A second patent pool is now open for business and touting licences to anyone making devices featuring next-gen mobile broadband LTE. It's hoped this will simplify the design process and make LTE devices cheaper, eventually. The new pool comes from Sisvel, which bought 350 essential telecommunications patents from Nokia earlier …
What fraction of the SEPs?
From their website, they have the LTE patents from:
Cassidian, an EADS company
China Academy of Telecommunication Technology
Electronics and Telecommunications Research Institute
but there's no estimate as to what portion of the SEPs are in that pool - for instance I can be fairly confident that Alcatel-Lucent, Motorola, (Sony-)Ericsson, Huawei, ZTE, Qualcomm and even Apple hold significant volumes of SEPs between them (I suspect the SEP list runs into the thousands of patents, probably not tens of thousands, though). I wouldn't be surprised if the 350 from Nokia outweigh all the rest that they already held. (You can search for SEPs here: http://ipr.etsi.org/SearchIPRD.aspx)
So, if they get more SEP holders involved will the price stay the same? If they get no more, and this represents (for example) 10% of the SEP requirements to implement LTE, is a further €9/device the designated FRAND rate for the entire suite? Or could it be higher and still be FRAND?
Do other SEP licensors have a %age per device (benefiting low cost devices rather than high end devices who would favour a fixed rate)?
> More damaging are patents owed by companies not signed up to FRAND and yet end up being "essential" to a communications standard - such as those owned by IPCom which continues to battle Nokia for licence fees.
And those owned by Motorola/Google which seems to be taking an interesting view of it's FRAND commitments.
Re: Joseph Lord
"An interesting view of it's FRAND commitments"?
Googorola made an offer of a licensing agreement, Apple sued instead of the defined escalation procedure of:
(b) arbitration procedure defined by the standards bodies
Whether the Googorola was a properly FRAND offer is moot - it was an "invitation to treat within the FRAND framework".
Re: Joseph Lord
Can you post a link to the 'arbitration procedure defined by the standards bodies"? Genuinely interested.
And what about Microsoft? They seem genuinely to want a license. [I'm not in any way an MS supporter but in this case they seem to be very much in the right.]
By definition if you have patents that you have pledge FRAND you cannot demand a percentage of the finished goods prices such that if all the other patent holders charged the same the licensing fees would total more than 100%. Also if it is FRAND then surely there should be published rates and licenses so that everyone can see the fair reasonable rates and knows that they are not being discriminated against.
Also cross license demands cannot be FRAND because they discriminate against those holding patents. An exception should probably be made for SEPs related to the same standard.
Re: Joseph Lord
Section 8.2 seems to have a stab at this, but I haven't searched very hard
Certainly this doc recommends it:
And ETSI will offer it (perhaps not requiring it, but I'm not going to go rummaging into their myriad policies/procedures documents) - perhaps I have overstated that bit (I got it through hearsay, I admit), but it seems more expensive to go into litigation than to go to arbitration.
The final question on this link says something about having to enter negotiation to use the standard:
As far as I'm aware, all cross-licensing demands get you is a change in the balance of payments for a patent pool by a fair and reasonable rate - seems fair to me, much like a part-exchange scheme for buying a car (without the shafting on second hand trade-in values that are de rigeur for car dealerships). The "base price" remains the same (or reasonably similar to), and the parties are free to negotiate them separately or to negotiate two deals (or more). Apple have come to the party with very little (yes, they bought Nortel but their pool isn't very big) so they've gone straight to the courts instead of negotiating.
Note that ETSI members do not have a duty to disclose within the Technical Body the commercial terms for licenses for which they have undertaken to grant licenses under FRAND terms and conditions.
As to MS "genuinely" wanting a license - I'm sure Apple do, too. But the expectations of a FRAND rate are not the same on both sides of the negotiating table.
Re: Joseph Lord
The expectations of a "FRAND rate" should be that everyone using the patents pay the same rate. Google/Motorola aren't doing that - certainly not with Apple where Apple used to be buying Qualcomm chips that had the 3G license already paid, until Motorola pulled Qualcomm's license only for chips purchased by Apple, and then hopes to collect far more per phone than Apple was previously paying (or any other Qualcomm customers pay) when paying per chip.
This isn't a matter of Apple refusing to pay - they had that cost built in until Motorola (before Google bought it) pulled the license specifically to try to screw Apple over and get more money from them. That's against the very basis of FRAND. Apple does a lot of bad things, but this is patent abuse that if it were upheld would have grave repercussions far beyond any damage it would do to Apple. Patent trolls everywhere would rejoice that they can suddenly get 10x more than that for the pooled patents they held that previously were previously never regarded as something they could use offensively.
Imagine holders of patents required for GPS suing automakers wanted 2.25% of the sales price of the car, rather than the (as an example) 2.25% of the sales price of the $5 GPS chip installed in the car. Think about how many other patents subject to FRAND might be used when building a car.
Re: Joseph Lord
Thanks for great attempt at serious and researched answer. I don't see the process as you described it earlier there (I don't see any procedure for would be licensees) although they clearly have the option to contact ETSI.
I'll look at the other links sometime but so far you haven't changed my view that Motorola is abusing its SEP.
Re: Joseph Lord
There's an interesting study here:
p70 has an interesting diagram on licensing rates for different technologies - although they don't explain it very well but is seems that it could be interpreted as:
a cross licensing agreement for GSM patents is typically 4% (of what, though, possibly unit cost)
Have a look at the ViaLicensing fees (for LTE), too:
This company licenses stuff from:
AT&T Intellectual Property II, L.P.
Clear Wireless LLC
Deutsche Telekom AG
DTVG Licensing, Inc.
SK Telecom Co., Ltd
Telecom Italia S.p.A.
Cross reference this to table 3-6 in the above report and I don't think that it's a huge pool to be licensing for the rates they are demanding.
On the whole, I'm not sure that the Googorola offer of 2.25% was outside FRAND scope (after all, one man's "Fair and Reasonable" is another man's "How much!?!?!") and the offer was still an opening negotiating point. Particularly as I think it refers to licensing *all* of Googorola's patents if this link is correct:
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