Patent pools in the wireless space have not enjoyed much success, but the recent news that Lenovo, Verizon and Conversant have signed up as licensors in Via’s LTE pool suggests that, at the very least, this licensing collective for fourth generation mobile technology needs to be taken seriously. The three new members join a list of patent owners that already includes AT&T, China Mobile Communications Corporation, Google and NTT DOCOMO.
Lenovo has joined both as a licensee and licensor, and its decision to sign up follows Via’s announcement earlier this year that it was changing the royalty rates for the pool in a move that benefited newer market entrants such as those from India and China.
The greater flexibility in Via’s pricing structure (it has also introduced differential rates for its AAC pool for audio compression technology) was highlighted by Lenovo vice president of IP Ira Blumberg in a statement announcing the news. In his comments Blumberg spoke of Via’s ability to “recognise and flexibly address unique market circumstances applicable to China and other emerging markets”.
Offering different rates and other licensing terms in the Chinese market, where some players are far smaller than the global smartphone giants and operate with much tighter margins in the highly competitive local market, has received a lot of attention of late. Earlier this year, Xiaomi’s head of IP strategy Paul Lin told this blog that licensors need to understand that what is FRAND in the US and Europe may not be considered so in China. Via’s recent progress suggests that it has got the message.
While the announcement that Lenovo had joined Via’s licensing pool was arguably the most significant, given its position in the Chinese market, Conversant’s decision to join was also notable because it is the first NPE to sign up. The company, which hired Boris Teksler as its CEO late last year, has a portfolio of almost 2,000 wireless patents formerly owned by Nokia, that it acquired in 2011.
Teksler, who left his position as CEO of Unwired Planet in 2016 after it was acquired by Optis UP and was an adviser to Via prior to joining Conversant, identified increased transparency and predictability in the licensing process as one motivation for joining the LTE pool. He also claimed that “historically, pools worked well with various audio and video standards and it is time that they were made to work again”.
“Intrinsically cellular pools can be made viable and Via has both the critical mass and expertise to make it work,” he added. “They represent an even keeled approach between licensees and licensors.”
Via’s LTE pool has been on something of a roll all year. In January it appointed Taraneh Maghamé, formerly senior IP licensing, strategy and standards counsel at Apple, to lead its expansion. It also added a number of new members in the first six months including Taiwanese semiconductor company Mediatek and then in March announced the new LTE royalty rate structure.
Via’s list of patent owners is certainly impressive and with Google and Lenovo, the pool portfolio includes the former Motorola Mobility assets. It does not however include any of the big four wireless licensors — Qualcomm, Ericsson, Nokia and InterDigital — who are generally considered to own many of the highest quality patents in the sector. That quartet have rejected most attempts to collectively license their wireless IP although three of them — Qualcomm, Ericsson and InterDigital — were among the early backers of Avanci, the licensing platform for 2G, 3G and 4G technology in specific Internet of Things (IoT) verticals.
Via President Joe Siino rejected the notion that those mobile pioneers needed to join the LTE pool for it to be considered a success. He claimed that the pool’s combined portfolio was larger than any of those companies’ individual portfolios, before adding: “If the end state is that there are two or three companies that are licensing these assets, Via and a couple others, that’s still a dramatically simplified marketplace relative to having so many different holders and so many different licensing risks.”
With Via’s recent success and the emergence of the Marconi Group’s Avanci and Velos Media licensing platforms, there’s a growing sense that a collective approach to licensing could help solve some of the problems of the industry which, in sectors like mobile, has been scarred by long-running and costly disputes between patent owners and potential licensees. According to Siino the market is experiencing a new stage in its evolution.
“It’s a different environment than a few years back,” he commented. “There’s a new realignment taking place where the battle lines are no longer between operating companies and NPEs. There’s a new dividing line that has emerged between companies of whatever background who really want to support a transparent and fair marketplace for IP and those that want to live in the shadows and avoid transparency and point the finger at the other guy, whichever side they’re on.”