As the SEP world’s focus shifts to IoT, communication is key
Sisvel is investing heavily in developing an educational campaign for implementers new to patents and licensing. We hope others will do the same
By Sven Törringer
Last week, the US and UK IP offices announced a new collaboration on SEP policy matters. Working together, the two countries will “explore means to educate small and medium-sized enterprises seeking to implement or contribute to the development of technical interoperability standards”.
It’s a laudable goal and demonstrates a recognition that the rapid spread of IoT connectivity is bringing more and smaller companies into the licensing ecosystem.
Sisvel agrees wholeheartedly that awareness and education are the first step in addressing the major changes brought by IoT. Whatever their size, companies that develop exciting new use cases for cellular connectivity need to be made aware of the Inventive Loop that has powered telecoms innovation for decades.
But industry can’t wait for governments to shoulder this responsibility to educate.
If patents are to be seen as enablers rather than roadblocks, it is every stakeholder’s job to make sure that industries newly empowered by connectivity have a clear grasp of what standards are, where they come from and how patents support their continued development.
Sisvel’s educational campaign
Last week, Sisvel announced a new initiative to reach out to IoT companies with just this kind of information. As detailed in our press release, the campaign aims to provide simple introductions to concepts including patents, standards, licences and patent pools for those with no first-hand experience or specialist legal knowledge.
It also explains potential risks for companies that choose to ignore patents altogether – in clear and practical business terms rather than warning letter legalese.
We have put this information on a dedicated website – www.iotpatentpool.com – and we have invested significant resources in promoting it beyond the IP echo chamber, reaching the IoT community in the spaces where entrepreneurs discuss business challenges and solutions.
We’re in the very early stages of this effort. We expect it to build over time as awareness grows. But we know that we need to invest in outreach if we want this critical message to be heard outside our own industry.
A different approach
This initiative has its roots in the earliest days of Sisvel’s Cellular IoT programme. Everyone involved in setting up this pool recognised that it would require a new approach to communicating with potential licensees.
Most cellular licensing in the past has consisted of repeat transactions between large, sophisticated companies. They all have large legal departments capable of digesting warning letters, patent lists and licence offers and then executing the well-established ‘FRAND dance’.
The typical IoT company bears no resemblance to a smartphone giant. In a recent IAM interview, a representative of Nordic Semiconductor explained that the company has over 10,000 customers, many of whom have neither a legal department nor expertise in radio technologies. These companies serve a wide range of use cases and verticals, with product price points ranging from $10 to $1,000.
Cellular IoT technology also faces significant competition from other standards. If patents are perceived as a significant barrier to NB-IoT or LTE-M deployment, product makers will simply go elsewhere.
That means this pool is focused on growing the market, rather than achieving the highest possible royalty rate. As a result, it communicates with potential licensees in a very different way, starting with the first letter we send and continuing through our discussions over a licence.
Listening to the market
The educational aspect of this pool has not been a one-way street. Sisvel has also engaged deeply with the market and taken its feedback on board.
Last month, we announced pricing changes for the pool following discussions with implementers. The adjustment lowered rates in key segments, reflecting significant flexibility from a group of more than 30 patent owners drawn from every corner of the cellular ecosystem.
Speaking with both device makers and module manufacturers, the key thing we hear is that to build towards much higher product volumes, the industry needs greater predictability on cellular royalties so that the appropriate business cases can be built.
Through engaging with the market, we have also learned some of the common misconceptions IoT device makers have when it comes to patents. For example, many mistakenly believe that their suppliers have already acquired the necessary licences, or that they are adequately protected by indemnities. These are the types of issues we will continue to address through our communication campaign.
A beginning rather than an end
The licensing framework we announced with Nordic Semiconductor last month was a major landmark for the programme. The agreement should give IoT OEMs a level of comfort that Sisvel’s solution has buy-in from the entire supply chain, and it will open the door for us to bring our message to many more IoT device makers. But it is only the start.
Our broader communications outreach is also just beginning. We will continue to add material to www.iotpatentpool.com and will explore creating additional resources as we learn more about the concerns of those who are new to patents.
We hope more rights owners and licensing players follow us in making this effort. It’s not something any one entity can accomplish on its own. Together, though, we can move mountains. It is critical to the future of the patents and standards ecosystem that we do so.
Sven Törringer is Sisvel’s Cellular IoT programme manager
