3GSM LTE IP Posturing
Major operator members have proposed to the ETSI a two part plan designed to enforce a pre-agreed cumulative cap of somewhere between 3 and 5 per cent on the cost of all LTE equipment, as well as an 'ex ante' (beforehand) approach to declaring all relevant patents.
A number of vendors, backed by Ericsson, Nokia and Motorola, have since presented a counterproposal dubbed "Minimum Change, Optimal Impact".
>> The Patent Revolution Over LTE
James Middleton
Telecoms.com
09 March 2006
tinyurl.com
"Enough is enough," the mobile operators say. Long complaining of the escalating costs of kit caused by hidden intellectual property licensing costs, Vodafone, T-Mobile, Orange and KPN are preparing to hold patent holders to ransom.
Within the bowels of the European Telecommunications Standards Institute (ETSI), a radical plan is being hatched to cap intellectual property rights for patents essential to all components of the 3GPP's next generation radio standard known as LTE, or Long Term Evolution.
The authority is examining a two part proposal from the operator camp designed to enforce a pre-agreed cumulative cap of somewhere between 3 and 5 per cent on the cost of all LTE equipment, as well as an 'ex ante' (beforehand) approach to declaring all relevant patents.
The second part is designed to eliminate the possibility that any new royalty claims relating to LTE equipment will be lodged in the future, in a bid to remove hidden costs.
And the operators are willing to play hardball to ensure that a resolution is reached.
A T-Mobile spokesman sent out a warning shot to the patent holders: "We will delay finalisation of standards until IPR is solved," he said. "If vendors do not sign up to the agreement, then we will not use their patents in the standard."
But with vendors not wishing to slide into industry pariah, ETSI is examining a second proposal from the vendor camp, which has also been keen to stick the boot into Qualcomm.
Qualcomm is not seen as big a contributor to the WCDMA standard as some other major vendors and to this end Ericsson, Nokia, Texas Instruments, Broadcom, NEC and Panasonic have filed complaints with the European Commission to investigate the WCDMA licensing practices of the US vendor.
The move effectively labels the industry's patent regime as unfair, unreasonable and discriminatory and alleges that Qualcomm infringed IPR rules by trying to exclude chipset manufacturers from the market and preventing others from entering by charging excessive and disproportionate royalties for its essential WCDMA patents.
In this situation, Qualcomm's hand may be forced. The fact that CDMA will be omitted from the 3GPP's LTE standard puts Qualcomm under pressure to agree to the terms for the OFDMA patents it controls or see the industry go ahead and use other flavours of OFDM. A result that would put Qualcomm's $600m acquisition of Flarion in an entirely different light.
As an aside here it should be noted that LTE is expected to be based on many elements that will be included in Release 7 of the 3GPP standard, primarily OFDM and MIMO.
LTE is expected to increase peak downlink speeds to more than 100Mbps and better than 50Mbps uplink. It's unlikely not be commercialised until two to three years after the standard is complete in 2008 or 2009.
But back to the main point - the vendors' argument is that ex ante is difficult to implement because no one can really be sure in advance what patents will be essential, moreover, there is a good chance that many patent holders might not be ETSI members.
So, a number of vendors, backed by Ericsson, Nokia and Motorola, have since presented a counterproposal dubbed "Minimum Change, Optimal Impact".
The fluffy terminology is grounded in the principles of "aggregated reasonable terms" and "proportionality", which means that when determining what cumulative value should be assigned to patents on a given technology in an end product, licenses required in all the other necessary technologies and overall business conditions should be taken into account.
Meanwhile, the principle of proportionality means the royalty rate a patent holder deserves is proportional to the share of that patent holder's essential patents on the technology in question.
Or so says Nokia's definition.
The thing with Minimum Change Optimal Impact, is that it too will need full support of all the operators - all of which can threaten to boycott any solution that carries too much expensive IPR.
It is thought that the vendor proposal in its present form does not satisfy the operators' requirements, which may lead to a delay in the ratification of the LTE specification.
ETSI apparently intends to have an IPR solution in place for LTE in time for the plenary meetings on the specification of the technology due to be held in June, though the work plan might be delayed until September, and depending on whether the operators boycott development, could be pushed back even further. <<
- Eric - |
