In the future, it is predicted that half of the world’s data will be generated by non-human sources (vehicles, machines, sensors, etc.). This next industrial revolution will increasingly integrate connectivity into mechanical products, the increase in the number of devices and the amount of data will create new demands for 5G and future 6G technologies, and enterprises will It must depend on the connection standard covered by SEP. However, SEP owners’ priorities remain to actively monetize and strengthen their portfolios. Both 5G SEP owners and standard implementers face the challenge of managing operational and financial and cost risks while striving to maximize value.
The 5G technology revolution will not only disrupt business models for connected devices, it will also force the industry to rethink how best to handle intellectual property.
5G SEP licensing challenges
Royalty payments from SEP transactions play a key role in driving the innovation cycle of connected products. A SEP license agreement is often achieved by two parties with different objectives and motivations negotiating a contract and signing a SEP license agreement. To achieve this, companies need to find ways to agree long-term sustainable contracts and royalties. His portfolio, which includes thousands of SEPs that are part of accepted standards such as 5G, has great value. This leads to the question, how much is a SEP portfolio worth?
The most common approach to determining the value of a portfolio is to rely on comparable licensing agreements as a reference point for other transactions. However, since these are not publicly available, they may not always be applicable.
As the complexity of licensing SEPs in new industries increases, so does the need for transparency, as does the need for additional reference points. The European Telecommunications Standards Institute (ETSI) provides a 3G, 4G, or 5G database that serves as a comprehensive list of potentially essential patents. However, the ETSI raw data of declared patents is very large and messy and requires rigorous cleaning, matching, and deduplication. Additionally, the most difficult part is assessing the value of these patents and determining which self-declared patents are essential to the implementation of the standard.
Claim charting may seem obvious, but it can be expensive, time-consuming, and impractical when negotiating portfolios with hundreds or thousands of patents. Negotiating parties often agree to determine the essentiality of a small sample of a larger portfolio. Nevertheless, the question remains how large and valuable a particular portfolio is compared to the total number of SEPs for standards such as 5G. To evaluate the SEP portfolio, we need to evaluate the ultimate owner’s 5G portfolio (numerator) and his overall number of 5G SEPs (denominator). However, there are approximately 60,000 declared 5G patent families (both pending and approved worldwide), making it impractical to assess the value and determine essentiality of all declared patents. there is no.
How to count and evaluate patents declared in 5G
The value of patents varies, especially when it comes to standards. A SEP protects the core technology across generations of a standard, while sometimes describing only minor improvements to existing standard functionality. Furthermore, not all self-declared patents are essential. According to experts’ estimates, only about 10% to 20% of his declared 5G patents are truly essential. Therefore, counting patents alone does not accurately reflect the value and enforceability of an SEP portfolio.
This report collects over 60,000 declared 5G patent families, of which approximately 30,000 are valid and licensed at the EPO or USPTO by July 15, 2023. Identification was performed using the 3GPP Technical Specification (TS) database and mapped the TS declared in ETSI to 5G technology generations. And we’re looking at 3G to 5G and 4G to 5G bridging technologies. Patents declared for 5G standard projects but only for 3G or 4G TS will not be considered. Patents were counted according to ultimate owner data: ultimate assignee and highest parent company as of July 15, 2023. The analysis refines the patent count using metrics related to patent value and technological leadership in 5G standards development. Table 1 ranks the top 10 companies declaring 5G patents by three different measures.
The leftmost column is the average ranking of these measurements. The first measure ranks ultimate owners by the number of declared 5G patent families (extended INPADOCs) that are valid and granted (EPO or USPTO).
The second column ranks the ultimate owners based on the number of 5G patent families (active, granted, EPO, or USPTO) declared by the Patent Asset Index.
The third column ranks ultimate owners by the number of 5G technology contributions submitted to 3GPP, the organization developing 5G standards. In this analysis, only 3GPP’s technical contributions since 2015 (as these are considered to be primarily related to his 5G) are counted (non-technical contributions in category A, D or F). (excluding contributions).
Table 1. Ranking of top 10 5G patent family owners
| rank | Company Name | Head office area | Ranking of 5G families (European or US patents granted and valid) | Patent Asset Index Rank 5G Family* | Ranking 5G-related 3GPP contributions |
|---|---|---|---|---|---|
| 1 | huawei | CN | 1 | 3 | 1 |
| 2 | Qualcomm | we | 2 | 1 | Four |
| 3 | samsung | KR | 3 | 2 | Five |
| Four | Ericsson | S.E. | 6 | 6 | 2 |
| Five | nokia | F.I. | Five | 7 | 3 |
| 6 | LG Electronics | KR | Four | Four | 8 |
| 7 | ZTE | CN | 7 | 8 | 6 |
| 8 | Oppo | CN | 7 | 12 | 12 |
| 9 | NTT | Japan | Ten | 13 | 9 |
| Ten | interdigital | we | 14 | Five | 15 |
The Patent Asset Index represents a measure of the innovative strength of a portfolio. A patent family becomes more valuable when other innovations are built upon the technology protected by this family and the extent of protection that the ultimate owner sees fit. This index represents the individual strength of a patent family and measures its technological relevance (global citations obtained by a patent after adjusting for age, patent office practices, and technology field) and market coverage (valid patents and weighted market size protected by pending patent applications). protection of certain inventions). This is stated in comparison to other parent families within the same field. This index methodology is based on years of scientific research and has been validated to correlate with the value of patents from the world’s largest patent holders across industries.
5G standards are specified by 3GPP, the umbrella organization that develops protocols for mobile communications generations 3G, 4G, and 5G, published by ETSI. 3GPP follows the principle of decision-making by consensus. Therefore, making a technically meaningful and convincing contribution that is accepted, approved and incorporated by all members will require significant research and investment (some decisions may be made if consensus is not reached). may follow a majority voting procedure). Companies can only gain trust by participating regularly and developing the best specifications. This allows companies to incorporate proprietary and sometimes patented technologies into the standard. 5G contribution data therefore facilitates the evaluation of an organization’s involvement and investment in the development of 5G standards.
Beyond counting patent families
Table 1 makes it clear that relying solely on the number of patents can lead to different results when compared to other indicators of 5G leadership. For example, unlike his nine other patent holders, InterDigital, a company that makes money primarily through his SEP licenses, is not interested in the nature and value of his SEP portfolio in negotiations and legal disputes. It depends a lot. According to Table 1, InterDigital ranks 14th when considering only patent families (active, granted, EPO, or USPTO). However, when leveraging the patent asset index, InterDigital jumped to fifth place in the ultimate owner 5G patent ranking.
Be careful when looking at 5G patent rankings due to data limitations and various filters. ETSI’s patent declaration data lacks essentiality checks and has not been cleaned up or updated. Differences in filing practices among 5G patent owners also impact rankings. Over-declaration is common but often well-intentioned due to ETSI’s early filing policy. Similarly, 3GPP contribution data is inflated and not all contributions are eligible for patents.
This report introduces data improvement techniques recommended by industry experts to eliminate systematic over-reporting and inflated standard contribution submissions. Count unique patent families, eliminate duplicates across specifications, expand corresponding families, remove misdeclared patents, and even exclude previous generation patents to cross-check results. Rank your 5G portfolio. In doing so, we eliminate intentional overreporting that can inflate results. Contribution data is also deduplicated and only technical contributions are considered.
5 key considerations for the future of 5G
Licensing 5G SEP is a challenging task for any sector that relies on 5G technology. Senior patent directors, licensing executives, or attorneys should keep in mind the following:
- Future technologies that enable connectivity will increasingly rely on technology standards covered by the SEP, such as 5G.
- The number of 5G SEP declarations and SEP owners continues to grow, and the fragmentation of SEP ownership increases the complexity of SEP licensing.
- Connectivity standard implementers must consider royalty costs and appropriate security payments upfront.
- In addition to considering the information obtained from the raw patent declaration data, it is necessary to refine the information when using it as a reference point.and
- SEP determination and value estimation are important for accurately estimating 5G leadership and market share.
This is an insight article written by a selected partner as part of IAM’s co-published content.Read more about insights
