The dream of driving down LTE royalty levels dramatically is fading, says Caroline Gabriel at Rethink Research. Intel and Samsung have sought to spearhead an open, transparent and low royalty structure for WiMAX patents and formed the Open Patent Alliance (OPA) in June 2008.
That doesn’t seem to be the case with LTE. Qualcomm and its GSM technology counterpart InterDigital together control 40% of the LTE patent pool, with 19% and 21% of total patents, respectively, says Informa. Most LTE supporters want the royalty bill to be a one percentage of the sale price in an LTE handset, but IPR owners appear to be pushing it closer to 5% – similar to Qualcomm’s IPR tab.
Ericsson, the world’s largest wireless infrastructure manufacturer, claims to have 25 percent of the essential patents to Long Term Evolution (LTE) networks, making the vendor the single largest IPR hold in LTE. Most of the huge IPR holders in W-CDMA – Qualcomm, Nokia, Ericsson and InterDigital – are also claiming a big share of the LTE patent base.
Ericsson claims contradict a survey from Informa regarding essential IPR holders. Informa estimates Ericsson is much lower in the IPR ranking, behind Qualcomm, InterDigital, Samsung and Huawei in total patents, with emerging vendors such as Huawei also contributing 4G development research.
Unlike Qualcomm – which by almost everyone’s calculations remains the leader in essential IPR – Ericsson is favouring a patent pool approach, which would set the total royalty rate for combined patents at under 10%, says Caroline Gabriel.
The Open Patent Alliance, gathers rights to WiMax patents and licenses them to makers of consumer electronics devices, networking equipment, and computers. It includes Intel, Cisco, Samsung, Sprint, Clearwire, and Alcatel-Lucent.