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June 10, 2008
Six of the big guns in the mobile WiMAX world announced the formation of a patent pool on Tuesday.
Dubbed the Open Patent Alliance (OPA), the founding members are Alcatel-Lucent, Cisco, Intel, Samsung and WiMAX pin ups of the operator community, Clearwire and Sprint.
The group said the purpose of the OPA is to help drive uptake of mobile WiMAX by encouraging greater product differentiation and interoperability, as well as a lower and more predictable cost structures.
Through the pool, OPA members will aggregate the essential patent rights needed to implement the 802.16e (mobile WiMAX) standard. This, in turn, helps participating companies obtain access to patent licences from patent owners at a predictable cost.
The OPA said its focus is on providing a more competitive royalty structure by charging only for the features required to develop WiMAX business products.
OPA says the pool “will incorporate a variety of royalty licensing solutions, including accounting for cross-licensing among individual members within the pool”.
“It’s about openness [and] predictability of the business model,” said Scott Richardson, an executive with Clearwire, in a statement to reporters.
A patent pool also presupposes that participating IPR (intellectually property rights) holders are building their businesses primarily around infrastructure and CPE sales rather than through royalty payments.
In addition to creating the mobile WiMAX patent pool, the OPA says it will educate the WiMAX ecosystem about IPR topics by acting as a central resource.
OPA says that it expects to secure the participation of an additional six to nine investor companies, although no timetable for that has been announced.
Telecoms.com recently met with Roberto Dini, patent consultant and founder of Sisvel, an Italian company appointed to represent the patent holders behind the DVB-H mobile TV platform.
“Five years ago, the industry was in a patent heaven and there was room for everyone. But this heaven was disrupted by the arrival of the Chinese producers, who made the market more competitive,” Dini said. “Patent pooling is now a necessity as technology has become more complicated. But the difficulty is always in convincing the parties involved to compromise.
“Of course certain technologies are always going to be pushed by different partners and you can’t have a patent from everyone,” he said, but when you consider the members of something like 3GPP, which incorporates Nokia, Ericsson and Qualcomm, it becomes obvious that getting those players to agree caps on standard rates is going to be difficult. “Cross licensing can be used to solve the problem but those with larger patent portfolios often demand more money,” Dini added.
The point is that royalties are a reward for the disclosure of patents, and patent pooling is one way of getting the technology into the market so those royalties can be collected. If this reward for innovation is not available to the industry, it would likely lead to less of an incentive for companies to invest in R and D, ultimately slowing down innovation.
“Intellectual Property is related to the success of a product, so royalties need to be attractive and licensed on friendly terms to everyone,” Dini told telecoms.com. “The patent pool is created after standardisation, but patent owners need to declare essential patents during standardisation on FRAND conditions,” he said, arguing that the potential revenues for any given market are not actually realised until the success of a certain product is proven.
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