Patent licensing is one of the biggest minefields in the wireless industry, and take-up of a new technology can be slowed by nervousness about undisclosed patent holders leaping out of the woodwork, or by lengthy and even litigious licensing disputes. The industry is starting to devise new licensing frameworks, such as that for LTE, created in April, or the Open Patent Alliance for WiMAX. There is also the patent pools approach, but like frameworks, these are only effective if the bulk of IPR holders sign up. There is a rising demand for standards bodies to insist on upfront declaration of IPR and then to work with patent pools, rather than just issuing general guidelines on ‘reasonable and non-discriminatory’ licensing. Now the IEEE, home of WiMAX and Wi-Fi base standards, has set the pace by striking a two-year deal with Via Licensing, one of the most prominent patent pool administrators.
The agreement will create one or more patent pools for key IEEE communications standards, though Via says that only about a dozen of these standards carry sufficiently large numbers of patents to need a pool. The standards group believes this will help drive its specifications into the market more quickly because vendors will have greater confidence that IPR licensing will be fair and patents declared upfront before standards find their way into commercial products. Edward Rashba, head of new business ventures at the IEEE, said the move was the result of demands from about 132 members who joined the body as part of a corporate membership program initiated in 2003. “What we’ve been hearing is a desire to address needs beyond the publication of standards,’ he said.
Via already manages a patent pool for Wi-Fi, which was set up in 2004. Its pools, which now cover eight standards, bring together patent holders in a unified system that streamlines the process of licensing and collecting royalties. A subsidiary of Dolby Laboratories, Via has formed similar groups for the MPEG 2, MPEG 4 and H.264 consumer electronics standards. The objective is to cut down on destructive lawsuits between competing IPR holders, reducing litigation costs and time to market, since the group provides a one-stop shop for licenses, saving the holder having to get protection from each vendor individually, and reducing the time spent negotiating royalty agreements. For vendors, such a system reduces the fear of being sued when they launch products.
“The whole patent landscape is a complex one,” said Edward Rashba, director of new business ventures for the IEEE. “If you want to make a mobile phone there may be tens or more of bilateral agreements to sign.” The IEEE has 950 published specifications and 400 in the works.
The aim will be for the IEEE and Via to create a system that will enable patent pools to be established very soon after standards are finalized, but since participation will be voluntary, they will have to focus on educating members on the benefits of joining. As has been seen in some other standards where pools exist, the absence of one or more major IPR holders can significantly weaken the impact and drive up overall IPR costs. Via typically charges a transaction fee of about 10% for its services, some of which might be plowed back into the IEEE to cover the costs of education programs.
As well as IPR, the IEEE corporate members ‘ whose role is to represent the needs of the commercial industry with regards to standards and processes ‘ are also asking for product testing and certification programs, similar to those of industry bodies set up around de facto standards, like the USB Implementers Group or WiMAX Forum. The IEEE is studying these requests.
Other patent pool initiatives that have been established recently in the technology sector include Intellectual Ventures, RPX and Allied Security Trust, but the weight of the IEEE in terms of members and market presence of its standards should give this combination particularly strong potential to attract support.