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ZTE claims 7% of LTE essential patents

Chinese vendors gain significant IPR power, but Qualcomm and InterDigital still lead


Published: 11 January, 2011


Chinese vendors are determined to increase their share of patents as well as equipment sales at the 4G stage. ZTE is claiming to own 7% of the essential patents in LTE, only just behind compatriot Huawei and Ericsson, which last summer claimed a lead in IPR for the new standard.

Of course, the important issue for LTE vendors and buyers is not who owns a patent, but how they will charge for it, and that remains a thorny debate. Several patent pool operators are seeking to extend their activities to LTE, but some major IPR holders, such as Qualcomm, aim to stick with the 3G system of bilateral licensing agreements, which favor the largest patent owners. The Open Patent Alliance, which has been working on a pool system for WiMAX IPR, believes there is only a small window for an LTE pool to be established, before the traditional mobile suppliers get their way, potentially inflating device costs.

Companies like ZTE aim to be well positioned whatever shape LTE licensing takes. Huawei and ZTE had very little IPR power in 3G, but now claim to have 8% and 7%, respectively, of essential patents declared on IPR databases as of the end of November - in particular, the European ETSI database. As of the end of 2010, ZTE says it had submitted more than 6,800 proposals to the 3GPP standards body, of which more than 3,900 related to LTE/SAE, and it had made over 2,900 patent applications associated with LTE.

The firm aims to continue to file or acquire patents and increase its share of the evolving list of LTE essential IPR to 10% by 2012. One of the important sources of new assets for patent seekers will be the auction of Nortel's substantial wireless IPR soon, with Nokia, Apple and Microsoft all understood to be interested.

According to ZTE's analysis of the IPR databases, InterDigital is the leading holder of essential patents in LTE, with its Patent Holdings arm controlling 13% and its Technology unit 11%. Next comes Qualcomm with 13%, Nokia and Samsung on 9% each, Ericsson and Huawei on 8%, ZTE at 7%. LG, with 6%, and NTT DoCoMo with 5%, bring up the rear, while the remaining 11% is held by 'others'. The list indicates a stronger weighting towards Asian vendors than in 3G, where Qualcomm, Nokia, Ericsson and InterDigital were dominant.

In June, Ericsson said it had 25% of essential LTE patents, even though a survey by Informa had placed it behind InterDigital, Qualcomm, Samsung and Huawei. The Swedish giant said at the time that many IPR assessments were flawed because they did not distinguish between essential and other patents, or were based on patent applications alone.

ZTE said in a statement: "The company's share of LTE essential patents is a result of ZTE's continuous R&D investment into LTE related key technologies since 2004." It said it would "commit more R&D resources to accumulate essential patents and adopt a proactive approach in improving 4G and developing 4G+ standards. With LTE essential patents being evenly distributed among different vendors, we believe that it will be helpful to provide a comparatively healthy and balanced IPR licensing environment for the development of the 4G industry."

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