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MEDIA RELEASE

PA Consulting releases new 5G standards essential patents report

PA Consulting, the global innovation and transformation consultancy, has independently analysed how essential the 5G patents declared to the European Telecommunications Standards Institute (ETSI) are. This analysis provides the true ranking of the leading 5G essential patent holders, rather than one simply based on the number of declared 5G standards essential patents (SEPs); information that is crucial to facilitating 5G technology licensing negotiations.

PA’s new report found:

  • the incumbents from previous generations of wireless telecoms still dominate the 5G patent landscape, with the top ten patent holders (in alphabetical order) being Ericsson, Fraunhofer, Huawei, Interdigital, LG, Nokia, NTT DoCoMo, Qualcomm, Samsung and Sharp
  • there is a significant variation in the average quality of companies’ patents – the difference between the top patent holder and tenth place is 26 percentage points
  • declared 5G patents are, on average, more essential than declared LTE and 3G patents
  • while most 5G SEPs are essential to both 5G New Radio/New Core (NR/NC) and LTE (Rel.15+), some patent holders have a much higher percentage of patents essential to 5G NR/NC.

PA bases its patent evaluation methodology on a deep understanding of wireless specifications gained from developing handsets and base stations. It has reviewed tens of thousands of patents across 2G, 3G, 4G and 5G standards, evaluating patent claims using engineers who develop relevant products.

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. This helps identify the strengths of the companies that own SEPs and informs licensing negotiations around the world.

Sireesha Ancha, an intellectual property expert at PA Consulting, says: “There are thousands of patents already declared to ETSI as potentially essential to the implementation of 5G technologies. 5G provides advanced features, such as Ultra Low Latency, that will transform how entire industries operate.

“As the adoption of 5G gains momentum, the licencing of these patents will become increasingly important. ETSI’s intellectual property rights (IPR) policy states holders of SEPs must be prepared to grant licenses under fair, reasonable and non-discriminatory (FRAND) terms and conditions, but determining what FRAND is, is particularly challenging in this diverse world. And that raises two crucial questions around how many declared patents really are essential and which companies own them. Our report answers these questions directly and provides analysis in a comprehensive and objective way.  PA has been a trusted advisor on this topic for many years and our reports are quoted in court cases as independent evidence of the actual essentiality of patents.”

As a member of ETSI, the UMTS Forum and the WiMAX Forum, PA has a strong reputation for providing a range of independent IPR reports that clarify the patent landscapes for wireless technologies, including LTE/LTE-Advanced, UMTS, CDMA2000, WiFi, PoE (Power over Ethernet) and H.264/H.265.

These reports include expert analyses of SEPs declared to bodies such as ETSI and ARIB, all evaluated by engineers against the technology specifications, to form a technical view of which patents are essential.

PA’s reports show both the share of SEPs each owner has and the overall size of the SEP landscape. This forms the basis of potential royalty rates calculations in the top-down methodology for royalty determination.

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