Patents ownership in telecom is a murky affair. Even the experts can't sort which patents matter and which are fundamentally worthless, and standards bodies have kept the lights switched off. Macho posturing is consequently rife. Patent owners regularly crash about in the gloom, boasting about the size of their portfolios. China's Huawei, for instance, needs no encouragement to flaunt its big numbers.
Claims of technology leadership based on these raw figures always looked spurious, as Light Reading wrote in March. Now a leading telecom analyst has also cast aspersions on the data. Formerly a well-respected sell-side analyst for Nomura Securities, Richard Windsor today runs his own research business – Radio Free Mobile – and blogs about technology matters. In his view, size most definitely does not matter in 5G patents, and Huawei is far less impressive than it makes out.
Windsor takes aim, in particular, at a 2019 study by GreyB, a research company, which identifies Huawei, Samsung and LG as the real powerbrokers in 5G. Huawei not only holds more 5G-related patents than any other company (some 13,474), according to that study. It also holds a bigger share of standard-essential patents (or SEPs) – about 19% of them, to be precise, versus 15% for Samsung, 14% for LG, 12% for each of Nokia and Qualcomm and just 9% for Ericsson.
There is an obvious correlation between those two sets of numbers, and Windsor isn't convinced. GreyB's analysis is flawed, he reckons, in its definition of an SEP. Using an airplane as an analogy, he basically says there are two types of SEP – the one that keeps the plane flying and the one used for seats and drinks trolleys. Both are needed for the plane to "fulfil its function," he writes, but "the IP [intellectual property] for the engines, ailerons and wings is much more essential than the seats and drinks trolleys." Huawei's role in the seriously important area is probably overstated.
While it's a hard point to prove conclusively, there are some compelling signals. For one thing, if GreyB is right, both Huawei and Samsung would have had to leapfrog other companies in the patents league table during the transition from 4G to 5G. That's improbable, says Windsor, because 5G relies on a lot of the same "core" IP as 4G, including the OFDM (orthogonal frequency division multiplexing) coding system.
In his own words: "In the 4G patent count, Huawei and Samsung, in particular, have a much smaller share, raising the question of how they came from so far behind in a similar standard to lead 5G. One answer could be that they have developed IP that looks more like seats and drinks trolleys rather than engines and consequently their contribution is less valuable than it appears."
The other clue is in Qualcomm, which generates more in royalties per device than any other player and seems impossible to avoid. For evidence of that, take note of recent litigation between Apple and Qualcomm, when Apple was forced to give way. "The fact that it felt it had to use Qualcomm is a strong indication that when it comes to working product, Qualcomm (and I suspect Nokia and Ericsson) has a much stronger position in 5G than this study gives them credit for," writes Windsor.
It's a timely intervention by Windsor. The global 5G standard so dependent on Huawei's expertise may rupture if the US continues to treat the Chinese firm like a hi-tech villain, the company has recently suggested. "If further fragmentation were to take place, the whole industry would pay a terrible price," said Guo Ping, one of Huawei's rotating bosses, during a press conference in May. If Huawei is grandstanding about its 5G patents, as Windsor suspects, any threats about standards fragmentation could lose their venom.
Windsor is not the first person who has attempted to shine some light on the 5G patents situation. In 2019, legal experts at Bird & Bird compared several different studies used to support claims of Huawei's technology leadership. Many, they said, were "too simplistic," failing to distinguish between essential and non-essential patents. Determining what constitutes an SEP was another issue, according to the lawyers. Without the clarity the industry is either unwilling or unable to provide, the macho posturing is bound to continue.
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— Iain Morris, International Editor, Light Reading