Via makes progress with LTE patent pool
There have been calls for a patent pool for LTE for several years, and these have only gained urgency amid the current destructive court battles over standards-essential IPR.
However, efforts by organizations like Via Licensing, MPEG LA and Sisvel have always come up against the hostility of major mobile players such as Ericsson and Qualcomm, and there are few signs that the latest bid, by Via, will have better success.
Via has signed AT&T, Clearwire and eight other supporters for its fledgling pool and hopes these will entice others to join, especially those concerned about the uneven balance of power in LTE patent armories, and the secretiveness of the current system of bilateral cross-licensing deals.
The 10 backers have agreed to lend key LTE-related intellectual property to the pool, which will be administered by Via, combining essential patents under a single license and avoiding a string of individual negotiations.
Importantly, several of the Asian operators which are also significant innovators and IPR holders have signed up – NTT DoCoMo and KDDI of Japan, and SKT of Korea, along with Telecom Italia and Telefonica. However, there is a shortage of key vendors, which tend to invest most in technology R&D and therefore amass large patent holdings.
ZTE, which has a rapidly growing portfolio, is included, along with Hewlett-Packard, but no Ericsson, Huawei, Qualcomm, Nokia or Samsung. These five are among the largest holders of essential IPR in mobile standards so any pool will be meaningless without at least some of them joining. (The tenth member is DTVG Licensing).
Roger Roth, president of Via Licensing, insisted that other LTE suppliers were poised to join, and if they do, a pool approach can certainly reduce the risk, to smaller firms or non-IPR owners, of creating products for 4G without being attacked in court down the road.
International bodies such as ETSI have been seeking the same protection by insisting that essential patent holdings in standards are declared upfront, and are always licensed according to FRAND (fair reasonable and non-discriminatory) principles. Accusations of breaching FRAND rules lie at the heart of several of the ongoing lawsuits between Android firms and Apple or Microsoft, as well as EU probes into Samsung and others.
“Without overstating it, the essential patents are those that are necessarily infringed by the implementation of LTE,” said Roth in an interview. “All of the litigation I can think of that's out there involves at some level multiple essential patents. When you resolve that, you're saying you're free to implement LTE.”
“An LTE patent pool is a great step towards increasing the predictability and transparency of IPR for the telecommunications industry,” said ZTE‘s general counsel Guo Xiaoming in a statement.
Two other organizations, MPEG LA and Sisvel, have also been working on LTE patent pools. The former has yet to announce any developments, though it has huge experience of administering pools in many technology areas, such as H.264. Sisvel recently purchased a group of patents from Nokia so may take a different licensing approach.
Via had previously worked with the Open Patent Alliance to form a pool program for essential Wimax patents but this faded away, mainly because, as Roth put it, by the time there was concrete progress, “there was not much of a market to go to at that point.”
The issue is getting critical, as LTE network multiply and royalties from the underlying technologies could quadruple between 2012 and 2017 to reach $6 billion, according to ABI Research. The firm says the balance of IPR power could shift against Apple at the LTE stage because of rival Samsung‘s extensive holdings in 4G.
However, as research director Phil Solis pointed out: “The only problem is that mobile technology patents for LTE are subject to FRAND rules,” he said.