Patent pools have been tried so many times in the cellular world that it seems unlikely they will ever take off. In the early days of LTE, there were no fewer than three different 4G pools, but none of them gained much traction, because they did not attract enough of the companies which control the lion’s share of the patents. For 5G, a new approach to IPR licensing seems inevitable (although some people said that about 4G), but it may rely more on open source norms converging with reinterpreted FRAND (fair reasonable and non-discriminatory) rules, as used by standards organizations like ETSI.
Undeterred, one of those 4G patent pool operators is still soldiering on. VIA Licensing, a subsidiary of Dolby, operates several successful patent pools, and even its LTE effort was bolstered a couple of years ago when Google joined, armed with the patents its acquired along with Motorola Mobility (and which it kept when it sold Motorola on to Lenovo). However, all went quiet after that, but now VIA is announcing three new members and insisting that its pool still has momentum even without the participation of key IPR holders like Qualcomm.
The new sign-ups are Lenovo, Verizon and Conversant Wireless Licensing.
Conversant Wireless Licensing is a subsidiary of Conversant Intellectual Property Management. It is interesting because it is one of the IPR licensing firms which now owns and manages some of the patents originally filed by Nokia. Nokia has come in for criticism, and lawsuits, alleging it uses these arms-length arrangements to engage in patent ‘troll’ habits which it would not get away with within its own organization, because of uncompetitive behavior concerns.
Now that all the standards-essential LTE patents owned by Conversant are included in a VIA LTE patent pool licence, which offers them to others on FRAND (fair, reasonable, and non-discriminatory), some of those concerns about Nokia may be allayed, at least with regard to this particular IPR.
“The efficiency and transparency of VIA’s LTE pool offers a tremendous advantage to both licensees and licensors,” said Boris Teksler, CEO of Conversant. “We look forward to working with VIA to bring more certainty to the LTE ecosystem. We trust that willing licensees will seize this opportunity to secure licences from VIA, and that other LTE-essential patent holders will add their patents to the VIA pool for licensing.”
As for Lenovo – owner of those Motorola handsets, if not most of its patents – it is joining the VIA pool both as a licensee and a licensor. Joe Siino, president of VIA Licensing, rather pointedly referred to concerns about China’s approach to global standards-essential IPR, now companies like ZTE and Huawei have so many patents. Perhaps VIA’s greatest coup was to sign up ZTE, in the early days of its LTE activity.
“By joining VIA’s LTE pool, Lenovo enjoys streamlined and cost-effective access to essential LTE and LTE-Advanced patents while also promoting a fair market for LTE-essential patents in China and throughout the world,” Siino said in a statement.
Finally, Verizon has added its own standards-essential LTE patents to the pool, though few details of its participation were revealed. It joins other operator members such as AT&T, China Mobile, Deutsche Telekom, KDDI, NTT Docomo, SK Telecom, Telecom Italia and Telefonica.
The pool does seem to have gained a new lease of life, though this may be another false dawn like the one in 2015, when Google signed up (which may have been partly a tactical move as the firm was still embroiled in litigation regarding some of its Motorola inheritance). VIA has certainly been the most successful of the three attempts to get away from the secretive bilateral deals which characterize cellular licensing deals. But despite its strong list of members, it still does not have the top three equipment vendors, all major IPR holders, nor Qualcomm, still king of 3GPP modem standards patents.
At the time the pool was formed in 2012, Luigi Licciardi, head of technology planning at Telecom Italia, issued an apposite warning, saying: “At least 50% of the patents in an area are needed to make a patent pool succeed, and there needs to be just one patent pool in a given area.”
VIA was one of three organizations which proposed LTE patent pools in 2012, hoping to become the major force behind 4G licensing. The other two, administered by MPEG LA and Sisvel, gained less momentum than VIA’s, which was particularly strong among operators – which have a keen interest in a more open approach to technology and licensing, to help drive down their costs. They are also keen to see more small vendors taking part in the supply chain to boost competition and reduce the power of the big four – hence their enthusiasm about Facebook Telecom Infra Project and similar initiatives – and a patent pool can reduce the risk to smaller firms or non-IPR owners, of creating products for 4G and then being sued for breaching a patent which had not been declared in the standard.
By contrast with bilateral haggling, a pool establishes a common framework and royalties structure for everyone licensing a given patent which is standards-esssential, with a flat rate for access. That would help to implement practices such as Frand (several investigations in Europe and the US have been looking at how major vendors may be bypassing Frand and manipulating IPR for unfair competitive advantage).
“Without overstating it, the essential patents are those that are necessarily infringed by the implementation of LTE,” said VIA when the pool was set up. “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.”
But has VIA missed its moment, now 5G is on the horizon?
It is clear that, if 5G is to achieve its medium term goal of supporting millions of low power devices, costs will have to fall. It is also clear that many of the patent holders in 5G, least in the radio, are the same huge vendors which control the 4G pile (though with far more Chinese involvement). Where pools and open licensing systems have worked best has been, unsurprisingly, where IPR was distributed among many players fairly evenly, and where those players had more incentive to license their technology cheaply or freely, in order to stimulate uptake, than to turn it into a lucrative revenue stream in its own right. In other words, the whole structure of the mobile device industry needs to change before there will be a radical new IPR framework, and while that may emerge for 5G, it will need to look beyond a patent pool system which is already looking outdated.