Will Via's LTE licensing pool stop the mobile patent wars? Don't hold your breath

Will Via's LTE licensing pool stop the mobile patent wars? Don't hold your breath

Summary: Patent pools only make sense for smaller players and companies that want to license patents, rather than the firms that hold huge patent portfolios. Via's LTE pool is a case in point: it's mostly users and hardly any suppliers.

SHARE:
3

With many people getting mightily sick of the endless mobile patent wars, the formation of Via Licensing's LTE patent pool may seem like a useful step.

After all, Via announced the move by saying it "significantly reduces the risk of litigation for those organisations that are building products or services based on the LTE standard".

Handy, you might think, when Samsung is threatening fresh lawsuits against Apple over the use of Samsung-held LTE patents in Apple's devices. With players agreeing to play nicely, surely the tit-for-tat phase of the last two years may be over?

Not in the slightest. Look at the list of companies involved in this patent pool: AT&T, Clearwire, DTVG Licensing, HP, KDDI, NTT Docomo, SK Telecom, Telecom Italia, Telefónica, and ZTE.

Seven are operators and one — DTVG — is a broadcaster subsidiary. So unless HP has a stack of LTE patents hidden in its pants, that leaves China's ZTE as the only company in the pool with a notable LTE portfolio of its own.

And which major LTE patent holders aren't in the group? LG, Qualcomm, Motorola (Google), Nokia, Ericsson, Huawei — and of course Apple and Samsung — all spring to mind.

What's in it for the licensors?

The problem with patent pools is that there is little to no impetus for major portfolio owners to take part. A one-stop shop for licensing benefits the licensees, not the licensors.

The problem with patent pools is that there is little to no impetus for major portfolio owners to take part

Some of the companies in Via's pool do have LTE patents of their own, so it's not as though there is no value to the grouping whatsoever. But, with the exception of ZTE, this is relatively low-level stuff we're talking about.

For an insider perspective, check out this presentation (PDF) by Qualcomm legal counsel Daniel Hermele, from earlier this year. In it, he points out that "firms with predominantly downstream commercial interests [such as operators] are likely to have different licensing objectives as compared to more-upstream technology providers".

He also notes that companies' priorities can "change quickly". In today's litigious landscape, that is something of an understatement. A patent that is a handy revenue-generating asset one day can easily become an essential weapon the next.

Negotiating case by case

I'm only using Qualcomm as an example now, but what such businesses want to do is to negotiate patent licensing on a company-by-company basis.

It's a method that allows them to extract more cash from companies that can afford it, and it also takes into account the fact that some of licensees may have different kinds of patents that the licensors may themselves want.

Perhaps Company X owns patents that have to do with, say, augmented reality. Qualcomm is getting into AR and owns lots of LTE patents — if Company X is a potential LTE patent licensee, why would Qualcomm want to give up its bargaining chip by allowing it to become part of Via's "one-stop shop"?

I'm not arguing in favour of the patent system, but rather just pointing out its realities. Two other licensing authorities (MPEG LA and Sisvel) are also working on LTE patent pools, and word on the street is that Sisvel's will pitch up in the coming months. I wouldn't expect that to solve the problem either.

These pools are simply not much use when the major players refuse to dive in.

Topics: Patents, 4G, Smartphones, Tablets

David Meyer

About David Meyer

David Meyer is a freelance technology journalist. He fell into journalism when he realised his musical career wouldn't pay the bills. David's main focus is on communications, as well as internet technologies, regulation and mobile devices.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

3 comments
Log in or register to join the discussion
  • If Patents Really Were An Incentive To Invent...

    ...then nobody would join a patent pool, because it means giving up your right to enforce your patent against other members of the pool--effectively, giving up your patent rights. Why wouldn't that kill the incentive to invent?

    So the fact that patent pools are seriously proposed as a good idea, shows that patents make no sense at all.
    ldo17
  • LTE Will Benefit from LTE Patent Pool -- Many incentives for Big Players

    Hi David,
    Roger Ross from Via Licensing here. As President of Via, I would like to clarify a few points from your article.

    First, and most importantly, this isn't the final makeup of the patent pool – it is just the beginning. We expect to announce additional LTE patent holders in the near-term, and continue to see companies joining over time. In fact, the patent pool was designed to accommodate the needs of both very large patent holder and patent holders with smaller LTE portfolios, including the companies you mentioned, an attractive and unique feature of the pool that will encourage growth.

    Second, we would argue that the pool delivers great value from the outset. The patents covered are all essential to the creation of any product or service using the LTE standard. As a result, any organization incorporating LTE into their product would, by necessity, have to establish licensing agreements with every participant in the pool – a process that could incur significant costs and protracted negotiations. We've reduced the number of those agreements from 10 to 1 and most companies would find that extremely beneficial, a benefit that will increase as other licensors join over time.

    Finally, we're fully aware this is not a "magic bullet." Not all patent holders will join the patent pool – it is limited to holders of technically essentially patents for the LTE standard, and some firms are simply not set up to embrace pool licensing. The pool is not designed to eliminate all litigation in the mobile industry, but “mobile patent wars” should not be waged over standards-based LTE technologies that allow devices to interoperate on the network. A patent pool is a proven approach that allows patent owners to provide fair access to essential patents in a peaceful (non-discriminatory) way.

    In short, Via Licensing’s LTE patent pool will most definitely reduce the risk of litigation and provide predictability around licensing LTE essential patents, which will reduce the time and cost to license technology essential to LTE. And that will, in turn, speed the development of new products while driving down their costs.

    We're open to talking further on this subject. Don't hesitate to contact us.

    Best,
    Roger
    Roger Ross
  • Article gets it wrong

    I disagree with the author's take. Via's patent pool might not accomplish much -- but not for the reasons he cites. See http://www.ipnav.com/blog/will-an-lte-patent-pool-help-stop-mobile-patent-wars/ for why I think so.
    IPNAV