at their memberships, so this is just a start. They definitely need more members to be more effective.


But they will be limited in what they can achieve so long as the big patent owners hold out, like Samsung, Ericsson, Qualcomm, etc.


 

Michelle Donegan
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Michelle Donegan,
User Rank: Light Beer
12/5/2012 | 5:17:58 PM
re: LTE Patent Pools: Two's a Crowd


Thanks, Roger. 


One of the differences between these two patent pools, then, is that Sisvel actually owns some of the patents in its pool -- the ones it acquired from Nokia. 


What's the likelihood that Via and Sisvel will eventually combine their patent pools? 

RogerVia
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RogerVia,
User Rank: Light Beer
12/5/2012 | 5:17:58 PM
re: LTE Patent Pools: Two's a Crowd

Roger Ross, President of Via Licensing here. Michelle is right about what is different now - we have created a patent pool that benefits the market by working with a broad representation of the industry (manufacturers, carriers, and inventors).

 

Since Via does not own patents, we avoid any bias and are in the best position to balance the interest of licensors and licensees allowing us to bring a RAND offering to the market.

 

The pool has launched with a compelling list of participants and simplifies access to essential IP (patents you must have rights to in order to build LTE products) with a single non-discriminatory agreement from Via. Of course, the more patent owners that chose to participate in the pool, the greater the benefit, but that does not diminish the fact that a patent pool such as the Via LTE pool is a tremendous benefit for LTE implementers. Reducing 10 patent licensing transactions (or more) to one is a significant savings of time and money even if there are companies whose essential patents must be resolved outside of the pool. 

 

The good news is that more companies with essential LTE patents will join the pool over time, creating greater efficiencies and setting a benchmark for LTE essential patent licensing which will influence litigation outcomes or bilateral negotiations. This will lead to more compliance with RAND obligations and reduced litigation which will lower the costs for LTE implementers and ultimately consumers. 

 

We believe that a single patent pool is best for the industry and consider what we have today to be a significant step towards achieving that goal. We look forward to sharing additional progress in the near future.   

RogerVia
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RogerVia,
User Rank: Light Beer
12/5/2012 | 5:17:56 PM
re: LTE Patent Pools: Two's a Crowd




Great question Michelle. We believe that ultimately Via’s program will be the sole LTE patent pool. Via’s program is open to all licensors including the companies participating in Sisvel’s program and we welcome them to join. If the licensors in Sisvel’s program were to join Via’s pool, then licensees would only need a license from the Via patent pool.  Since there is a possibility that one or more of the patents Sisvel acquired from Nokia may be LTE essential patents, they could join as well.  Because Via does not own patents, we remain unbiased in our ability to balance the needs of patent owners and LTE product implementers and ensure RAND licensing of LTE essential patents.

Licensees will benefit from this consolidation because they will have access to the necessary patents at a single price through a single transaction.

 

 




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