The IP Recap
Keeping you in the loop on IP-related news
Ericsson Publishes 5G License Fees
Is transparency the new trend?
SEP licensing has been a changing scene since the landmark case of Huawei and ZTE, and it looks like the Swedish telecoms giant could be about to change the game further after announcing their SEP license fees for 5G. They have announced that they will cap royalties at $5/phone for top-end devices, and as little as $2.50 for entry level ones. Analysts state that this is a move to increase transparency and reduce litigation risk for licensors in this market, and in doing so disarming critics of SEP licensors.
Why it Matters
Having one major player declare their license rates for 5G increases pressure on the other licensors, and they will be under immense pressure to justify any increase over Ericsson’s $5 maximum. If this turns out to be a success, it could be a landmark move in SEP licensing, and transparency could emerge as the new trend.
The Smartphone Royalty Stack May Not Be As Tall As Many Thought
Many have tried to estimate the size of the royalty stack for a full-featured smartphone, which will use many standardised technologies and therefore need licenses to the associated SEPs. The standard and much-quoted estimate came from two Apple lawyers and an Intel exec, whose bottom-up approach concluded that SEP royalties are around $120 for a $400 phone, or 30%. This was considered bad for consumers and was cited by some as a reason to shake up the system.
However, a new study published by Stanford University finds a very different figure from research into past royalty data. From top level averages of total royalty revenues, total phone sales and average phone values, they were able to derive that the average royalty rate on a smartphone was just 3.4%. This suggests that there is actually very little monopolistic power being exploited in the smartphone market.
Why it Matters
Many of us will have heard the royalty stack figure of 30% used as a reason that patents are bad for consumers, but this study’s results suggest that the full royalty stack is rarely exploited in full. Instead, it serves as an example of how complex license agreements can be, and the authors speculate that a smartphone monopoly could only be achieved if a company fully vertically integrated into every aspect of the smartphone, rather than the current set up where many specialist companies create a subset of smartphone features, and therefore reduce their ability to seek lost profits through litigation.
Xiaomi Adds Another Portfolio To Their Ever-Growing Asset List
What can we surmise about Casio now?
According to the USPTO assignment records, Xiaomi’s 2016 patent buying spree wasn’t limited to the 3 transactions previously announced, as IAM reports, they have found assignment records for another 59 US assets from Casio coming Xiaomi’s way. The buying of older assets from established players is a widely used move for companies looking to expand, be it into new tech sectors or new territories. However, the fact that it was Casio selling the patents is of note, as they have historically not been much of a patent seller, but have sold a number of portfolios recently, which could be indicative of an increased importance of monetisation at Casio.
Why it Matters
Large portfolios accrued over time can lose relevance to a business that has since evolved into different sectors, and Casio’s recent shift to sales could well be aimed at raising some revenue whilst ridding themselves of the patent maintenance overhead costs. This is much to the benefit of Xiaomi, who can now enjoy some additional protection for themselves in the US using some earlier, and therefore broader assets.
Other IP News Stories
- Xiaomi continues patent purchases with Casio acquisition, while earlier buys accelerate chip self-sufficiency
- European Patent Office grants more patents to US companies than ever before
- Intellectual Property Rights in UK Law
- Pokémon Go: augmented reality tests IP
- Patent protection for software-implemented inventions
- Google open innovation powered by efficient infringement
- BREAKING: Patent Office finally confirms Michelle Lee is Director of the USPTO
- Do You Need a Patent?
- Broadcom files patent suits against LG, Vizio, others over smart TVs, video processing semiconductors
- China poised to top global corporate patents
- Wal-Mart reportedly lands patent for in-store drones
- Apple Watch 3 to feature integrated Cycling power meter, patent application suggests
- Adidas sues Asics over fitness-tracking patents
- Ericsson is right to embrace licensing transparency, but the company now has to make it work – Ericsson Tries to Avoid Patent War by Publishing Rates for 5G
- Is there An Anti-Commons Tragedy in the World Smartphone Industry?
- New data suggests that Japanese courts continue to be deeply unfriendly to patent owners
Other Tech News Stories
- Tech’s response to Trump’s new immigration order
- IBM and Salesforce are teaming up to sell you AI
- Google is buying a data science and machine learning community
- Nvidia’s new embedded AI platform is smart
- Intel buys Mobileye in $15.3B deal, moves its automotive unit to Israel
- Spotify and Waze partner to play music and navigate seamlessly
- BMW is aiming for the top of the self-driving food chain
- Tesla co-founder and CTO JB Straubel explains its new solar storage facility
- Apollo Box is applying AR to drive lifestyle e-commerce
- Samsung’s Bixby breaks cover
- Google apologizes after firms pull their ads
- Uniti Sweden partners with Siemens to build affordable electric car