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Conversant Intellectual Property Management Inc., which acquired some of Nokia Corp.'s wireless patents, has joined companies including Verizon Communications Inc. and Alphabet Inc.'s Google to pool high-speed wireless communication patents for licensing.
Conversant, which makes money solely through licensing its patent portfolio, is the first pure-patent holding company to join the licensing pool.
Via Licensing Corp., a Dolby Laboratories Inc. subsidiary that manages and licenses patent pools, said Sept.11 that Conversant’s wireless unit will be a licensor in its pool covering standard-essential patents underlying Long Term Evolution (LTE) technology. A patent pool, which bundles patents available for licensing, is considered to lower transaction costs by eliminating the need to negotiate licenses from multiple patent owners.
This marketplace needs a clear pricing methodology and “predictability for licensees and licensors,” said Conversant’s Chief Executive Boris Teksler, who was the former head of patent licensing at technology giant Apple Inc. Via’s patent pool provides Conversant with an alternative channel to strike a licensing deal, he said.
In recent years, patent owners and licensees have struggled to find a middle ground when negotiating patents essential to specific widely-used technologies, such as mobile phone systems. The uncertainty around how a patent owner calculates royalties on technology that underlies modern electronics has led to fierce battles, such as iPhone maker Apple’s lawsuit against chipmaker Qualcomm Inc., accusing it of providing unfair licensing terms.
Via’s LTE pool “eliminates the need for litigation and promotes a fair exchange for IP rights,” Via’s president Joe Siino, said.
“It proves that the licensor is willing to license on fair, reasonable and non-discriminatory terms because they’re accepting a pricing that others in the industry broadly accept and acknowledge,” Siino said.
Companies including ZTE Corp., AT&T Inc., and NTT DOCOMO Inc., have already joined Via’s LTE patent pool with patents that apply to mobile and internet-connected devices. Last week, Via announced that Verizon and electronics maker Lenovo had agreed to participate in the pool.
Without providing details, Siino said he expects other patent licensing companies, like Conversant, to also sign up for the pool.
Conversant’s Core Wireless Licensing SARL, which holds patents purchased from Nokia, won $7.3 million in damages in December 2016, after the U.S. District Court for the Northern District of California ruled in its favor in a lawsuit it filed against Apple. Conversant had alleged that the iPhone maker infringed some of its mobile communication patents.
Apple fought back with a suit alleging that Conversant, Core Wireless and several related companies conspired to use standard-essential patents acquired from Nokia to demand excessive licensing fees. That case is ongoing.
Core Wireless also succeeded in winning $2.3 million in damages in September 2016, after a ruling from the United States District Court for the Eastern District of Texas found that LG Electronics Inc. infringed two of its smartphone technology patents.
It is challenging for patent licensors like Conversant to assert standard essential patents, because long drawn out discussions leading to litigation mean low returns, David Cohen, president of intellectual property consulting firm Kidon IP Corp. said.
“Only $7 million from Apple is not a lot of money for all that effort,” Cohen said. “Patent pools, in theory, offer a much more guaranteed return on your patents.”
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