Re: 3G3P - 3G Patent Platform
<< TOKYO (Nikkei)--The Fair Trade Commission on Thursday informed 19 major telecommunications companies around the world preparing third generation cell phone services that their plan for standardized patent fees conflicts in no way with antimonopoly law. >>
From my previous post quoting 3GPP on the NEW CO Patent platform:
As of today this NEW CO is not operational since it is waiting for the approval of the US/EC/Japanese competition law authorities in order to launch the above-described activities.
Looks like the Japanese Fair Trade Commission simply proacted to this issue quicker than EU & the US.
June article on this subject here:
>> 3G Patents Initiative Devised To Avoid 'Qualcomm-Type' Disputes
Joanne Taaffe
19 June 2000
CWI
Mobile telecoms equipment manufacturers and operators are setting up a new company with the aim of reducing the royalties they pay each other for the use of patented technology in third-generation mobile systems.
The move could save "hundreds of millions of dollars" in new network-build costs, according to sponsors of the new company, led by businesses including Alcatel SA and Mitsubishi Electric Corp.
The as yet unnamed enterprise hopes to not only slash the cost to vendors of developing equipment, but also open up the market for 3G mobile devices and network equipment to new players.
The company's partners hope to cap future technology royalty payments at 5% of product costs. Currently, royalties account for as much as 29% of mobile system costs.
As well, the patent-licensing cooperative could help avoid protracted disputes such as that between equipment manufacturers and Qualcomm Inc., San Diego, California, a former hand-set manufacturer that decided to specialize in licensing key technology to other vendors instead, but at a price.
"There were a lot of difficulties with GSM in making affordable technology," said Brian Kearsey, director general designate of the 3G Patent Platform Partnership (3G3P), the cellular industry venture that will set up the new non-profit-making company. "[If 3G is] to take off there need[s] to be a mechanism to make acquisitions of that technology cheaper."
Patent disputes have dogged second-generation GSM equipment manufacturers, which develop products according to standards that are set by the European Telecommunications Standards Institute, Sophia Antipolis, France, but which have grown out of the research work of individual manufacturers and operators.
Not only are the rights to intellectual property often expensive, it is hard for those that buy them to gauge whether a patent is essential to the development of a product or not. "The issue has been a real problem in GSM," said John Matthews, principal consultant, Ovum Ltd., London.
"Manufacturers [pay] license fee on top of license fee on top of license fee."
This can result in royalty fees making up 29% of the cost of a hand-set, according to Leo Debecker, acting director of the European Public Telecom Network Operators Association (ETNO) in Brussels, whose organization backs the scheme. The majority of ETNO's 46 members run mobile operations.
The new company will attempt to establish a ceiling on royalty payments as a percentage of overall manufacturing costs.
"We would like to see royalties capped at 5%," said Hisashi Kato, the licensing regulator of Mitsubishi in Japan, explaining that "some people [charge] 10% or more."
If the new company succeeds in its aims it could bring about a drop in equipment costs that could save operators "several hundreds of millions of dollars per network," said 3G3P's Kearsey.
Currently, manufacturers buy royalties from each other on a bi-lateral basis. This can result in a swap, if both companies hold equally important patents. Equally it can result in one manufacturer paying very high prices for a single patent, or being given no choice but to buy a bundle of patents, only one of which may be essential to the equipment they are building.
"What certain companies have done is declare more essential patents than they had," said Serge Raes, standardization program manager of Alcatel, Paris, and director of business development for 3G3P. As a result companies end up paying for patents that are not as useful as the price indicates.
"It's worse than the lottery," Raes added.
But the danger for operators and the industry as a whole is that "if there is a high royalty rate, we have to put our selling price up," said Mitsubishi's Kato. Mitsubishi plans to build 3G terminals and may move into 3G base station manufacturing, according to Kato.
Operator associations were enthusiastic about the initiative, arguing that 3G license auctions in some European countries are making network costs work out much higher than expected.
"We want to see a proliferation of suppliers and more competition between suppliers," said Aoife Sexton, director of corporate affairs and external relations for the GSM Association in Dublin.
"Cheaper equipment ... means more development [of services]," said ETNO's Debecker.
A number of individual operators have also worked on developing the 3G Patent Platform, including NTT DoCoMo, France Telecom, Telecom Italia Mobile, T-Mobil and Sonera of Finland. They say lower royalty fees and a clearer understanding of what technology is covered by which patent will make it easier for new equipment manufacturers to set up shop and compete.
"[The objective is] to keep entry costs as low as possible," said Mika Sarajuuri, vice president at Sonera. "We would like to ensure that technology licensing fees are acceptable and that no single player could distort the market by having high cost license fees for 3G essential patents."
Over the last 18 months the 3G3P has brought together 41 companies and organizations to quantify just what is meant by fair, reasonable and non-discriminatory terms for evaluating whether a patent is essential and for establishing a fair price, as well as pre-defining the commercial terms of the new company.
Company brief
"Independent experts, patent lawyers and technologists ... will declare it to be an essential technology and assign it a dollar value," said Kearsey.
The company will also incorporate an appeal procedure.
Although the company's operating brief is decided, it still has no legal framework, and must wait for the go ahead from regulatory authorities, including the U.S. Department of Justice.
This is because the company will offer services that have been defined by a large number of potential competitors. Kearsey hopes that the company will have the all-clear within the next two months so that it can begin operation in September. <<
- Eric - |
