Telco heavyweights agree to limit LTE IPR costs

Stuart Corner
Tuesday, 15 April 2008 10:21

Business IT - Technology

The Long Term Evolution of cellular technology - which promises wireless broadband access in the 100Mbps range -  has taken a significant step forward with seven major global telco vendors signing up to an agreement that will limit intellectual property licensing fees and, hopefully, avoid the costly and protracted IPR litigation that has bedevilled other technologies in recent years.

The seven vendors: Alcatel-Lucent, Ericsson, NEC, NextWave Wireless, Nokia, Nokia Siemens Networks and Sony Ericsson say they have commited to "a framework for establishing predictable and more transparent maximum aggregate costs for licensing intellectual property rights that relate to 3GPP Long Term Evolution and Service Architecture Evolution standards (LTE/SAE)." They have invited other holders of relevant IPR to join this initiative - one conspicuous by its absence from this initial partnership is Qualcomm.

The framework is based on the principle of fair, reasonable and non-discriminatory (FRAND) licensing terms for essential patents. This means that the companies agree, subject to reciprocity, to reasonable, maximum aggregate royalty rates based on the value added by the technology in the end product and to flexible licensing arrangements according to the licensors’ proportional share of all standard essential IPR for the relevant product category.

Specifically they are proposing a single-digit percentage of the sales price as being "a reasonable maximum aggregate royalty level for LTE essential IPR in handsets." For notebooks, with embedded LTE capabilities, the companies support a single-digit dollar amount as the maximum aggregate royalty. The parties believe the market will drive the LTE licensing regime to be in accordance with these principles and aggregate royalty levels.