Licensing

Accelerating mmWave 5G adoption substantially increases Device Licensing revenues

Increased throughput and lower latency facilitated by mmWave technology will result in faster handset upgrade cycles and enable new services which translates into improving 5G licensing opportunities. This can lead to billions in industry revenue through technology and patent licensing. The timing is fortuitous as 5G / LTE device shipments are declining as recently attested to by Qualcomm’s 20%+ and Nokia’s 15% declines in device licensing revenues. Unless a new must-have feature or a new performance paradigm is introduced such as what can be enabled by mmWave there is little hope that device licensing will escape its current doldrums.

Dense 5G mmWave infrastructure deployment both outside and indoors is needed to spur consumers and businesses to upgrade their devices to take advantage of the fastest network speeds and lowest latency of 5G. Unfortunately, many operators are not planning to roll out mmWave soon due to its high deployment costs. Even very advanced countries such as South Korea has taken back mmWave frequency because operators balked at the costs of meeting their deployment obligations.  

Lowering equipment costs will spur operators and private network providers to stop delaying and purchase more mmWave equipment. This can only happen if the economics of mmWave deployment make sense. The Alium Open RAN Radio Unit pool can play an important role as it brings cost certainty to radio unit manufacturers thus fostering supplier diversity and competition and hence lower prices, as discussed in a 2023 economic report authored by Harvard Business School Professor Josh Lerner and Bella Private Markets. 

A number of other device licensing markets stand to gain greatly from the timely and robust deployment of mmWave infrastructure. For instance, the 5G IoT and 5G fixed wireless access (FWA) markets are in their infancy and, without a diverse, competitive mmWave radio unit market, rollouts will be pushed out.  

Alium helps enable more market competition for mmWave radio units, thereby decreasing prices and accelerating network deployments. This in turn will spur users to purchase more and higher valued IoT devices faster to take advantage of the better network capabilities of mmWave. We modeled the results and found a 2 year delay in rolling out 5G mmWave infrastructure amounts to a loss of $455 million in licensing revenue over a four year period.

The loss of potential licensing revenue for Customer Premises Equipment (CPE) needed for 5G FWA over the same period could amount to $3.36 billion. 

For more information, visit the Alium website.

The Adoption and Benefits of Royalty-Free Licensing

As part of the efforts of Unified Edge, John Jarosz and his team of economists at the Analysis Group have published a paper on the benefits of royalty-free licensing. Read the abstract below and follow the link to download the paper.

Abstract

Much licensing of patented technology is royalty-bearing, allowing innovators to be compensated for their investments in researching, developing, and then in commercializing the resulting products.

However, over the last couple of decades, standards-based technologies have expanded, in part, due to the increased need for device interoperability, communication, and replacement. Though some of the licensing of patents covering such technologies bears royalties, royalty-free licensing of standards-based technology has grown increasingly common. Indeed, perhaps only a small percentage of today’s widely adopted standards-based technologies are subject to royalty payments. Furthermore, there has been a proliferation of non-standards-based patented technologies and protocols that companies offer on a royalty-free basis (e.g., Adobe PDF and Thunderbolt, discussed further below).

The advantages of royalty-free licensing of technology are obvious for competition broadly and can be numerous for both consumers and companies, specifically, those who benefit from, inter alia, reduced costs and lowered barriers to market entry. But royalty-free licensing can be appealing to innovators as well, as it can result in faster adoption, increased usage, and further innovations that incorporate the standardized technologies. Using some well-known examples, this paper examines the widespread adoption of, motivations behind, and benefits associated with royalty-free licensing in standards-based settings, and even, in some cases, outside of a formal standard-setting organization (“SSO”). Though royalty-free licensing has many perceived and actual advantages, it is not the optimal route for all technology licensing. It can be and is, of course, optimal in many settings.

Alium Introduces Open RAN Patent Portfolio License

First License to Cover 3GPP Infrastructure Starts with 11 Patent Holders

(CHEVY CHASE, MD, US – 7 June 2022) – Alium, a joint venture between MPEG LA and Unified Patents, today announced the availability of the Open RAN Patent Portfolio License (“Open RAN License” or “License”), the first patent pool to address licensing uncertainty in the RAN (“Radio Access Network”) infrastructure space.  Open RAN lowers costs and increases competition, providing network operators with greater control and flexibility in deploying 4G and next generation 5G networks; and accessibility to the essential patents made possible by the Open RAN License supports Open RAN’s adoption.

“Open RAN is a groundbreaking technology ready to blossom and grow with the availability of a pool license offering affordable access, freedom to operate, reduced litigation risk and business certainty for suppliers and users,” said Alium Manager Larry Horn.  “With its potential to accelerate Open RAN market adoption and growth, the Alium pool license will help speed 5G adoption and the delivery of 5G services to the public.”

“Alium takes pride in introducing a number of innovative features to the patent licensing landscape,” said Alium Manager Kevin Jakel.  “The use of an AI-based tool for determining royalty allocations allows participation at no cost to patent holders and assures the feasibility of a patent pool with tens of thousands of patents that would not otherwise be possible. In addition, Alium provides a patent quality program designed to promote the market’s trust in the Open RAN Standard.  We applaud the initial group of technology leaders for their foresight in embarking on this groundbreaking initiative.”

The initial patent owners to Alium’s Open RAN License are Acer Incorporated; AT&T Intellectual Property, LLC; Cable Television Laboratories, Inc.; Comcast Cable Communications, LLC; Godo Kaisha IP Bridge 1; Koninklijke Philips N.V.; Meta Platforms, Inc.; Mitsubishi Electric Corporation; Pantech Corporation (including Pantech Wireless, LLC); SK Telecom Co., Ltd.; and Verizon Patent and Licensing Inc.

The Open RAN Patent Portfolio License and a summary of the License terms may be found here.

Alium’s objective is to offer worldwide access to as many Open RAN essential patents as possible to everyone on the same terms under a single license.  Therefore, Alium welcomes the participation of any party with at least one patent that is essential to the Open RAN Standard.  For more information, please go to https://www.alium-llc.com/licensors.