Nortel's LTE Patent Licensing Play

May 8, 2008

Last month a group of vendors agreed to commit to a licensing framework, whereby they would license their patents relating to the next-generation wireless technology LTE, or Long-Term Evolution, according to “fair and reasonable” terms.

Long-Term Evolution is a 3GPP (third-generation partnership project) effort to enhance the next generation of UMTS with regard to cost, services, spectrum usage and interoperability.

The technology is designed to speed up network data transfer rates, enabling for example, faster video streaming, photo sharing, and music downloading.

The group which includes the likes of Alcatel-Lucent, Ericsson, NEC, NextWave Wireless, Nokia, Nokia Siemens Networks, and Sony Ericsson Mobile Communications most notably does not include Qualcomm, which earlier this year announced plans to develop LTE chipsets.

Now, in a move they hope will accelerate the global adoption of LTE by service providers, handset manufacturers and end-users, Nortel has announced a competitive royalty rate for its standards-essential patent claims for LTE handsets.

In a statement, Nortel said they will “license its LTE standards essential patent claims for LTE handsets at a royalty rate for approximately 1%, subject to reciprocity, defensive suspension, and grantback to Nortel products, services, and solutions, as well as other customary license terms and conditions.”

Nortel hopes that by publishing its patent royalty rates it will provide “increased transparency and predictability of IPR costs” which would eliminate any cost uncertainties in handset costs from stunting the adoption and growth of technologies like LTE.