ITU-NGMN Joint Conference on “Licensing practices in 5G industry segments"

IPR, Licensing and royalties are always an interesting topic. In the end they decide what price a device would be sold at. If I put it simply, the cost of device = cost of manufacturing + marketing + sales and distribution + support and insurance + profit + IPR. The licensing cost is often added in the end as it could be applicable on the selling price of the device.

Ericsson willing to halve its royalty rate for 5G smartphones to $2.50 per device from $5 to accommodate needs of markets such as India, Nokia likely to charge $3.50 royalty per 5G handset, while Qualcomm will charge up to $16.25 in royalties. #IPR #Patenthttps://t.co/cgZQbiwFft

— Zahid Ghadialy (@zahidtg) January 19, 2019

The above tweet is interesting as it lists out the IPR costs by major patent holders. I wrote a post earlier detailing the 5G patent holders here. Since then this have moved on significantly. In addition to the royalty charged by the 5G patent holders (it also includes legacy technologies like 2G, 3G, 4G &Wi-Fi), there are patents for messaging, Codecs (seperate for audio / video), etc. To be fair it's a complex process. This is why I sometimes get shocked when I see 4G smartphones selling for £20 ($25).

Coming back to the conference, all the presentations are available on ITU page here.

Sylvia Lu, who wears many different hats including one for CW, UK5G and uBlox and a friend of 3G4G blog was one of the speakers at this conference. Here is a tweet on what she had to say about this event:

Beyond the hype is the licensing practices to ensure 5G adoption is FRAND and work for the new 5G ecosystem incl. the verticals for 5G to scale. Many thanks for the invitation @NGMN_Alliance @itu Delight to present on behalf of @ublox@UK_5G @cambwireless https://t.co/sjwZzkN2dD pic.twitter.com/kNtjPSuKzi

— Sylvia Lu (@SylviaLuUk) January 31, 2019

For those who may not know, FRAND stands for Fair, Reasonable, And Non-Discriminatory. Wikipedia has a nice article explaining it here.

NGMN Press Release on this conference mentions the following:

The Next Generation Mobile Networks (NGMN) Alliance has jointly organised and executed a successful conference on Licensing Practices in 5G Industry Segments with the International Telecommunication Union (ITU), bringing various experts from around the world together to discuss licensing practices and challenges of 5G.

The conference featured moderators and speakers from some of the biggest names in telecoms, including AT&T, Deutsche Telekom, NTT DOCOMO, Orange, Ericsson, Nokia and Microsoft. Also in attendance were key stakeholders of vertical industries, including Audi, Bosch, Panasonic and u-Blox, and patent pool administrators, namely Avanci, MPEG-LA, Sisvel and Via Licensing, who co-sponsored the event, the European Telecommunications Standards Institute (ETSI), the Japanese and the European Patent Offices, and the European Commission.

Focusing on the development of 5G and the Internet of Things (IoT), the conference facilitated sharing and discussing of present-day licensing practices and related issues across different industry segments.

A host of insightful sessions took place igniting an inclusive exchange on:

• Patent licensing practices with interactive discussions that focused on issues stakeholders need to be aware of.
• Sharing licensors’, licensees’ and pool administrators’ requirements on patent pools/platforms.
• Identifying proposed practices and conducts for licensors and licensees.
• Listing requirements for increasing transparency and assessing essentiality of Standard Essential Patents declared to Standards Developing Organisations.

“It’s great to notice that our joint ITU-NGMN conference has been such a success,” said Dr. Peter Meissner, CEO of NGMN. “Obviously, the 5G Eco-System is different. New use cases beyond mobile broadband - like massive IoT as well as highly demanding requirements from vertical industries on low latency, ultra-high reliability and security - are causing substantial network transformations. All these challenges have implications on the intellectual property of mobile network operators and across the different industry segments. Conferences like this are key in identifying IPR issues and exploring solutions for the enlarged eco-system.”

If you have any insights on this topic, or just any comment in general, feel free to add them as comments below.

Related Article:

• Analyst Angle: R&D to patents —The complex nature of 3GPP and standards By Dimitris Mavrakis, Research Director, ABI Research - RCR Wireless

The Importance of License Exempt Frequency Bands

Some of you may be aware that I am also a Technical Programme Manager with the UK Spectrum Policy Forum. Recently we published a whitepaper that we had commissioned to Plum consulting on "Future use of Licence Exempt Radio Spectrum". It is an interested read not only for spectrum experts but also for people trying to understand the complex world of spectrum.

The report is very well written. Here are a few extracts in purple:

Licence exempt frequency bands are those that can be used by certain applications without the need for prior authorisation or an individual right of use. This does not mean that they are not subject to regulation – use must still comply with pre-defined technical rules to minimise the risk of interference. Most licence exempt bands are harmonised throughout Europe and are shared with other services or applications, such as radars or industrial, scientific and medical (ISM) equipment. Wi-Fi and Bluetooth are probably the most familiar examples of mass-market licence exempt wireless applications, but the bands support many other consumer devices, such as cordless phones, doorbells, car key fobs, central heating controllers, baby monitors and intruder alarms. Looking to the future, licence exempt bands are likely to be a key enabler of wireless machine to machine (M2M) communication applications.

Key benefits of licence exempt bands include:

• For end-users:
• Greater convenience and flexibility by avoiding the need for lengthy runs of cable in home and work environments
• Ability to connect mobile devices to a fixed broadband network, reducing dependence on the mobile network and potentially saving costs both for the service provider and the end-user
• Enhanced convenience, safety and security, e.g. through installation of low cost wireless alarm systems or ability to unlock vehicles remotely rather than fumbling with keys

• For equipment vendors and operators:
• Facilitating market entry – there is no need to acquire a licence to deploy a service
• Enabling niche applications or services to be addressed quickly and cheaply using existing technology and spectrum – this has been particularly effective in serving new machine to machine (M2M) applications in areas such as health, transport and home automation.
• Providing certainty about spectrum access – there is no need to compete or pay for spectrum access (though the collective nature of spectrum use means quality of service cannot be guaranteed)
• The ability to extend the reach of fixed communication networks, by providing wireless local area connectivity in homes, businesses and at public traffic hotspots.

The two most notable drawbacks are the inability to guarantee quality of service and the more limited geographic range that is typically available (reflecting the lower power limits that apply to these bands). Licence exempt wireless applications cannot claim protection from interference arising from other users or radio services. They operate in shared frequency bands and must not themselves cause harmful interference to other radio services.

From a regulator’s perspective, licence exempt bands can be more problematic than licensed bands in terms of refarming spectrum, since it is difficult to prevent the continued deployment of legacy equipment in the bands or to monitor effectively their utilisation. There is also generally no control over numbers and / or location of devices, which can make sharing difficult and limits the amount of spectrum that can be used in this way.

In Europe, regulation of licence exempt bands is primarily dealt with at an international level by European institutions. Most bands are fully harmonised, whereby free circulation of devices that comply with the relevant standards is effectively mandated throughout the EU. However some bands are subject to “soft” harmonisation, where the frequency limits and technical characteristics are harmonised but adoption of the band is left to national administrations to decide.

A key recommendation, which I think would be very interesting and useful would be: Promote further international harmonisation of licence exempt bands, in particular the recently identified 870 – 876 MHz and 915 – 921 MHz band that are likely to be critical for supporting future M2M demand growth in Europe.

Note that a similar sub-1GHz band has been recommended for 5G for M2M/IoT. The advantage for low frequencies is that the coverage area is very large, suitable for devices with low date rates. Depending on how the final 5G would be positioned, it may well use the license exempt bands, similar to the LAA/LTE-U kind of approach maybe.

The whitepaper is embedded below and is available to download from here:

Sisvel's LTE Patent Pool

One of the things I wanted to blog from the LTE World Summit was the new Patent Pool by Sisvel. In past I have blogged about the patent pool initiatives from Via Licensing Corp. and MPEG LLA LLC.

Based on Sisvel's presentation, they have the most number of companies in their pool which will make them the dominant pool and give the required clout to negotiate licensing fees.

The following is from PC World Magazine:

Typically, patent pools are managed by specialized companies that don't own intellectual property themselves. They set up licensing programs, collect license fees and distribute the proceeds to member companies. In the case of LTE, three of these -- Sisvel, Via Licensing and MPEG LA -- are vying to form a pool that represents a critical mass of LTE patents.

Sisvel, an Italian company that also operates a patent pool for MPEG audio technology, this week claimed it had brought together 32 significant LTE patent holders, the largest number of any of the three patent-pool companies. "With the kind of scale that we're talking about here ... the pool could really be close to a one-stop shop," said Sean Corey, IP counsel for Sisvel US.

Meanwhile, MPEG LA says about 15 companies are working with its pool program, but added that they include some of the major players in terms of patents and market share. "There's a critical mass there," said Bill Geary, vice president of business development at MPEG LA. Via Licensing says 24 patent holders were actively discussing licensing terms and conditions at its last meeting of stakeholders, he said.

Formation of the pools is still at an early stage, with none of them yet operating and no patent holders publicly announcing their affiliations. But while all three say they are months away from operation, Via claims it has the most aggressive program. After kicking it off in January, the company could get its patent pool running in as little as 12 months, said John Ehler, Via Licensing's director of wireless programs. MPEG LA has been working on its own pool for about two years and hopes to have it in operation next year, Geary said. Sisvel's Corey said it takes between 18 months and two years to get a program going.

All three companies want to have the biggest pool, to make it easy for vendors large and small to license everything they need. In this way, patent pooling should help to accelerate adoption of LTE, the patent-pool promoters said. It could also attract a broader range of companies, such as consumer electronics makers and embedded device manufacturers, to the fast networks.

Patent pools are likely to have a bigger impact on embedded devices than on smartphones, according to Robert Syputa, an analyst at research company Maravedis. The market for machine-to-machine radio devices such as smart electrical meters is more price-sensitive than for mobile data products that consumers use, he said. Easier licensing may also draw in a wider range of vendors of such products, he said.

It's important to get pools organized early in the adoption cycle of a technology, Syputa said. If the commercial marketplace advances too far, too much intellectual property may become locked up in one-on-one licensing agreements between companies, he said. This happened with 3G, but with LTE, patent holders still have time to do it right, he said.

At least one important LTE patent holder, Ericsson, has said it will only sign bilateral license deals. Having three pool efforts in progress seems to complicate matters where just a single sanctioned one might be preferable, Syputa said. But even three pools would be preferable to a series of individual agreements, he said.

The IPR battle is not simple and straightforward as mentioned above. The following is from Daily Wireless Blog:

Qualcomm and its GSM technology counterpart InterDigital together control 40% of the LTE patent pool, with 19% and 21% of total patents, respectively, says Informa. Most LTE supporters want the royalty bill to be a one percentage of the sale price in an LTE handset, but IPR owners appear to be pushing it closer to 5% – similar to Qualcomm’s IPR tab.

Ericsson, the world’s largest wireless infrastructure manufacturer, claims to have 25 percent of the essential patents to Long Term Evolution (LTE) networks, making the vendor the single largest IPR hold in LTE. Most of the huge IPR holders in W-CDMA – Qualcomm, Nokia, Ericsson and InterDigital – are also claiming a big share of the LTE patent base.

Ericsson claims contradict a survey from Informa regarding essential IPR holders. Informa estimates Ericsson is much lower in the IPR ranking, behind Qualcomm, InterDigital, Samsung and Huawei in total patents, with emerging vendors such as Huawei also contributing 4G development research.

Ericsson believes it holds nearly 24 percent of awarded essential patents for LTE. Informa estimated that Ericsson holds about 7 percent.

Unlike Qualcomm – which by almost everyone’s calculations remains the leader in essential IPR – Ericsson is favouring a patent pool approach, which would set the total royalty rate for combined patents at under 10%, says Caroline Gabriel.

You may also want to check this (nearly) latest presentation from Alex Lee on LTE patents, embedded below:

LTE Patents for Commercial Products 2Q 2010

View more presentations from Alex Lee.

LTE and 4G IPR

The other day I heard from Alex GeunHo Lee about his new blog related to 4G technologies IPR. Alex has got extensive experience in IPR and patent related issues and I am sure his blog will be very useful for everyone.

Couple of Alex's presentations are embedded below which I am sure many would find interesting.

LTE Essential Patents Landscape 2009 2Q

4G Key Technologies Patent Landscape 2Q 2009

New LTE Patent Pool attempt

Via Licensing Corp. is looking to administer a patent pool for companies and research institutes claiming to have Intellectual Property for the emerging fast date rate cellular technology Long Term Evolution (LTE).

Last April a group of equipment vendors and handset makers already teamed up to craft a licensing framework for the fourth-generation mobile standard that is based on the 3G Partnership Project's (3GPP) E-UTRA Series 36, release 8 specifications.

The equipment vendors and handset makers that teamed up in April 2008 to establish rules for licensing patents related to the technology included Nokia, Nokia Siemens Networks, NextWave Wireless, Alcatel-Lucent, Sony Ericsson, NEC and Ericsson. They decided to push for "fair and reasonable" licensing terms for the patents related to the so-called 4G wireless network technology.

MPEG LA LLC (Denver, Colo.), the organization set up to administer access to MPEG patents, but which has also branched out into other sectors, has also started working on a patent pool for LTE and has said that several companies have already shown interest in participating in its pooling efforts.

MPEG LA, LLC recently announced that it has made significant progress working with a group of interested companies to facilitate creation of a joint patent pool license for the Long Term Evolution (LTE) Standard for mobile telecommunications. MPEG LA’s efforts, started last year, have been directed toward educating the market about the benefits of a pool license to address the patent thicket around this next generation wireless technology and assist the market with its adoption.

“The market is ready, and we are proud that industry leading companies have invited us to facilitate creation of an LTE pool license,” said MPEG LA President and CEO Larry Horn. “Given the history of telecommunications patent pools, MPEG LA has taken the time to consult directly with mobile network operators, network equipment manufacturers and mobile handset companies regarding the benefits of a patent pool for LTE, and they have encouraged MPEG LA to move forward with this effort. We are pleased by their vote of confidence. Next generation wireless technology, with its multifunctional capabilities, begs for a patent pool licensing alternative to make its full potential available to consumers worldwide, and MPEG LA’s success in creating large pool licenses uniquely positions us to achieve it.”

Via already administers patent pools for a number of technologies, notably in the broadcast, audio and wireless space, including those for MPEG2, 802.11 based Wi-Fi and near field communications (NFC). The company is a spin-out from Dolby Laboratories Inc.

Via can’t force patent holders to play, and without a majority of solid patents with which to negotiate, its attempts will fail. There’s little reason for a larger company to join a patent pool, unless it wants to help push through a standard, which isn’t the case with LTE.

Patent pools have become increasingly popular in recent years to handle licensing in cases of relatively large numbers of patent holders and licensors. The pools can help lower transaction costs and reduce uncertainty and time spent negotiating deals, sometimes with competitors across barriers of language and geography.

Generally, the cost of intellectual property associated with cell phone radio standards has been far higher than devices based on open standards such as Wi-Fi or WiMAX. That means that devices with cellular radios have been more expensive, as have the network equipment costs. I doubt industry players — including Qualcomm, which own LTE patents — are going to be eager to reduce their potential royalty income in exchange for letting Via manage the licensing process. Especially since folks at many of these firms already have the staff and knowledge to handle cross-licensing agreements.