Organization Strives to Reduce Cost & Complexity in Licensing WiMAX Technology

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The WiMAX industry reached another milestone this week with regards to the
handling of patents and intellectual property rights (IPR) among WiMAX
companies. On Monday, the Open Patent Alliance (OPA) issued a formal call for
patents – asking companies with relevant IPR to submit them to the independent
board for review.

The Open Patent Alliance (OPA) is an industry-led group that supports the
development and widespread adoption of WiMAX technology by establishing a
structure to create fair and transparent licensing of 4G IP-based technologies.

In some sense, the announcement may seem somewhat anti-climactic given that much
of the heavy lifting had already been accomplished by getting the buy-in of many
of the existing companies that have WiMAX IPR. Current participating OPA members
include Acer, Alcatel-Lucent, Alvarion, Cisco, Clearwire, Huawei Technologies,
Intel Corporation, and Samsung Electronics, as well as newly announced associate
members Beceem, GCT Semiconductor, Sequans, and UQ Communications. Participating
organizations range from semi-conductor companies, device and infrastructure
manufactures to service providers.

Also this week, the OPA announced that it has selected Via Licensing Corporation
to facilitate the formation and administration of the license pool. The company,
an independent organization with access to technology resources, will act as a
"patent referee" evaluating the claims submitted by WiMAX patent holders.

The WiMAX patent pool is similar to models used with other technologies such as
MPEG. Once a call for patents is issued, companies may confidentially submit
their claims to a patent administrator who will test for "essentiality."
Companies that are deemed to have relevant IPR by the administrator are invited
to participate in the process, during which negotiations will occur. The end
result is consensus and licensing rules for those participating in the pool, a
process that typically takes 12-18 months from the first call for patents.

"The advantages of a patent pool is that is provides transparency among
intellectual property rights (IPR) for across the ecosystem," says OPA President
Yung Hahn. "It reduces overall risk for those looking to develop WiMAX products
and devices by making it more predictable and transparent."

But what about companies that choose not to participate? Two notable exceptions
- Motorola and ZTE, both with significant WiMAX activity, are conspicuously
absent from the group.

"A lot of people think that you have to achieve consensus before you can form
the pool," says Hahn. "That is actually not the case. The only requirement is
that each of these companies get a say and get to express their view on the
various positions."

Companies that choose not to participate in the pool would likely seek to form
separate bi-lateral license agreements with other companies. These agreements,
however, can slow innovation and adoption by driving up the cost of licensing
and increasing the overall licensing process. Details of the agreements are also
confidential and covered by NDAs.

"We are not trying to replace the bi-lateral agreements – we believe they have a
place and support that. But we believe if you use bi-lateral in conjunction with
patent pools, you get them done quicker with broader coverage and less effort."

Another advantage of a patent pool is that it provides a market indicator of
reasonable licensee fees. If participation is strong and a significant amount of
IP is collected, the pool can become a basis for disputes and litigation. "One
of the things that we are trying to achieve is to create a market reference
point for what is a fair and reasonable IPR framework," says Hahn. "If you
create a pool and have a significant portion of IP in the pool, when you have
disputes about what is fair and reasonable, the pool becomes a very credible
market reference point."

Another question that often comes up is how the WiMAX licensing process will
compare to other technologies such as LTE. The general consensus is that WiMAX
IPR is more broadly held than LTE and therefore easier to form a pool when you
have a larger number of owners, than when it is more concentrated. Further
complicating things, a number of organizations on the LTE side have separately
begun to make separate calls for patents.

"There are several different ways to do this," says Hahn. "In LTE, 3 separate
groups have conducted patent calls without necessarily getting the backing of
key companies and are going to use that process to secure the comments. We have
done it the other way around – we went and secured commitments from 8 companies,
plus we just announced 4 associate members for a total of 12. For us the patent
call is the end of the process rather than the beginning of the process."

"It’s kind of like the Tortoise and the Hare analogy," say Hahn. " It’s not so
important how you start, but how you finish."