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[XGNews]: Behind Nokia’s intensive patent litigation war, there is a game between business and technology

The following is the [XGNews]: Behind Nokia’s intensive patent litigation war, there is a game between business and technology recommended by xgapn.com.

Nokia, which has been out of sight for a long time, has been losing in the mobile phone business, but it is enjoying the patent litigation.

Recently, it is reported that Nokia has launched patent infringement lawsuits against oppo, a mobile phone manufacturer, in Britain, France, India and other countries. The two companies signed a global 4G patent cross license agreement in November 2018. The focus of the dispute is how to collect the patent fee.

Oppo said in response to the media that Nokia advocated extremely unreasonable license fees, and made oppo make a step in the license negotiation through litigation, “oppo respects and protects its own and third party’s intellectual property rights, and opposes unreasonable negotiation behaviors such as litigation as a tool.”

In the field of communications, where technology patents are rampant, patent lawsuits are not uncommon. Among them, mobile phone manufacturers with annual shipments of hundreds of millions often become the “fat sheep” targeted by patent holders. In the past, Samsung, apple, Huawei, blackberry and other mobile phone manufacturers have had intensive and protracted patent lawsuits with suppliers such as Qualcomm, Ericsson and Nokia.

Behind the patent disputes, the patent litigation war in the field of communication is also a commercial secret war without smoke of gunpowder.

01

Although Nokia was frustrated in the transformation from function phones to smart phones, and its mobile phone business was frequently sold to Microsoft and HMD global, Nokia soon found the next easier business.

In the past decade, Nokia has launched a protracted “lawsuit war” against major mobile phone manufacturers around the world. Public information shows that Nokia has sued HTC, apple, Samsung, blackberry and other mobile phone companies.

Familiar with Nokia’s patent litigation is always the winner. Nokia frequently launched lawsuits because it has accumulated necessary patent technologies for 2G to 5g communication standards in the past decade.

According to the data released by Nokia in 2020, its R & D expenditure on innovation and standardization has reached 129 billion euros in the past 20 years, and the R & D expenditure will soar in 2019 due to 5g. In terms of the number of patents, Nokia is also overwhelming. In 2014, for example, the number of patents granted by Nokia is seven times that of apple and eight times that of HTC.

Obtaining high patent fees through various lawsuits and promoting patent cooperation agreements have become one of the main sources of income for Nokia, Ericsson or Qualcomm. Nokia has previously publicly said that in the two years from 2016 to 2018, Nokia’s cash income from patents exceeded 1.3 billion euros.

Qualcomm, Ericsson and Nokia rely more on cash technology research and development to collect fees, and some patent abuse chaos has also emerged in the industry. The business model of some “patent rogue” companies is like this: they are not engaged in technology research and development, but “rip off” the companies that use these patents by purchasing old patents that have not expired.

However, the main reason why patent litigation can appear frequently in the communication industry is that the communication technology patent itself is not a standard product, and there is a lot of bargaining space for the upstream and downstream patent billing methods.

Generally speaking, patent holders such as Qualcomm, Huawei and Ericsson set licensing rates based on the total price of a mobile phone. Take Qualcomm as an example. Mobile phone manufacturers using the chip not only pay for the purchase of the chip, but also pay an additional authorization fee of 5% of the total price of the mobile phone, which is known as “high pass tax” by the industry.

For Qualcomm, the more downstream mobile phones sell, the more they earn; However, for mobile phone manufacturers, the inevitable high cost of mobile terminals is also brought by Qualcomm, Ericsson and Nokia.

Intel once issued a report saying that the patent fees of a 4G mobile phone stack up, accounting for almost 30% of the price of the mobile phone — 4G mobile phones only need to be charged by Nokia, Qualcomm, Ericsson and interdigital in turn for cellular communication.

Starving mobile phone manufacturers and fattening patent holders. In 2020, for example, Nokia’s patent revenue accounted for 6% of the total revenue, reaching 11.19 billion yuan; Ericsson is 4%; With the “high tax” card, the patent revenue of various mobile phone companies accounts for an astonishing 21% of the total revenue.

02

For patent disputes, a few mobile phone companies adopt mild negotiation to solve them, but most mainstream mobile phone companies, including apple and Samsung, prefer to adopt fierce litigation to deal with them.

Patent litigation has always been a protracted tug of war. In the past, the constant drama is that after the appeal and trial, the defendant will choose to appeal one by one, and it often takes two years or even ten years to fight one case after another.

Whether it is Nokia, Qualcomm or Ericsson, the final outcome of the lawsuit is the same. Every mobile phone company will choose to compromise in the end and send hundreds of millions of euros of patent compensation to patent owners such as Nokia, Qualcomm and Ericsson, or sign a patent cooperation agreement.

Nevertheless, mobile phone companies, which are not short of money, have chosen to respond to the lawsuit in the past.

There is a paradox in the original charging mode. Mobile phone is the product of multiple hardware combinations. Whether it sells well or not is not decided by a single hardware. Apple had previously expressed the aspirations of many mobile phone manufacturers in a protracted chip patent lawsuit with Qualcomm. At that time, apple proposed that the iPhone had raised the price of the whole machine through the introduction of revolutionary innovations such as touch ID, which had nothing to do with Qualcomm, but Apple had to pay higher patent fees for it.

In fact, mainstream mobile phone companies are not short of money. For mobile phone companies, in fact, it’s not very important to win or lose individual lawsuits. Money should be paid back. However, if the litigation time is prolonged, the impact on the patentee’s income will be different.

The previous case is that when the lawsuit falls into a seesaw war, it may seriously affect the patience of patentees and investors. On the day Nokia announced its lawsuit against apple in 2016, Nokia’s share price fell by more than 4%. At that time, some analysts believed that the legal proceedings between Nokia and Apple might be delayed for many years, thus affecting Nokia’s royalty income.

Nokia, Ericsson and other companies have a certain gap in market value compared with apple and Samsung. Time is one of the weapons for mobile phone manufacturers to fight back.

Source: iplystics

But on the other hand, mobile phone companies are also stepping up patent registration to reverse the passive position of patents.

According to the data provided by oppo, as of the first half of this year, the number of global patent applications in oppo exceeded 65000, and the number of invention patent applications exceeded 58000, accounting for 90% of all patent applications. Earlier, when oppo was sued by sharp in overseas areas, oppo countersued sharp in Tokyo, Japan, for infringing its flash charging technology patents, and continued to file invalid applications for many patents of sharp China.

There is no eternal enemy in the business world. Under the trend of interests, even apple, Microsoft and Ericsson can turn enemies into friends and form a patent community.

Apple had previously formed a “Rockstar” organization with Ericsson, Microsoft, blackberry, Sony and other companies. Nearly ten thousand patents were taken from the bankrupt Nortel Networks of Canada. The agency turned to sue Google, HTC, Samsung and other Android companies. Google has also publicly accused Rockstar of being “a patent hooligan supported by apple.”.

From the perspective of patent holding companies, it seems that cracking down on patent abuse is a necessary means to maintain technological belief, but also a means to make money.

But in the final analysis, behind the intensive patent disputes in the communication industry is not only a game between technology R & D and business returns, but also a fight for the right to speak. In the 5g era, the competition will be even more fierce.

The article comes from: https://www.36kr.com/p/1306479393409414

XGApn.com is a website about 5G, 6G and network communications. We not only provide apn/mms settings for major operators, but also provide the latest developments in telecommunications, terminals, and industry development.

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