IPR issues could haunt 4G, LTE, mobile WiMAX
Two reports on the intellectual property (IP) and patent rights associated with next generation mobile networks suggest the situation may pan out better than with existing networks, but both include important caveats.
According to Canadian group Maravedis Inc., in its "WiMAX/LTE 4G Intellectual Property Rights (IPR) Policy & Market Report", IPR problems and disputes for WiMAX and the Long Term Evolution (LTE) of the GSM/3G flavor of the technology as laid out by the 3G Partnership Project (3GPP), will be less onerous than that experienced in the cellular market "due to the processes and policies developed, as well as the maturity and cross-discipline diversity of technologies comprised in emerging systems."
Robert Syputa, Senior Analyst at Maravedis and author of the report said, "We can't underestimate the impact of IPR on WiMAX/LTE 4G Technology. By the end of the decade, we expect that up to $300 million will have been spent annually on IPR for WiMAX alone. The most successful companies focus R&D where they can benefit the most and leverage IPR. Unfortunately, many companies become so technology centric that they fail to align R&D with commercial success." Syputa said that an analysis of this sector was challenging because, while 3GPP and other emerging technologies had databases and analysis enabling the industry to understand the potential of the technology, no such tool was available for WiMAX/4G before.
The report also suggests that recent IPR trends, consolidation among smaller players and the entry of incumbent suppliers indicates further acquisitions by the larger players, such as Intel, Qualcomm, Samsung and Motorola, who will play a significant role in determining overall IPR costs in the WiMAX/LTE 4G market.
In addition, it suggests that Qualcomm's position in 802.16e is limited but presents a stronger position for technology advances that will impact 4G, and that Samsung owns the broadest field of OFDMA and related technologies used in WiMAX and LTE 4G.
Meanwhile, according to ABI Research, one of the major factors that has kept average royalty rates very high in W-CDMA devices is because 12 companies own 80 percent of the essential IP, with four of those holding nearly 60 percent. In order to access essential patents, device vendors not among that top four are subject to cumulative royalty rates that can climb to 28.5 percent.
Based on its recent analysis, which focuses on the handsets side of the business, ABI asserts that the 4G royalty landscape will be far more diverse, and this alone will allow average royalty rates in 4G devices to be lower than in their 3G equivalents. License trading will be more commonplace, especially in the WiMAX environment, where over 350 companies own essential IP.
Wireless research director Stuart Carlaw suggests, "A more diverse 4G IP landscape will allow more companies to trade licenses rather than be required to pay royalty fees to access others' IP. This will result in low average royalty rates."
ABI's study notes that, although the original motivation to choose OFDM-based technologies was to loosen Qualcomm's hold on the market, that company's acquisitions of Flarion and Airgo give it essential IP in all 4G technologies.
It adds that there could also be a case of "out of the frying pan and into the fire" regarding WiMAX, where it is likely that Samsung will hold close to 30 percent of the essential IP, effectively replacing Qualcomm as the 800-pound gorilla in the market.
Last week at the 3GSM World Congress, senior executives at Qualcomm, Texas Instruments, Marvell, Broadcom and Freescale all claimed stake to some IPR related to the emerging LTE. For instance, Sanjay Jha, COO of Qualcomm, told EE Times Europe "We have made significant contributions to the standards setting process, and possibly have the largest amount of IPR for LTE."
Marty Schroeder, associate VP and general manager at Marvell, noted, "A patents arms race has already begun."
Late last year, the trade association representing the interests of mobile phone operators, GSM Association (GSMA), urged industry to increase the transparency around IPR related to new technology standards.
In a hard hitting statement, the GSMA suggested standards bodies should follow the lead of ETSI—which is making significant changes to its policy and procedures to reduce the uncertainty surrounding iIPR.
ETSI has decided to strengthen its policy and is streamlining the declaration process. The standards body, based in Sophia Antopolis, France, is also introducing safeguards that will enable IPR holders to voluntarily declare the terms and conditions attached to their IPR ahead of the standardization of a new technology. ETSI has also declared that it will no longer be mandatory for the organization to select technologies purely on the basis of their technical merits and regardless of other considerations.
- John Walko
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