gustino de sanctis- sisvel- lte patent pools
TRANSCRIPT
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Key Elements for a Successful LTE Patent Pool
www.sisvel.com
Confidential
Giustino de Sanctis
Amsterdam, May 18, 2010
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www.sisvel.com
Confidential
SISVELA BRIEF INTRODUCTION
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www.sisvel.com
Sisvel: a Brief Introduction
• Founded in 1982 to spin-off a significant portfolio of television
patents developed by Indesit, Sisvel is a dynamic and full service patent management company.
• Today Sisvel is a truly independent company, but it has deep
roots in the industry.
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• Sisvel is one of the oldest and, with a team of nearly 80
professionals, one of the largest administrators of IP Rights.
• Sisvel is headquartered in Europe, but operates as a multinational company with subsidiaries and offices on three
continents.
• Sisvel has its own research laboratories and engineering team.
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Sisvel’s Global Presence
SISVEL S.P.A.
Turin, Italy
SISVEL Japan
Tokyo, JapanSISVEL Germany GmbH
Stuttgart, Germany
www.sisvel.com
Confidential
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SISVEL (Hong Kong) Ltd.
Hong Kong
SISVEL US, Inc.
Audio MPEG, Inc.
Alexandria, VA
Edico, Srl
Rome, Italy SISVEL Technology, Srl
Turin, Italy
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www.sisvel.com
Current Programs:
MPEG AUDIO
Licensing Programs
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Programs under Development:
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PATENT POOLSBASICS AND BENEFITS
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Patent Pools: Basics
www.sisvel.com
• A “Patent Pool” is a portfolio of patents essential to the same
standardized technology but owned by different parties.
• The purpose of the pool is to facilitate licensing essential patents.
• Patent pools are pro-competitive:
– provide more certainty and predictability to those who are
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– provide more certainty and predictability to those who are
interested in adopting the standard and creates a leveled playing field;
– reduce aggregate royalties by establishing a single royalty rate for the participating companies patents;
– reduce transaction and administrative costs for both patent owners
and licensees;
– promote FRAND licensing terms and conditions.
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Confidential
A PATENT POOL FOR LTEKEY ELEMENTS
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www.sisvel.com
Sisvel LTE/SAE Patent Pool Facilitation
• 32 Partecipating Companies – from Europe, US, China,
Japan, and Korea, including major telecommunications
companies (both network operators and equipment
vendors), consumer electronics and integrated circuit
manufacturers, and research institutes
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manufacturers, and research institutes
• Last Facilitation Meeting
– 21 - 22 April, 2010 in Hong Kong
• Next Facilitation Meeting
– 15 – 16 June, 2010 in Washington DC
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www.sisvel.com
34%
4%
Sisvel Facilitation
Not in any Facilitation
Unknown
Sisvel LTE/SAE Patent Pool Facilitation
• 32 companies – from Europe, US,
China, Japan and Korea, including
telecom companies (both network
operators and equipment vendors),
consumer electronics and IC
manufacturers, and research institutes
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• Based on declarations of essentiality
to standardization bodies such as ETSI
and TTA, these 32 POs hold over 60% of the intellectual property relevant to
LTE
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62%
Last Facilitation meeting:21 - 22 April, 2010: Hong Kong
Next Facilitation meeting:15 – 16 June, 2010: Washington
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• A well-balanced, customized pool is much more likely to
achieve these goals than one based on a “cookie cutter”
approach
• A successful pool needs to attract both large and small Licensors
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Key factors for Building a Successful LTE Patent Pool (1 of 2)
Confidential
• A successful pool needs to attract both large and small Licensors
to reach Critical mass (in terms of participation and patent
coverage) and offer all Licensees a compelling licensing solution
• To attract Licensors a pool:
– Be attractive for all Licensors
– Adopt a simplified and transparent process
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• To achieve wide acceptance among Licensees, a pool should:
– Non-discriminatory licensing by a truly independentadministrator acting globally include enforcement and
compliance mechanisms to give Licensees confidence that all
market participants are treated equally
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Key factors for Building a Successful LTE Patent Pool (1 of 2)
Confidential
market participants are treated equally
– Include administrative tools that enhance efficiency and
make the reporting and payment process easy
– Offer a license with a royalty that is reflective of what is
offered:
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Value based proposition
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A PATENT POOL FOR LTEROYALTY RATE
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LTE: What Level of Royalties?
• A first step to address royalty stacking was taken by NGMN by the introduction of the "Trusted Third Party IPR Process” (TTP)
• The results are not publicly available, but some have Declared Maximum Rates (as % of handset selling price)
• The aggregated value of only 10 parties is already a 2-digit figure and there could be as many as 50 parties holding essential LTE patents.
Confidential
essential LTE patents.
Nokia 1,50% * ALU 2,00%
NSN 0,80% Nortel 1,00%
Ericsson 1,50% Huawei 1,50%
Qualcomm 3,25% ZTE 1,00%
Motorola 2,25% Vodafone 0,00%
* 2% for multistandard
14This chart reports for some companies the “maximum” LTE desired royalty rates that have been publically declared by those companies.
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www.sisvel.com
LTE Royalty LevelNo Patent Pool – Possible Scenario
Based on Public Declaration and Sisvel’s Assumption% of handset selling price
cumulative
Confidential15
2.00% 1.50% 1.50%2.25%
1.50% 1.00% 0.80%
3.25%
0.00%1.00%
% of handset selling price
++
This chart reports for some companies the “maximum” LTE desired royalty rates that have been publically declared by those companies.
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Royalty Leveltwo patent pools and outside patent owners
cumulative
% of handset selling price
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cumulative
% of handset selling price
++
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www.sisvel.com
Royalty Levelone patent pool and outside patent owners
% of handset selling price
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cumulative
% of handset selling price
++
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Royalty LevelIdeal scenario
% of handset selling price
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% of handset selling price
=
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The Challenge of Setting Royalty RatesParticipation and Royalty Rates
The chicken and the egg problem: what comes first?
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Confidential
ROYALTY RATES
PATENT OWNERS
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The Challenge of Setting Royalty RatesTwo Methods
Traditional Method
Royalty Comes First
Participation Method
Patent Owners Come First
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Confidential
Royalty Comes First Patent Owners Come First
• Royalty rate is decided by the
group
• Participants decide whether to
join after royalty is set
• Participation negotiated with
all members
• Pool royalty rate set as a result
of the above negotiations
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Aggregated Rate vs. Patents/POs
Pool
Royalty Rate
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Confidential
Number of Patent Owners21
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Pool
Outside of Pool
Aggregated Rate vs. Patents/POsRoyalty Rate
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Confidential
Number of Patent Owners22
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Pool
Outside of Pool
Aggregate
Aggregated Rate vs. Patents/POsRoyalty Rate
www.sisvel.com
Confidential
Number of Patent Owners23
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Pool
Outside of Pool
Aggregate
Aggregated Rate vs. Patents/POsRoyalty Rate
www.sisvel.com
Confidential
Number of Patent Owners24
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Pool
Aggregated Rate vs. Patents/POsRoyalty Rate
www.sisvel.com
Confidential
Pool
Outside of Pool
Aggregate
Number of Patent Owners25
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Thank You
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Confidential
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Confidential