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.