New LTE Patent Pool attempt

Via Licensing Corp. is looking to administer a patent pool for companies and research institutes claiming to have Intellectual Property for the emerging fast date rate cellular technology Long Term Evolution (LTE).

Last April a group of equipment vendors and handset makers already teamed up to craft a licensing framework for the fourth-generation mobile standard that is based on the 3G Partnership Project's (3GPP) E-UTRA Series 36, release 8 specifications.

The equipment vendors and handset makers that teamed up in April 2008 to establish rules for licensing patents related to the technology included Nokia, Nokia Siemens Networks, NextWave Wireless, Alcatel-Lucent, Sony Ericsson, NEC and Ericsson. They decided to push for "fair and reasonable" licensing terms for the patents related to the so-called 4G wireless network technology.

MPEG LA LLC (Denver, Colo.), the organization set up to administer access to MPEG patents, but which has also branched out into other sectors, has also started working on a patent pool for LTE and has said that several companies have already shown interest in participating in its pooling efforts.

MPEG LA, LLC recently announced that it has made significant progress working with a group of interested companies to facilitate creation of a joint patent pool license for the Long Term Evolution (LTE) Standard for mobile telecommunications. MPEG LA’s efforts, started last year, have been directed toward educating the market about the benefits of a pool license to address the patent thicket around this next generation wireless technology and assist the market with its adoption.

“The market is ready, and we are proud that industry leading companies have invited us to facilitate creation of an LTE pool license,” said MPEG LA President and CEO Larry Horn. “Given the history of telecommunications patent pools, MPEG LA has taken the time to consult directly with mobile network operators, network equipment manufacturers and mobile handset companies regarding the benefits of a patent pool for LTE, and they have encouraged MPEG LA to move forward with this effort. We are pleased by their vote of confidence. Next generation wireless technology, with its multifunctional capabilities, begs for a patent pool licensing alternative to make its full potential available to consumers worldwide, and MPEG LA’s success in creating large pool licenses uniquely positions us to achieve it.”

Via already administers patent pools for a number of technologies, notably in the broadcast, audio and wireless space, including those for MPEG2, 802.11 based Wi-Fi and near field communications (NFC). The company is a spin-out from Dolby Laboratories Inc.

Via can’t force patent holders to play, and without a majority of solid patents with which to negotiate, its attempts will fail. There’s little reason for a larger company to join a patent pool, unless it wants to help push through a standard, which isn’t the case with LTE.

Patent pools have become increasingly popular in recent years to handle licensing in cases of relatively large numbers of patent holders and licensors. The pools can help lower transaction costs and reduce uncertainty and time spent negotiating deals, sometimes with competitors across barriers of language and geography.

Generally, the cost of intellectual property associated with cell phone radio standards has been far higher than devices based on open standards such as Wi-Fi or WiMAX. That means that devices with cellular radios have been more expensive, as have the network equipment costs. I doubt industry players — including Qualcomm, which own LTE patents — are going to be eager to reduce their potential royalty income in exchange for letting Via manage the licensing process. Especially since folks at many of these firms already have the staff and knowledge to handle cross-licensing agreements.