Intellectual Property Rights (IPR) landscape for WiMAX

A fundamental reality of the tech world is that companies have become increasingly specialized, with each building only a small chunk of any functionality that is needed by consumers. So their products must interact with each other, but without the discipline imposed by common ownership and management. This brings us to the concept of standards, the term given to the mechanisms by which the different participants in a market communicate, coordinate, and cooperate. In the tech context it usually means a specification for organizing and transmitting information.

As of September 2006, there were more than 1,500 patents distributed among 330 companies on WiMAX technologies. Of the 23 companies that hold more than ten patents, 74% are WiMAX Forum members. Nowadays more and more products become WiMAX Forum Certified™ and additional patent holders join the Forum.

There are some key findings in the IPR research:

• As a result of the IPR and market shift, Qualcomm will likely produce WiMAX plus cellular 3G multi-mode chips.
• IPR disputes for WiMAX/4G will be a less costly concern than in cellular. The positions of IPR stake holders with respect to both current and future versions of WiMAX as it evolves towards 4G, IMT-Advanced will influence royalties.
• Trends and consolidation among smaller players indicates further acquisitions by the larger players such as Intel, Qualcomm, Samsung and Motorola, who will strongly influence the overall IPR costs.
• Qualcomm's position in 802.16e-2005 is limited but patent trends indicate a stronger position for a few areas of development that will become increasingly important: “Smart Wireless Network” topology, multimode, video multi-casting and other advances and extension fields of development will strongly impact 4G.
• Wi-Lan, an IPR corporate licensor, has early agreements for WiMAX and related licenses with Redline, Cisco and Nokia, which set early benchmarks for commercial precedents of IPR agreements. This represents the limited direct commercial or legal precedent yet available for establishing IPR licensing trends in the emerging field.
• The report reveals trends in developing technology that are critical to evolution of WiMAX and 4G LTE products and markets. These developments will help to differentiate vendors that, in turn, help decide success or failure for 4G systems and device suppliers.
• Convergence between WiMAX/802.16 plus 802.22, and 3GPP/3GPP2 cellular is taking place in core link technologies, which will increasingly be based on MIMO-OFDM/OFDMA modulation schemes. The envelope of wireless invention (IPR) is being pushed in the “enhancement” technologies including MIMO-OFDMA and smart networking methods that leverage the core link platform to greater advantage.
• Patent activity has accelerated, particularly in the areas mentioned. MIMO-OFDM/OFDMA activity has dominated recent patent application and publishing.
• A few large companies file for large numbers of patents. Many of these can be characterized, as Qualcomm has pointed out, as “fractional” or derivative patents. The report discusses how important the “numbers game” is in estimation of IPR portfolio value.
• Several “WiMAX pure plays” who have been instrumental in standards development efforts have filed comparatively few patents in 4G/WiMAX. However, being closely tied to the standards, the research evaluates the essential nature of their holdings.
• WiMAX and other applications of MIMO-OFDM based systems marks a demarcation between it and prior fields of wireless development. The “evolution” from prior cellular systems is not achieved at a wireless link interface level that is necessary for transition of a majority of prior technology patents.
• Essential patents in the field are held by a large number of companies. But some consolidation has taken place through acquisitions. Some patents have not been reassigned to the acquiring company. The research database has categorized patents based on current holders.
• Some fundamental and essential patents on OFDM and MIMO go back several years. In some cases, the companies involved in important areas of early development are not those now considered wireless telecommunications industry dominant market leaders.
• Trends in competitive product developments and projections for new products are discussed.
• Competitive positions and moves are analyzed for impact on about five years forecasting of developments.
• Prospective acquisitions, partnering, pooling, and other activity can be learned from a study and is briefly discussed in the report of the database analysis.
• The guidelines for determining fair and reasonable royalty rates for WiMAX are analyzed based on what is considered fair and reasonable for similar fields of development, particularly in context for standardsbased developments.
• “Fair and reasonable” agreements of standards groups are often contested.
• Surveys show that service providers want certainty. A reasonable cost for IPR paid in royalties or cost of goods is acceptable. Disruption of business is not desired.
• Interviews with IPR holders indicate that they want/expect reasonable compensation for R&D: either reasonable royalties or expressed in the cost of goods sold; in their position in the market.
• The WiMAX/LTE 4G Intellectual Property Rights (IPR) Policy & Market Report has identified:
  o Over 550 patents that are essential to WiMAX 4G.
  o The number of “fundamental” patents is lower than 20.
  o The total number of patents that relate directly to the field that are contained in the Maravedis database is 2,060.
  o The number of patents including related areas of OFDM such as DVB/DVB-H and FH-OFDM and related segments of wireless development such as CDMA and 802.11 related to OFDM is 3,520.