PA Consulting’s 2023 report identifies significant increase in 5G essential patent declaration and shift in ownership ranking

To ensure fair competition and to foster continued advancements within the telecommunications sector, it is crucial to have transparency around the true number of Standard Essential Patents (SEPs) owned by each company. This is particularly important given the rise in essential patents declared to standards bodies or Standards Developing Organisations (SDOs) – which are not all truly ‘essential’, as not all these patents are embedded within the standard itself.

PA Consulting (PA), the company that’s bringing ingenuity to life, has published its latest independent 5G Standard Essential Patent report, which sets out key findings for facilitating 5G technology licencing negotiations globally. The study reveals there has been a significant increase in the submission of patent declarations related to 5G technologies, resulting in a notable upswing in total potentially essential patents. There is also considerable variation in the relative holding of essential patents, which results in a level of uncertainty for both SEP licensors and licensees.

PA’s analysis offers a true essentiality ranking of the primary global holders of 5G essential patents – going beyond a mere tally of raw 5G essential patent declarations submitted to the European Telecommunications Standards Institute (ETSI). By enabling a comprehensive understanding of the evolving strengths within each licensor's declared patent portfolios, these findings play an important role in aiding 5G SEP licencing negotiations around the world.

Key findings from our latest report include:

• The overall declared essential patent landscape has increased more than eight times by number of patent families since November 2019.
• The companies ranked highest have shifted from previous technology generations. Huawei, Qualcomm, and BBK Electronics (including Oppo and Vivo) now take the dominant positions for declared patent families, with at least one granted patent in major jurisdictions, followed by Samsung, LG, and ZTE.
• Huawei and Qualcomm hold the top positions for all patent families declared to ETSI (including those with patent publications and pending applications), with Nokia and NTT Docomo slipping down. More than 70% of all patents deemed potentially technically essential to 5G are related to the physical layer and the radio access network (RAN) technologies.
• As per declarations to previous technologies, the average quality of each company’s patents varies significantly. Among the top 20 patent holders, Interdigital, Lenovo, MediaTek, NEC, and NTT Docomo have the highest essentiality rates, whereas BBK Electronics (including Oppo and Vivo), Huawei, KT Corporation, Langbo, and LG have the lowest essentiality rates.

Sireesha Ancha, Intellectual Property Lead at PA Consulting, said: “5G technology is maturing and being adopted at scale across the market including in the consumer, manufacturing, healthcare, telecoms, and transportation sectors. Similar trends have been observed in the 5G Standard Essential Patents domain, where declarations to ETSI have increased exponentially in recent years.

“This ultimately gives rise to more challenges in 5G SEP licencing. Whilst holders of SEPs must be prepared to grant licences under fair, reasonable, and non-discriminatory terms and conditions, patent declarations to ETSI generally provide little information about the true essentiality rate and the current SEP ownership status.

“PA offers SEP transparency through comprehensive, objective analysis of the essentiality of patents in 5G technology and other telecommunications technology domains. We are proud to be an independent advisor whose expertise and experience in this area are continuously trusted by the industry.”

Notes to Editors

Standard Essential Patents (SEPs) protect inventions which are fully incorporated in the standards. Any equipment complying with a standard infringes on its SEPs, and this infringement cannot be avoided by clever engineering.

This report builds on PA’s original analysis of November 2019 to encompass the independent essentiality review of 5G patents declared to the European Telecommunications Standards Institute (ETSI) up to November 2022. It extrapolates patent landscape with ETSI declarations and ownership information as of October 2023.

Similar to previous reports, this analysis has been independently conducted by PA’s in-house wireless telecom engineers with expertise in implementing technologies pertinent to 5G. The patent evaluation is based on transparent methodology and an in-depth understanding of wireless specifications, thanks to the team’s experience in developing telecom handsets and base stations for over 25 years.

PA’s engineers have independently reviewed tens of thousands of patents across 2G, 3G, 4G and 5G standards and evaluated the claims of each patent. The result is a database of all the patents evaluated, their potential essentiality ranking and the rationale for the ranking, along with a summary report of each licensor’s current ownership of SEPs.