Eager to further build its patent licensing business and help boost the Internet of Things (IoT) market, Ericsson is creating an independent body that will license standardized, patented technology from multiple contributing companies to any type of device manufacturer. (See Ericsson Develops Industry Patent Licensing Plan for IoT.)
The new company, which doesn't yet have a name, will be run by Kasim Alfalahi, currently Ericsson's Chief Intellectual Property Officer and Head of IPR & Licensing. He says he has been talking with other companies and regulators about the idea and that there is a lot of support for an independent entity that would license technology on behalf of patent holders on a revenue-share basis.
Ericsson, as you’d expect, is going to license its relevant patents through the new IoT patent market place, but Alfalahi couldn't currently name any other parties that have agreed to sign up.
Further details have also yet to be made available about the ownership structure of the new company, the exact nature of the "platform" that patent holders and licensees will engage with and exactly when it will launch, though it will happen in the near future and certainly this year, says Alfalahi. Ericsson believes that, currently, there is no other body offering this kind of IoT licensed technology marketplace currently.
In the meantime, Alfalahi is working on signing up other participants and developing the operational model, which "will make it simple, efficient and predictable for everyone to use," he states, adding that the pricing of the licenses will be scaled depending on how the technology will be used.
Ericsson has been making greater efforts in recent years to increase revenues from its intellectual property portfolio. In its most recent financial statement, the vendor noted that during the past five years it has "more than tripled [its] IPR licensing revenues." In 2015, Ericsson's IPR licensing revenues were 14.4 billion Swedish kronor (US$1.7 billion), up by 45% year-on-year.
The announcement of Ericsson's plans came only hours before its new best buddy, Cisco Systems Inc. (Nasdaq: CSCO), announced it plans to acquire IoT services specialist Jasper Wireless Inc. for $1.4 billion, so it's hard to imagine that Cisco won't be involved in this new venture. (See Cisco Looks to Jasper Acquisition to Transform Enterprises – & Itself, Cisco Buys IoT Cloud Provider Jasper for $1.4B and Cisco + Ericsson: From Soup to Nuts.)
— Ray Le Maistre, , Editor-in-Chief, Light Reading