Patent pool can work in the 4G world

Can a patent pool work in an industry whose licensing regime has been dominated so long by bilateral agreements? Yung Hahn, president of the Open Patent Alliance, formed last year to create an IPR framework for WiMAX, believes so. And I'm beginning to agree with him, despite the fact that I've said in the past that all major stakeholders need to be involved to make it work.

Hahn makes a compelling argument. First of all, the 4G ecosystem--for both WiMAX and Long Term Evolution technologies--is drastically different than the 3G world. The vision for 4G is a plethora of ecosystems such as operators, PC makers and consumer electronics vendors coming together. Vendors in the 3G world are accustomed to bilateral agreements, but intellectual property rights licensing in the PC and consumer electronics worlds are typically done through a patent pool. Moreover, OFDM/OFDMA technology, the foundation of WiMAX and LTE, dates many decades back in various industries such as the television industry. As such, companies outside of the mobile industry also claim patents. (The OPA, by the way, believes its work in the WiMAX industry will be transferable to the LTE industry as well.)

"We aren't patent-pool bigots, and clearly it didn't work in 3G, but in the case of WiMAX, we have concluded that it will work and work well in combination with bilateral agreements," Hahn said in an interview.

Many of the major wireless vendors that plan on using bilateral agreements for WiMAX and LTE IPR don't plan to change their licensing structure much in the 4G world. Or, they have already announced their licensing plans. And if a group like the OPA, which issued a call for patents in conjunction with Via Licensing today, can gain a critical mass of licensees in the patent pool, that could create an environment that enables predictable IPR costs. Hahn said such critical mass could also give the court system an idea what is fair and reasonable.

It's not clear what that magic number of patents would be to create fair and reasonable pricing environment, but suffice to say that a 50-percent threshold would be a powerful percentage. Vendors like Alcatel-Lucent, Intel, Cisco, Samsung, Clearwire and Huawei are already a part of the OPA. Bringing PC makers and CE vendors into the fold has, in Hahn's words, taken longer than the OPA has liked. Acer is the only company representing the PC and CE vendor community to join the OPA so far. These companies' participation is key to changing the way WiMAX and LTE patents are applied. If the OPA can get these companies on board, this combo of bilateral agreements and a patent pool can really work. Hahn is hinting at another top PC player joining the OPA shortly.

This critical mass won't happen overnight, however. This project will be an ever-evolving process that will take plenty of time, education and patience. The effort may be complicated, at least on the LTE side, by a number of groups trying to create a patent pool for LTE. Last month, Sisvel, VIA Licensing and MPG LA called on companies claiming to hold patents essential to LTE to give them a call or send an email so they can evaluate the claims and create a patent program. This latest turn on the LTE field likely will confuse the LTE patent domain more than offer the cost clarity. But if the OPA can do most of the dirty work for the LTE industry, there's no reason why a patent pool can't work for LTE either.--Lynnette