Still not many big names in either Sisvel or Via's LTE pools
A month after US-based patent company Via Licensing announced it had launched an LTE patent pool, Sisvel has formally launched its own pool. The patent pool operator, which in 2011 bought 450 patents filed by Nokia, has announced that its pool will include patents from EADS, the China Academy of Telecommunication Technology, the Electronics and Telecommunications Research Institute (ESRI), France Telecom, TDF, and KPN, as well as the patents originally filed by Nokia that Sisvel acquired.
Sisvel said its pool license makes its current portfolio of essential LTE patents available under standard terms and conditions with a running royalty rate of 0.99 Euros per device.
"Sisvel's LTE pool represents tremendous value for licensees," Giustino de Sanctis, CEO of Sisvel International, said, "and it is a great opportunity for companies advocating lower aggregate royalty rates for the benefit of the LTE industry to advance that position by participating in this joint effort rather than undertaking individual license negotiations."
Two pools, will any of the big fish take the plunge?
So now there are two publiblcy launched patent pools, what can be determined about each, and how is the industry served by having two patent pools, neither of which yet include the likes of Qualcomm, Samsung, Huawei or many other major developers? MPEG LA has also said for a while that it intends to launch an LTE pool.
Notably, both publicly launched patent pools currently have carriers or, in Sisvel’s case, research institutes forming the bulk of their members. From the vendor side, Via has DirectTV, HP and ZTE, whilst Sisvel has its Nokia patents. Via’s patent pool contained 20 members at launch, including AT&T, Clearwire, Deutsche Telekom AG, DTVG Licensing, HP, KDDI Corporation, NTT DOCOMO, SK Telecom, Telecom Italia, Telefónica, and ZTE Corporation.
One difference between the two bodies is that Sisvel actually bought and paid for Nokia's patents in this area. So as well as operating the pool on behalf of other licensors, it owns some of the patents itself. Via was not shy in pointing out that in its view this presents a potential conflict of interest.
It said, in a written statement to Mobile Europe on 5 October 2012 (bold text is our own), that it was anticipating some other pools to emerge (not surprising as Sisvel has been developing its pool for some time) but that it didn't think a pool administrator should own patents within the pool.
We do expect some joint licensing programs around LTE, but not a true patent pool with an independent administratorlike Via that administers an open program and does not own any LTE essential patents. We believe the administrator of a true patent pool should not have any conflict of interest or bias that would be created by being a patent owner licensing their own essential patents alongside of, or in competition with, a licensing program that it administers.”
We put that allegation of conflict of interest to Sisvel, and received the following response from Sean Corey, IP Counsel, Sisvel US. The response doesn’t address front-on the question of Nokia patent ownership.
“The goal of any pool is to bring together as broad a portfolio of essential patents as possible and offer a single license for that portfolio. Sisvel's LTE pool will be entirely consistent with that goal and will benefit both patent owners and licensees by offering simplified access to patents that would otherwise require a series of separate negotiations and license agreements."
So are we set for consolidation around one or other pool? Via, for its part, recognised that having multiple pools might not be of benefit to the market and industry in general.
“As a general rule, markets supported by a single patent pool see greater benefits from the efficiencies of a patent pool compared to markets with multiple pool or pool-like efforts splintered across two or more administrators. [The Via patent pool] is a significant step towards achieving our goal of being the one-stop shop for essential LTE patents –bringing the benefits of transactional efficiencies to both licensors and licensees.”
But the most interesting aspect of LTE patent pools is what pond, if any, the big fish will jump into. At the moment, both pools look quite small, although that's not unusual at launch. Via said that it expects to announce other major names soon, adding that, like A-List stars making an entrance at an awards night, the big players don’t like to be the first to arrive on the red carpet.
“These 10 licensors are merely the beginning – we fully expect to add new members in the coming weeks.We already have significant patent holders in the pool and we are working with practically every other essential patent holder of significance. Some vendors don't like to be first to the party– they want to understand the terms and see who else is participating before they make the decision to "dive in." For many of those vendors, the launch of the program signifies an important inflection point as it shows that the pool is real and they will receive ROI on their essential patents when they join.”
One difference in LTE licensing, compared the the 3G environment, is that many of the major players have already cross-licensed technology. It may be that the pools remain the habitat of smaller players, and carriers, who can better monetise their technology by taking advantage of a greater entity.
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