5G SEP spike hides number of truly essential patents, says study
Report finds declarations to ETSI increase ‘exponentially’ in four years, but number of truly essential 5G granted patents are limited | Huawei and Qualcomm top list of 5G declared families | Average quality of owned patents varies ‘significantly’.
The total number of 5G patents declared essential has grown “exponentially” since 2019, according to a report published yesterday, February 19.
However, the percentage of “truly essential” 5G patents that are both declared and granted is substantially lower, according to the study.
The report, from PA Consulting, reveals that Huawei, Qualcomm, and BBK Electronics (including Oppo and Vivo) dominate the list for current ownership of 5G patent families with at least one granted family member in the five major IP offices, followed by Samsung, LG, and ZTE.
To illustrate the difference between declared and granted 5G patent families globally, Qualcomm appears to own the most, with 9,662 declared. But only 4,552 of those are granted (in the five largest patent markets of the US, Europe, China, Korea and Japan).
But despite a near 500% increase in the number of patents declared to ETSI over the past four years, the actual picture of who owns the dominant market share in truly essential SEPs used in devices is unclear.
Technical reviews
“Given the large number of patent families declared as potentially essential to 5G ETSI [European Telecommunications Standards Institute] technical specifications, an exhaustive analysis of all declared patent families was not practical,” explained the report authors.
“So we followed a stratified sample-based approach for the SEP essentiality patent ranking by performing technical reviews on each declaring company.”
PA found “considerable variation” in the relative holding of essential patents, which authors say results in a level of uncertainty for both SEP licensors and licensees.
“Many companies own SEPs they claim are ‘essential’ to wireless telecom standards. However, not all patents are truly essential,” said the report authors. “There’s a great deal of uncertainty about which of the declaring companies own essential patents and which have the dominant share.”
It added that the mass adoption of 5G technology means it is becoming increasingly sensitive to cost and availability.
“To ensure fair competition and to foster continued advancements within the telecommunications sector, it is crucial to have transparency around the true number of SEPs owned by each company.”
This, it asserts, 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.”
“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 licensing negotiations around the world.”
Unique disclosures
According to the report, the number of unique patent disclosures relevant to 5G and made to ETSI between March 2019 and October 2023, increased from 18,545 to 108,638—a jump of 486%.
PA also identified 48,015 patent families with at least one granted patent in the US, Europe, China, Korea and Japan by October 2023, up from 5,903 in 2019—a 713% increase.
Within this number, the ten largest patent holders collectively hold approximately 78% of the identified 5G patent universe, said PA.
The 30 middle patent holders collectively hold more than 20% of the identified 5G patent universe. The remaining patent holders collectively hold more than 1%.
Other key findings show that Huawei and Qualcomm now hold the top positions for all patent families declared to ETSI (including those with patent publications and pending applications), while Nokia and NTT Docomo have dropped.
The report also found that, 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, while BBK Electronics (including Oppo and Vivo), Huawei, KT Corporation, Langbo, and LG have the lowest essentiality rates.
‘Objective analysis’
Sireesha Ancha, intellectual property lead at PA Consulting, said that the company offers transparency of SEPs through “comprehensive, objective analysis” of the essentiality of patents in 5G technology and other telecommunications technology domains.
“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 SEPs domain, where declarations to ETSI have increased exponentially in recent years.
“This ultimately gives rise to more challenges in 5G SEP licensing. Whilst holders of SEPs must be prepared to grant licences under fair, reasonable, and non-discriminatory [FRAND] terms and conditions, patent declarations to ETSI generally provide little information about the true essentiality rate and the current SEP ownership status.”
According to PA, its research is conducted independently by in-house wireless telecom engineers with expertise in implementing technologies pertinent to 5G.
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