This is a pretty serious development…the European Telecommunications Standards Institute (ETSI) is “working on a radical plan to restrict Intellectual Property Rights for patents
essential to all components of the next version of the 3GPP-based radio standard – Long-Term Evolution (LTE)”, according to Informa Telecoms & Media. The plan is to get all patent-holders to sign up to a pre-agreed cumulative cap of around 5% for royalties on LTE equipment and the organization is also considering an ex ante approach to declaring relevant patents — so a patent can’t be revealed after the standard has been accepted.
LTE will be based on elements in the 3GPP standard, although “CDMA technology will be removed from Radio Layer 1 of LTE”. “It is unlikely all vendors will agree to IPR capping,” said Gavin Patterson, Principal Analyst at Informa Telecoms & Media. “Nevertheless, by removing CDMA from the LTE standard it also removes
perhaps the most vocal opponent to royalty capping and proportionality — Qualcomm.”
A lot of telcos have complained that Qualcomm practices uncompetitive behaviour and have made those complaints official ones to EU regulators. The EC is expected to publish an initial decision within a few weeks, according to Informa, but is likely to recommend a more in-depth investigation…which will take years.
The patent situation is pretty serious…”Estimates for cumulative royalties for WCDMA are between 25% to 30% and the mobile industry could spend US$80-100 billion on WCDMA-IP-royalty payments up to 2017,” says Patterson.
“ETSI is now acting to address the current situation in which IPRs are widely seen as being unfair, unreasonable and discriminatory,” said Patterson. “By adopting either an ex ante approach, capping royalties or both of these proposals, we will see a more clearly defined cost structure for those buying and licensing LTE technology in the future.”
The end result will be to keep down the cost of new handsets which would mean more people with higher-end handsets to buy mobile content…
Related stories:
–Mobile Operators Fight DRM Corner
–MPEG LA Aims At DMB Standard
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