Google has announced a patent pool for Android, attempting to avoid the legal disputes which have plagued the smartphone industry in recent years. This can be seen as opening yet another front against Apple, which initiated many of the lawsuits of the last decade, but is now under pressure from legal actions by patent giants like Nokia.
However, it is also another step towards a broader rethink of the IPR licensing system which governs the mobile industry, and a recognition that the current system is broken, and will be entirely unworkable in the Internet of Things, with its huge numbers of low cost devices.
The mobile industry has resisted the death of its secretive system of bilateral patents licensing deals to the last. The approach has survived well past its sell-by date, given that it puts most power and financial advantage in the hands of radio technology developers – but the radio itself is an increasingly small part of the total value of a mobile device. Software and operating system patents, and even designs such as Apple’s curved corners, have become critical to companies’ differentiation, and the subject of hotly contested legal battles, such as the marathon fight between Apple and Samsung.
The real breaking point comes with the IoT, whose devices cannot be subject to the same royalties bills as smartphones. If each patent holder still insists on its own fees and its own deals, the economics of low cost, mass market products cannot work. One of the factors which has enabled WiFi to achieve huge penetration via low cost, commoditized devices is a more open licensing environment, while most cellular smartphones still have price tags of $100 or far more and need payment plans or operator subsidies to achieve volume.
The situation will be even more critical with the IoT, and so companies which have driven the traditional mobile licensing structures now seek to put themselves at the heart of the new-look approach. Ericsson, in particular, has been active in this regard, setting up its IoT-oriented patent pool, Avanci, last month and attracting the ultimate IPR holder, Qualcomm, to join.
Ranged against the old-style cellular giants has been Google, trying to import its open source habits from Silicon Valley to the mobile world. It has been a long battle. Google began somewhat naively, arguing that it did not need patents, and quickly found its Android partners under litigation siege from Apple and Microsoft. The firm acquired itself a significant mobile patent mountain so that it could participate in the IPR arms race, or at least support key partners like Samsung. But this approach goes against the grain for Google, which has also worked to drive standards and enhance its own influence via the open source movements – with Android, Thread, Chromium, Fuchsia OS, Kubernetes and many more.
But of course, open sourcing a technology does not protect all the licensees from patent attacks, as the history of Android lawsuits has proved. So a patent pool can provide a middle ground between closed and fully open frameworks, and is one reason why the MPEG LA pooled technologies continue to maintain their ground against open source challengers, for instance.
The somewhat belated attempt to create an Android patent pool – when the worst of the smartphone IPR wars are over – centers on an alliance called PAX (or more prosaically, the Android Networked Cross-License Agreement), which has already attracted support from Samsung, LG, Foxconn Technology Group, HMD Global (which now produces the Nokia-branded Android handsets), HTC, Coolpad, BQ and Allview. The have agreed to grant each other royalty-free patent licences covering Android and Google applications on qualified devices.
Together, these companies own more than 230,000 patents worldwide, and the alliance is open to others joining. Google said it expects PAX, as the name suggests, to “promote patent peace” so that Android ecosystem members are protected from legal attacks and can invest their resources in innovation rather than lawyers.
The presence of HMD and Foxconn highlights how the device landscape is changing – and this will be even more marked in the IoT. Both these companies license well-known brands such as Nokia, while Nokia itself no longer makes handsets directly. There will be new players and new economics as mobile devices commoditize, and also a rising participation by Chinese companies like Coolpad.
The pool is open to any other Android players, and it is free, though there is no obligation to join.
In this way it differs from the Android Open Handset Alliance, which does not concern itself with patents, but governs the terms and conditions for vendors which decide to implement the full official Android platform and brand (rather than just the open source code). Google has run into controversy, and even accusations of antitrust, because OHA membership entails having to include some of Google’s own services in devices.
The new initiative is, therefore, far less prescriptive, and could include companies which just use Android source code but are not OHA members. However, it could still be subject to negative interpretation – that Google is trying to force innovators to surrender their IPR (though of course, the search giant itself is by far the biggest investor in Android development); or that companies which fail to sign up may be targets for litigation.