2G & 3G Mobile Communication
Transcript of 2G & 3G Mobile Communication
2G & 3G Mobile Communication
© iRunway 2013 Confidential Page 2 of 26
Contents
1 Executive Summary ................................................................................................................. 3
2 Introduction ............................................................................................................................. 4
2.1 Overview of 2G & 3G Technology ............................................................................................................... 4
2.2 Technical Highlights of 2G & 3G .................................................................................................................. 4
2.3 Comparative Study of 2G, 3G & 4G-LTE ...................................................................................................... 5
3 Analysis of the 2G & 3G Patent Landscape ............................................................................. 7
3.1 Patent Categories & Distribution ................................................................................................................ 7
3.2 Top Patent Holders ...................................................................................................................................... 7
3.3 Analysis of Seminal Patents ......................................................................................................................... 9
3.4 Analysis of Standard-Essential Patents ..................................................................................................... 12
3.5 Patent Filing and Grant Trends .................................................................................................................. 14
4 Key Players in the 2G & 3G Patent Landscape ...................................................................... 15
4.1 Ericsson ...................................................................................................................................................... 15
4.2 Nokia .......................................................................................................................................................... 16
4.3 Qualcomm ................................................................................................................................................. 17
4.4 Alcatel-Lucent ............................................................................................................................................ 18
4.5 Samsung .................................................................................................................................................... 19
5 Monetization of 2G & 3G Patents ......................................................................................... 20
5.1 Potential Licensing & Litigation of 2G & 3G Patents ................................................................................. 21
6 Glossary of Terms .................................................................................................................. 24
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1 Executive Summary
Emerging technologies such as 4G-LTE attract the lion‟s share of industry and media
attention. However, 2G and 3G wireless networks remain highly relevant, currently
supporting over 80% of all mobile phone activity. Trends suggest the use of 2G and 3G
technologies will expand dramatically during the next three to five years as the world‟s two
largest markets, India and China, open their doors wide to mobile phone usage.
Ericsson, Nokia, Qualcomm and Alcatel-Lucent are among those who developed the building
blocks of today‟s wireless world. They collectively control the majority of all patents in this
space. Nokia, LG Electronics and Qualcomm alone own more than 43 percent of all
“seminal” patents (i.e., determined to be strong based on a set of parameters). The playing
field has evolved dramatically in recent years, causing these brands to slowly fade from the
minds of consumers. However, they will continue to exert an influence on current market
leaders such as Apple, Google and Samsung, who control today‟s mobile device ecosystem.
2G and 3G technology patents have been at the center of ongoing patent wars and they can
be expected to fuel a significant escalation in activity during the next five years as top
patent holders seek to monetize their portfolios. Leading patent holders have already
launched initiatives against major competitors, with some having sold patent rights to
various companies. It is highly likely, given the increasing pressure on these companies to
generate revenue, that many will become more aggressive by entering into new agreements
with “patent privateers” to monetize their assets. The result will likely be an increase in
litigation and licensing.
So, who stands to benefit in this evolving marketplace? Which companies control the largest
number of patents and the largest number of seminal patents in the world of 2G and 3G
technologies? Which companies are best positioned to leverage monetization efforts? These
are some of the questions addressed in this report.
We explore key 2G and 3G patent holders, providing details on the number and category of
overall, standard-essential and seminal patents. The report delves into companies that
control a large percentage of seminal and standard-essential patents. Nearly nine percent of
seminal 2G and 3G patents are currently held by certain companies, and approximately five
percent of all standard-essential patents are held by two companies - Innovative Sonic Ltd.
and Vringo Infrastructure Inc. This report also reveals that these companies that hold key
2G and 3G patents have remarkably high patent monetization potential.
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2 Introduction
2.1 Overview of 2G & 3G Technology
2G was commercially launched in 1991. It introduced digital signaling via packet data in
telecommunications, and provided reduced power consumption and noise levels. It also
proposed better security methods with digital encryption techniques coupled with lower
power usage. SMS, MMS and e-mail were a few packet-based services introduced by 2G.
Although highly advanced markets have reached a stage where 2G networks are now being
switched off, 2G technologies still account for over 80 percent of connections in China and
90 percent in India - the two largest mobile markets in the world.
With successive technologies such as 2.5G, 2.75G and 3G, the era of ever-increasing data
rate demands skyrocketed across the globe. While packet data was introduced in 2G, higher
data rates and better data services were brought by 3G. Attractive services such as Mobile
TV, Video on Demand, Video Conferencing, Location-Based Services and Global Positioning
System (GPS) gradually grew into a necessity for a majority of mobile users. Statistics1
suggest that, as of 2012, more than 500 operators across 185 countries have deployed 3G
networks, pointing to the fact that mobile users in more than three-quarters of the world‟s
markets have access to 3G services.
2.2 Technical Highlights of 2G & 3G
The 2G Advantage
Lower power consumption, better security and better bandwidth usage are the key
advantages of 2G over its precedent technologies. 2G introduced digital encoding in
telecommunications, resulting in better compression and multiplexing of voice data than its
preceding analog encoding. The advantage: 2G supported a larger number of calls in the
same radio bandwidth and ensured lower power consumption that improved battery life in
mobile phones.
Digital encryption methods introduced in 2G provided better security and privacy to mobile
users. Short Message Service (SMS) and Multimedia Message Service (MMS) became the
first form of packet-based services introduced in 2G, marking the beginning of data services
on mobile phones.
1 https://gsmaintelligence.com/analysis/2012/11/half-of-all-mobile-connections-running-on-3g-4g-networks-by-
2017/359/
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The 3G Advantage
3G entered the market with the advantage of increased data rates available to mobile users
for services such as Mobile TV, Location-Based Services, video calls and internet browsing
on the move. It also provides variable data transfer speeds ranging from 128 kbps to 3
mbps depending on the speed with which the mobile device is moving within the network.
Beyond mobile telephony, the higher speeds allowed 3G connections in PCs, gaming
consoles, tablets and any other portable device that could benefit from a faster and higher-
quality internet connection. 3G also provides users with better security through user
authentication capabilities when communicating with other wireless devices.
3G boasts of better power control methods for both uplink and downlink, with the network
using a target Signal-to-Interference Ratio (SIR) to adjust its output power. It also
improves spectrum utilization through shared channels in the radio interface, thus making it
more effective than 2G networks.
2.3 Comparative Study of 2G, 3G & 4G-LTE
2G 3G 4G-LTE
Services
Introduced
Data services such as
text messaging
(SMS), multimedia
messaging (MMS),
internet access & SIM
cards.
Term „mobile
broadband‟ introduced
because of its speed &
capability.
Universal access &
portability across
different device types.
High definition
streaming & IPV6 support.
Throughput/
Speed 9.6/14.4 Kbps.
3.1 Mbps (peak)/
500-700 Kbps.
100-300 Mbps (peak)/
3-5 Mbps.
Technology
GSM - Global System
for Mobile
Communication with
technological
backbone of TDMA
(similar to FDMA).
UMTS as its core
network architecture
with HSPA protocol.
E-UTRA (Evolved UMTS
Terrestrial Radio Access)
as the air interface for
LTE. Additionally, uses a
technology
called MIMO where the
modem uses two separate
antennas simultaneously
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to deliver super-fast
speed.
Standards GSM, GPRS (2.5G) &
EDGE (2.75G).
UMTS & CDMA-2000
standards.
Multiple radio standards
unified into a single IP
network.
Voice & Data
Support
Voice & data could
not be simultaneously
supported.
Simultaneous voice &
data support.
Simultaneous voice & data
support at higher data
rates.
Switching
Techniques
Consists of only
circuit-switched
networks.
Uses a combination of
both circuit-switched &
packet-switched
networks.
Uses only packet-switched
networks, thus lowering
latency and enhancing call
quality.
Frequency
Band
Initially 900MHz
spectrum was used,
but later GSM was
introduced on an
1800MHz band.
1.8 – 2.5 GHz. 2 – 8 GHz.
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3 Analysis of the 2G & 3G Patent Landscape
3.1 Patent Categories & Distribution
Around 17,268 U.S. patents have been granted in the 2G and 3G domain. The following
technology categories were identified based on our analysis of the patent landscape:
Level 1 Categories Level 2 Categories Number of U.S.
Patents
Communication Quality (3840)
Backhaul Network 2886
Congestion Control 577
Handover 377
Data Transfer Rate (3871)
Error Control 437
Link Adaptation 304
Shared Traffic Channels 1758
Spreading Codes 942
Transmit Diversity 430
Positioning (1576)
Network Based 292
User Equipment Assisted 1102
User Equipment Based 182
Power Management (1829) Continuous Packet Connectivity 1197
Power Control 632
Security (4714) Access Control 1648
Encryption 3066
Services (1438) Location-Based Services 139
Value-Added Services 1299
Table 1: Level 1 & Level 2 technology categories with number of granted U.S. patents
3.2 Top Patent Holders
The top companies in the 2G and 3G landscape with respect to their portfolio size are shown
in Figure 1.
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Figure 1: 2G & 3G Patent Distribution of Top Companies
(Source: iRunway analysis based on patent data from USPTO)
* The patent portfolio previously owned by Nortel Networks was acquired by Rockstar
Consortium, a patent licensing company that owns and manages a portfolio of more than
4,000 patents.
Table 2 shows the distribution of patents for the top companies across categories:
Company
Patent Distribution across Level 1 Categories
Comm.
Quality
Data
Transfer Rate Positioning
Power
Management Security Services Total
Ericsson 274 415 94 241 269 211 1504
Nokia 213 272 163 196 381 138 1363
Qualcomm 135 230 108 211 203 28 915
Alcatel-Lucent 229 195 25 83 161 100 793
Samsung 162 299 27 37 84 44 653
AT&T 182 30 33 31 267 95 638
Research in Motion 14 72 12 24 464 12 598
LG 26 387 55 30 57 29 584
Cisco 158 2 7 14 300 7 488
InterDigital 31 300 8 88 29 6 462
Motorola Solutions 58 57 37 74 87 40 353
Nortel Networks* 114 56 32 36 73 35 346
Total 1596 2315 601 1065 2375 745 8697
Table 2: Patent distribution of top companies across Level 1 categories
15041363
915793
653 638 598 584488 462
353 346
0
400
800
1200
1600N
o. o
f Pa
ten
ts
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Figure 2 below displays the technology evolution tree for the Level 1 categories, with each
circle representing the number of patents filed in the corresponding year in each individual
category.
Figure 2: Technology Evolution Tree of 2G & 3G U.S. Patent Filings
(Source: iRunway analysis based on patent data from USPTO)
3.3 Analysis of Seminal Patents
The entire 2G and 3G portfolio was analyzed and ranked using iRunway‟s portfolio analysis
solution – COMPASSSM. A list of seminal 2G and 3G patents was generated based on a
combination of manual research and a proprietary algorithm for strength calculation. The
seminal patent set constituted the top 5% of ranked patents. The strength of the patents
was determined based on multiple parameters such as infringement detection, number of
independent and dependent claims, technology activity rate, backward and forward
references, age of the patent, etc.
Table 3 illustrates the patent distribution for top seminal patent holders, their share of
seminal patents and their share of all 2G and 3G patents:
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Company Name
Count of
Seminal
patents
Share of
Seminal
patents
Count of All
2G & 3G
patents
Share of All
2G & 3G
patents
Nokia 143 16.55% 1363 7.89%
LG 118 13.66% 584 3.38%
Qualcomm 113 13.08% 915 5.30%
Ericsson 51 5.90% 1504 8.71%
InterDigital 48 5.56% 462 2.68%
Alcatel-Lucent 45 5.21% 793 4.59%
Samsung 21 2.43% 653 3.78%
Siemens 17 1.97% 144 0.83%
Nokia Siemens Networks 15 1.74% 173 1.00%
Research in Motion 14 1.62% 598 3.46%
Broadcom 13 1.50% 309 1.79%
Sony Corp 12 1.39% 121 0.70%
Cisco 12 1.39% 488 2.83%
France Telecom 11 1.27% 45 0.26%
Vringo Infrastructure Inc. 10 1.16% 74 0.43%
Nortel Networks* 10 1.16% 346 2.00%
General Dynamics 10 1.16% 34 0.20%
Philips Electronics 7 0.81% 47 0.27%
Table 3: Top Seminal Patent Holders
(Source: iRunway analysis based on patent data from USPTO)
Nokia, LG and Qualcomm hold very strong patents in the 2G and 3G domain. While the top
six companies listed in the table above collectively hold 60% of all seminal patents, these
three companies alone own a combined share of 43%.
In order to better understand the strength and quality of the portfolios that companies hold,
iRunway analyzed the ratio of the number of seminal patents to their respective portfolio
sizes. Figure 3 shows this metric for the top seminal patent holders:
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Figure 3: Percentage of Seminal Patents in the Portfolio of Each Company
(Source: iRunway analysis based on patent data from USPTO)
Analysis of this metric revealed certain interesting insights. Beyond the top patent holders
(by portfolio size), certain smaller companies hold key patents in the 2G and 3G domain. In
fact, companies having a smaller portfolio but with a higher percentage of seminal patents
could be viewed as having higher patent monetization potential. Also:
LG holds a significantly stronger portfolio compared to other large players in the
industry.
With a relatively high number of seminal patents, companies such as Vringo and General
Dynamics could be viewed as having a small, yet strong, patent portfolio.
Table 4 shows the distribution of seminal patents for top companies across categories:
Company
Distribution of Seminal Patents across Categories
Comm.
Quality
Data
Transfer Rate Positioning
Power
Management Security Services Total
Nokia 16 25 3 13 59 27 143
LG 0 109 0 3 5 1 118
Qualcomm 17 24 1 21 41 9 113
Ericsson 12 12 0 6 18 3 51
InterDigital 5 29 2 3 7 2 48
Alcatel-Lucent 10 13 1 3 13 5 45
Samsung 1 16 0 1 1 2 21
Siemens 3 6 0 0 6 2 17
10%
20%
12%
3%
10%
6%3%
12%9%
2%4%
10%
2%
24%
14%
3%
29%
15%
0%
5%
10%
15%
20%
25%
30%
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Nokia Siemens Networks 1 3 0 1 6 4 15
Research in Motion 0 2 0 1 11 0 14
Broadcom 6 2 1 0 4 0 13
Sony 1 4 1 0 4 2 12
Cisco 3 0 0 0 9 0 12
France Telecom 1 0 0 0 8 2 11
Vringo Infrastructure Inc. 2 0 0 2 3 3 10
Nortel Networks* 2 1 0 0 7 0 10
General Dynamics 1 7 0 0 2 0 10
Philips Electronics 2 1 0 3 1 0 7
Total 83 254 9 57 205 62 670
Table 4: Distribution of Seminal Patents across Categories
(Source: iRunway analysis based on patent data from USPTO)
3.4 Analysis of Standard-Essential Patents
A standard-essential patent in this study is one for which it has been declared (by the
patent holder or the standards organization) that practicing one or more of the inventions
set forth therein is required in order to comply with a technical standard published by a
standards organization in the telecommunications industry. The European
Telecommunications Standards Institute (ETSI) is one such standards organization that
extensively covers telecom patents.
In our research, we analyzed 854 patents (out of the total portfolio count of 17,268) that
have been declared standard-essential by ETSI. These 854 patents are hereinafter referred
to as „standard-essential patents‟. Table 5 illustrates the top standard-essential patent
holders in the 2G and 3G landscape across categories.
Company
Standard-Essential Patent Distribution across Categories
Comm.
Quality
Data
Transfer Rate Positioning
Power
Management Security Services Total
Nokia 39 73 10 32 54 19 227
Qualcomm 19 50 20 24 33 0 146
Ericsson 12 34 5 19 11 4 85
Samsung 3 47 0 6 0 1 57
LG 0 35 0 0 3 0 38
InterDigital 0 19 0 15 1 0 35
Nokia Siemens Networks 5 10 2 3 11 2 33
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Nortel Networks* 1 11 2 3 5 0 22
Vringo Infrastructure Inc. 6 1 3 3 3 3 19
Innovative Sonic Limited 0 16 0 1 2 0 19
NTT 0 15 0 3 0 0 18
Motorola Solutions Inc. 1 6 0 9 0 0 16
Huawei 2 3 0 1 7 2 15
Research in Motion 0 0 0 2 12 0 14
Total 88 320 42 121 142 31 744
Table 5: Distribution of Top Standard-Essential Patent Holders across Categories
(Source: iRunway analysis based on patent data from ETSI & USPTO)
80% of all standard-essential patents are owned by the top ten companies on the list.
Nokia leads the list and owns 26% of all standard-essential patents. It has 55% more
standard-essential patents than Qualcomm, which stands second on the list.
Qualcomm and Ericsson together own 27% of all standard-essential patents.
An analysis of the percentage of standard-essential patents in the portfolio of each company
was done to understand the quality of the portfolio. Figure 4 shows this percentage for top
companies that hold standard-essential patents:
Figure 4: Percentage of Standard-Essential Patents in the Portfolio of Each Company
(Source: iRunway analysis based on patent data from ETSI & USPTO)
Innovative Sonic with 53% and Vringo with 26% have the highest proportion of
standard-essential patents in their portfolios. Note that Vringo also had a high
percentage of seminal patents in its portfolio.
17% 16%
6% 9% 7% 8%
19%
6%
26%
53%
7% 5% 8%2%
0%
10%
20%
30%
40%
50%
60%
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3.5 Patent Filing and Grant Trends
Figure 5 shows the 2G and 3G patent filing trends of the top 5 companies from 1993-2009:
Figure 5: Patent filing trend of the top 5 companies
Figure 6 shows the 2G and 3G patent grant trend of the top 5 companies from 1995-2012:
Figure 6: Patent grant trend of the top 5 companies
Ericsson started investing in 2G and 3G technology early, and filed a large number of
patent applications as early as 1994.
Nokia accelerated and substantially increased its 2G and 3G IP investments between
1997 and 2005. In the last few years, Ericsson and LG have shown an increase in the
number of patent filings, in comparison to the others on the list.
0
50
100
150
200
250
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Nu
mb
er
of
Pat
en
ts
Filing Year
Alcatel-Lucent Ericsson Nokia Qualcomm Samsung
0
50
100
150
200
250
300
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Nu
mb
er
of
Pat
en
ts
Year of Issuance
Alcatel-Lucent Ericsson Nokia Qualcomm Samsung
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4 Key Players in the 2G & 3G Patent Landscape
4.1 Ericsson
Ericsson focused its 2G and 3G patent investments in the domain of Security, Power
Management and Data Transfer Rate, and has over 1,500 U.S. patents. It has a strong
presence in the Communication Quality and Services domains.
Ericsson started its research and IP investments on 2G and 3G ahead of all other
companies and owns the largest portfolio in this field. The company also has a good
number of seminal and standard-essential patents.
Ericsson and Samsung entered into a license agreement on mobile technology in 2002,
wherein Ericsson granted Samsung a non-exclusive worldwide license to its patent
portfolio for GSM, TDMA, GPRS, EDGE and WCDMA mobile standards2.
Figure 7: Technology Evolution Tree of Ericsson’s 2G & 3G U.S. Patent Filings
(Source: iRunway analysis based on patent data from USPTO)
2 www.edn.com/Pdf/ViewPdf?contentItemId=4347452
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4.2 Nokia
Nokia holds the most number of seminal patents (roughly 17%) and owns patents in all
key technologies related to 2G and 3G, especially in Communication Quality, Data
Transfer and Security. It also owns the most number of standard-essential patents
(227), and has strength in the Data Transfer Rate and Security domains.
The company has been actively involved in monetization through patent sales. .
Recently, Nokia sold around 500 of its global patents to Vringo, which includes 109 U.S.
patents covering 2G, 3G and 4G technology3.
In September, 2011, MOSAID Technologies Inc. acquired Core Wireless Licensing, which
had a portfolio of roughly 2,000 global wireless patents and applications, including 2G
and 3G patents originally filed by Nokia4.
Nokia and Qualcomm, market leaders in this domain, entered into a 15-year patent
licensing agreement in 2008, which gave Nokia access to all of Qualcomm‟s patents5.
Figure 8: Technology Evolution Tree of Nokia’s 2G & 3G U.S. Patent Filings
(Source: iRunway analysis based on patent data from USPTO)
3 http://www.phonearena.com/news/Nokia-sells-500-patents-to-Vringo-for-22-million_id33162 4 http://www.mosaid.com/corporate/news-events/releases-2011/110901.php 5 http://www.qualcomm.com/media/releases/2008/07/23/nokia-and-qualcomm-enter-new-agreement
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4.3 Qualcomm
Qualcomm has a significant number of patents and patent applications worldwide in
CDMA, OFDMA and other technologies. It also owns a nearly 13% share of all seminal
patents in the 2G and 3G space, standing third to Nokia and LG.
Qualcomm has the second highest number of standard-essential patents (146). It is the
leading patent holder of core patents in advanced 3G mobile technologies, as well as in
CDMA and WCDMA standards6.
CDMA2000 1X EV-DO and later revisions use Qualcomm‟s High Data Rate (HDR) system
to support packet data rates of up to 2.4 Mbps. Rapid expansion and adoption of CDMA
and OFDMA worldwide has ensured uniform growth of license and royalty revenues for
the company since the mid-1990s7.
Figure 9: Technology Evolution Tree of Qualcomm’s 2G & 3G U.S. Patent Filings
(Source: iRunway analysis based on patent data from USPTO)
6 http://www.qualcomm.com/about/businesses/qtl, http://www.aqsacom.com/resources/pdf/LI-3G-4G-
AQSA_WP_2012_01.pdf 7 http://www.qualcomm.com/about/businesses/qtl
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4.4 Alcatel-Lucent
Alcatel has been a popular name in the telecommunications industry from the early
1990s, long before its merger with Lucent Technologies.
It has focused its patenting efforts in the Communication Quality, Data Transfer Rate
and Security domains, owning strong patents in these domains.
It is one of the top five companies owning the most number of 2G and 3G patents, and
figures among the top six companies holding the most number of seminal patents.
The company plans to continue to raise funds by licensing its patent portfolio, and has
joined hands with RPX Corporation8.
Figure 10: Technology Evolution Tree of Alcatel-Lucent’s 2G & 3G U.S. Patent Filings
(Source: iRunway analysis based on patent data from USPTO)
8 http://www.theregister.co.uk/2012/02/14/alcalu_sells_patents/
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4.5 Samsung
Samsung has been a key player in the overall telecommunications market for a long
time, and owns a significant number of patents relating to Communication Quality and
Data Transfer Rate.
9% of the total number of its 2G and 3G patents is declared standard-essential.
Samsung was relatively late in entering the 2G and 3G market and only accelerated its
research in the late 1990s. However, the filing and grant trends reveal that, since then,
the company‟s research in this space is steadily increasing.
Figure 11: Technology Evolution Tree of Samsung’s 2G & 3G U.S. Patent Filings
(Source: iRunway analysis based on patent data from USPTO)
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5 Monetization of 2G & 3G Patents
The last decade has witnessed an increase in patent infringement lawsuits in the
telecommunications industry. Often referred to as “Patent Wars”, these legal battles are
predicted to continue at a more active pace in the near future.
It all started in the mid-2000s when the 2G market was growing at a steady pace and all
companies holding significant IP in this field started looking at monetization options. The
major market players sued each other over various technologies, often with the aim to
remove a competitor‟s product from the market. These cases, interestingly, worked both
ways, and a majority of them resulted in cross-licensing deals between the litigants.
Companies also entered the market through acquisition of strong patents, attracting
attention from several industry players who were prepared to shell out millions to own such
IP. Here are some examples:
One important case involving multinational companies was the lawsuit between Ericsson
and Samsung. In early 20139, Samsung answered Ericsson‟s claims of patent
infringement by countersuing the Swedish multinational, alleging infringement of 20 of
Samsung‟s patents, including those related to 2G and 3G wireless standards and device
functions. In the same year, Ericsson entered into a licensing deal relating to 2G, 3G and
LTE technologies with Unwired Planet.
In 2007, Qualcomm filed patent infringement lawsuits against Nokia in GSM technology.
Following this, Nokia paid licensing fees to access all of Qualcomm‟s patents10.
Brandywine Labs has sued over 39 service providers to date, including AT&T, Verizon
and Century Link, over DSL patents11.
In 2012, a group of eight telecom service providers, including Alcatel-Lucent and
EarthLink, entered into separate patent agreements with visual voicemail provider
Klausner Technologies for its consumer and enterprise visual voicemail technologies12.
Fractus, a company that designs and manufactures antennas for mobile handsets and
wireless devices, filed lawsuits in 2009 against ten mobile phone companies, claiming
9 http://online.wsj.com/article/SB10001424127887324103504578371902710149908.html 10 http://www.pcworld.com/article/148850/article.html 11 http://www.fiercetelecom.com/story/att-verizon-and-centurylink-embroiled-adsl-patent-fight-brandywine/2013-
01-03 12 http://www.fiercetelecom.com/story/earthlink-alcatel-lucent-among-providers-settle-voicemail-patent-suits-
klau/2012-05-18
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infringement of its patents covering internal multiband antennas common to all cell
phones, tablets, laptops, navigation devices and other wireless portable devices13.
In 2013, InterDigital filed lawsuits against Samsung, Nokia, Huawei and ZTE claiming
infringement of patents applicable to wireless devices with 3G and 4G capabilities14.
In 2013, Ericsson has sued Micromax, an Indian tablet and Smartphone maker, alleging
infringement of patents that cover wireless technologies15.
5.1 Potential Licensing & Litigation of 2G & 3G Patents
It is interesting to note that almost 9% of seminal 2G and 3G patents are held by few
companies. About 5% of all standard-essential patents are owned by Innovative Sonic Ltd.
and Vringo Infrastructure Inc. Table 6 shows the total count of issued U.S. patents of some
of the active companies in this sector, including their ownership of seminal and standard-
essential patents, and the percentage of seminal and standard-essential patents in their
respective portfolios:
Company Total
Count
Count of
Seminal
Patents
% of
Seminal
Patents in
Portfolio
Count of
Standard
Essential
Patents
% of
Standard
Essential
Patents in
Portfolio
Vringo Infrastructure Inc. 74 10 13.5% 19 25.7%
Core Wireless Licensing 12 6 50.0% 1 8.3%
Pendrell Corporation 39 5 12.8% 0 0%
Gemalto 15 4 26.7% 0 0%
Intellectual Ventures 13 3 23.1% 0 0%
Table 6: U.S. Patent distribution of Few Companies
(Source: iRunway analysis based on patent data from ETSI & USPTO)
Vringo Infrastructure Inc.
Vringo works on development and monetization of mobile technologies and intellectual
property. The company‟s portfolio includes a combination of patents for technology
developed internally and the 500 global patents and applications that it acquired from
13 http://www.reuters.com/article/2012/07/31/idUS154268+31-Jul-2012+BW20120731 14
http://files.shareholder.com/downloads/IDCC/2251043075x0x625722/37ac125c-337c-4cd6-8390-
b2afea490fa5/IDCC_News_2013_1_2_General_Releases.pdf 15 http://in.reuters.com/article/2013/03/26/ericsson-micromax-telecom-idINDEE92P0C320130326
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Nokia16 in 2012. The company has also filed some recent patent infringement lawsuits
against ZTE Corp in the U.K., France, Australia and Germany17.
74 of Vringo‟s U.S. patents are relevant to 2G and 3G technology. These patents are
spread across all the Level 1 categories, with the most number of patents belonging to
Communications Quality (28) and Services (17).
19 of these 74 patents are standard-essential.
10 of its patents are featured in the top seminal patents ranking.
Core Wireless Licensing S.A.R.L.
Core Wireless Licensing is a wholly-owned subsidiary of MOSAID, a leading IP management
company. The company deals with development and monetization of intellectual property in
the telecommunications space. Core Wireless Licensing, like Vringo, has also acquired
patents that were initially filed by Nokia.
12 of Core Wireless‟ patents are relevant to 2G and 3G, with a majority of its patents
belonging to the Positioning and Power Management categories.
6 of the 12 patents have been ranked as seminal.
Core Wireless has filed a lawsuit against Apple over one of its patents related to 3GPP
standard-essential technology, which it had earlier acquired from Nokia18.
Pendrell Corporation
Pendrell is an intellectual property investment, advisory services and asset management
firm that is in the business of acquiring, commercializing, managing and licensing IP in the
fields of tablets, Smartphone and other consumer electronics.
Pendrell acquired approximately 125 patents and patent applications worldwide from
Nokia through its wholly-owned subsidiary, Helsinki Memory Technologies (HMT)19. The
current patent portfolio that Pendrell holds includes inventions conceived by their
employees or by global leaders such as IBM, Xerox and Phillips20.
39 of Pendrell‟s patents are relevant to 2G and 3G technology, with five of these ranked
as being seminal.
16
http://www.businesswire.com/news/home/20120809005600/en/Vringo-Nokia-Execute-Patent-Purchase-
Agreement#.VHMorfmUer8 17 http://www.lightreading.com/document.asp?doc_id=698844 18 http://www.pcworld.com/article/251396/mosaid_subsidiary_sues_apple_over_wireless_patents.html 19 http://www.worldipreview.com/news/nokia-sells-a-chunk-of-patents-to-pendrell 20 http://biz.yahoo.com/e/130308/pco10-k.html
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All of those 39 patents belong to the Level 1 category relevant to Security.
Gemalto
Formed in 2006 with the merger of Gemplus International and Axalto, Gemalto has been
one of the leaders in the digital security domain21. It provides software applications for
personal security and is a major manufacturer of smart cards.
15 of Gemalto‟s patents are relevant to 2G and 3G technology and belong to the
Security and Communication Quality categories. Four of these 15 are ranked seminal.
In its 2011 annual report, the company announced “temporary postponement of the
signing of new licenses.”22 However, considering the strength of its portfolio and strong
litigations it had filed in the past, the company could resume its monetization efforts.
Intellectual Ventures Management LLC
Intellectual Ventures Management LLC‟s portfolio, which is known as the IV portfolio, has
over 70,000 acquired patents and patent applications and 3,000 patent applications for in-
house inventions23. The company often acquires patents from smaller firms or individual
inventors and aggregates them into a large portfolio, which now comprises patents relating
to almost all technical domains. Recently, the company joined hands with NVIDIA to acquire
the patent portfolio of IPWireless, a leader in wireless technologies24.
Its patents in the 2G and 3G domains primarily belong to Communication Quality, Data
Transfer Rate and Security categories.
The company earlier involved itself in lawsuits with corporations such as AT&T and
Motorola over some of its telecommunications patents25.
The above companies have successful patent monetization programs in place and the
industry may see more efforts from these patent holders to monetize their patents through
effective licensing and litigation campaigns against key players in the market.
21 http://www.gemalto.com/companyinfo/about/merger/ 22 http://www.businesswire.com/news/home/20120307006629/en/Gemalto-full-year-2011-results#.VHMqPPmUer8 23 http://www.intellectualventures.com/index.php/inventions-patents/patent-portfolio 24 http://nvidianews.nvidia.com/Releases/NVIDIA-and-Intellectual-Ventures-Partner-to-Acquire-Portfolio-of-
Wireless-Patent-Assets-7dc.aspx 25 http://www.intellectualventures.com/assets_docs/Complaint.pdf, http://www.intellectualventures.com/assets_docs/Motorola_Complaint.pdf
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6 Glossary of Terms
1. Communication Quality
Backhaul Network: Backhaul Network comprises intermediate links between the
core network and the small sub-networks at the edge of a telecommunication network.
It guarantees Quality of service (QoS) to the end customer.
Congestion Control: Congestion control prevents network collapse due to
oversubscription of processing or link capabilities of network resources by regulating
traffic entry into a telecommunications network and also by taking resource utilization
reducing steps.
Handover: Handover is simply a process of transferring a call or a data session from
one channel to another to provide uninterrupted service.
2. Data Transfer Rate
Error Control: Error Control are techniques which ensure reliable delivery of data
over an unreliable telecommunication network by taking measures to remove errors
which may creep in due to channel noise.
Link Adaptation: Link Adaptation, also known as Adaptive Modulation and Coding
(AMC), is the process of matching modulation, coding and other signal and coding
parameters to the conditions on the radio link.
Shared Traffic Channels: Shared Traffic Channels enable sharing of network
resources among a group of users, enabling lower network costs and faster service.
Spreading Codes26: Spreading is basically an operation for increasing signal
bandwidth by using channelization (orthogonal) codes and scrambling (pseudo-noise)
codes.
Transmit Diversity: Transmit Diversity is a technology of using multiple transmit
antennae to transmit identical information bearing signals varying in their transmission
characteristics at any given instant.
3. Positioning
Network Based: Network Based techniques make use of the network provider‟s
infrastructure to identify the location of the handset in a non-intrusive manner.
26 http://www.comlab.hut.fi/opetus/238/lecture6_ch6.pdf
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UE Assisted: UE Assisted methods include methods such as OTDOA that require a
mobile phone to determine the time difference between specific signals from several
base stations and report it to a network device (SMLC), which then calculates the mobile
phone‟s location.
UE Based: UE Based techniques include A-GPS or Assisted GPS in which network
signals are used to reduce the time to first fix a GPS satellite to provide faster location
determination of the mobile phone.
4. Power Management
Continuous Packet Connectivity: Continuous Packet Connectivity includes
Discontinuous Transmission (DTX), Discontinuous Reception (DRX) and HSCCH-less
operation, which provide an always-on experience to the end-user while increasing
battery life by almost 15%.
Power Control: Power Control is a mechanism for setting appropriate transmission
power level of the mobile phone to ensure reliable quality of service.
5. Security
Access Control: Network Access Control unifies a wide range of technologies to
ensure end-point security. This includes host intrusion prevention, vulnerability
assessment, user or system authentication and network security enforcement.
Encryption: Encryption here refers to technologies pertaining to network security
and cryptography that maintain confidentiality of data transmitted over a wireless
network by ensuring strong data encryption and transmission over a secure channel.
6. Services
Location-Based Services: Location-Based Services cover a wide range of services,
including social networking, navigation, exploration etc. that are provided using location
information of the mobile handset.
Value Added Services: Value Added Services include all telecommunications
services that are not core services, i.e. call or fax transmission. These include MMS,
SMS, IMS and Intelligent Networks based technologies.
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iRunway has prepared this research independently based on reliable public data and reviewed the results based on its proprietary methodology, with the belief that it is fair and not misleading. The preparers of the information in this report are not engaged in rendering legal or other professional advice, and nothing in this document should be construed as such. iRunway does not practice law and it exists to provide technical research, analysis and reporting capability to its clients.
The patent data in this report is as of the date of preparation and therefore is subject to change as new patents are filed and issued every day. iRunway, nor any employee of iRunway accepts any liability for any damages or losses, direct, indirect, consequential, arising from any use or interpretation of this report or its contents.