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Auto Makers Double Down on Wi-Fi

Many new features in cars start as expensive options for luxury editions and evolve into standard features for all models. This certainly has been true with Wi-Fi. According to Car and Driver magazine, “Wi-Fi access has become a major selling point for buyers, especially for those who feel cut off from the world without Internet access. In fact, having a Wi-Fi hot spot is typically an expectation when considering a new vehicle.”

From its start as a simple way for our passengers to surf the Internet and watch movies while we’re driving, Wi-Fi’s utility has increased significantly, in part due to new features available in Wi-Fi 6. This article will trace how Wi-Fi is being used in cars and its evolution from an expensive option to an essential feature.

Why Wi-Fi?

Most smartphones can serve as hotspots, and we all have smartphones, so why do cars need Wi-Fi? Several reasons.


Honda - As any parent can tell you, keeping everyone connected is a big part of modern family happiness. With our new...4G LTE Wi-Fi, the new Odyssey is all about keeping everyone connected and comfortable.”


First, Wi-Fi installed in your car doesn’t consume your phone’s battery nor your mobile data plan. Also, as we’ll discuss later, Wi-Fi installed in your car enables features that you can’t get with phone-based Wi-Fi. Moreover, it guarantees you autonomy and a secured and reliable connection all the time: there might be public hotspots, but you don’t need to depend on them anymore - plus, Wi-Fi connection in your own car is generally safer than a Starbucks Wi-Fi!

It Started with Entertainment

When Wi-Fi first appeared in cars, passenger entertainment was a huge driver and differentiator. For example, when Honda added Wi-Fi to its 2018 Odyssey minivan, it enabled streaming video to its ceiling-mounted rear entertainment system. Regarding its utility, a Honda executive commented, “As any parent can tell you, keeping everyone connected is a big part of modern family happiness. With our new...4G LTE Wi-Fi, the new Odyssey is all about keeping everyone connected and comfortable.”

This functionality and sentiment have been echoed by many other carmakers. Here’s a blurb from Jaguar's website. “Wi-Fi Hotspot is all about keeping you connected. It allows you and your passengers to connect to the internet via a powerful in-car 4G hotspot. This means that up to eight devices can be connected to keep in touch with work, life, and entertainment while on the move.” Cadillac's website prompts potential buyers to “take ownership to the next level. Cadillac Connected Services helps make ownership more enjoyable and simplifies your life while on the go.”


Mercedes Benz - “One of the greatest technological innovations to be added to Mercedes-Benz vehicles in recent years is the ability to connect to a Wi-Fi hotspot in your vehicle.


Mercedes Benz gushes, “One of the greatest technological innovations to be added to Mercedes-Benz vehicles in recent years is the ability to connect to a Wi-Fi hotspot in your vehicle. This has a couple of benefits. For one, you can avoid overage charges with your cellphone carrier, which can just be annoying. And two, it allows devices like tablets or laptops that may not have 4G capability to easily connect to the Internet with a connection that is secure and fast.”

BMW touts the productivity-related benefits of Wi-Fi, “WiFi in the car...could soon revolutionize our workplace. Collaborative tools enable location-independent cooperative work, easy communication, and secure exchange of documents. Provided one has a stable internet connection, work can be done at home, in the park, in the café or on the beach, as well as on the train or in the car...For new car buyers, WiFi is increasingly becoming a key factor when it comes to making a purchase decision, if not a basic requirement.”

Regarding FordPass Connect, Ford’s website explains, “Up to 10 devices can connect at once, and you can use FordPass to keep track of your Wi-Fi data usage. You can access the hotspot up to 50 feet outside the vehicle. Now you can stay connected, even as you roam the highways.”


Ford - “Now you can stay connected, even as you roam the highways.”


Going Beyond Entertainment and Connectivity

For perspective, understand that although Wi-Fi’s range has extended significantly over previous generations, it’s essentially a local technology. Within a car, Wi-Fi (and often Bluetooth) is used to allow dozens of sensors and other devices to communicate with each other and the car’s CPU. When data is interchanged with services outside the car, this can be done via Wi-Fi if the external service is local--like a car on a dealer’s lot--or via cellular if more remote. In this fashion, Wi-Fi and cellular work together to keep your car connected.

Figure 1. Internal connectivity use cases for the connected car (Image credit EDN).

This technology collaboration enables features like location sharing, driving history, and crash response. Tesla goes far beyond this with remote diagnostics and over-the-air (OTA) software updates that can eliminate repair trips to the dealership. As described on Tesla’s website, “If your car requires attention, Tesla mobile technicians can complete most repairs wherever you park. If they can’t fix your issue on the spot, they can often identify and pre-diagnose repairs for faster service when you arrive at a Tesla Service Center.”

Where is all this going? The website Electrek, which tracks the transition from gas-powered cars to electric, predicts that “in a not-so-distant self-driving future, I can see your Tesla sending you a message asking if you need your car for a certain window of time, and if you don’t, it will drive by itself to the service center to get an issue fixed.” As traditional carmakers computerize more and more functions within their vehicles and launch new electric vehicles, many are also offering OTA updates. You can learn which companies offer OTA updates and how they work In this article, also on electrek.

The Promise of Wi-Fi 6

Meanwhile continued R&D investments by Wi-Fi contributors deliver new features that will enable newer versions of Wi-Fi, like Wi-Fi 6, to more efficiently serve in automobile-related applications. As detailed in EDN, “Wi-Fi 6 is expected to become the de-facto wireless interface for fully-connected cars. The most significant improvement over its predecessor is increased spectral efficiency, delivering an up-to-fourfold increase in channel capacity. This will either allow it to serve more clients per access point or enable new high-bandwidth use cases, for example streaming ultra-high-resolution video. Wi-Fi 6’s flexibility makes it better adapted to serve clients using smaller chunks of data, without reserving unnecessary overhead.

These improvements are elaborated upon in NXP’s article, 6 Reasons Why Automotive OEMs Are Upgrading to Wi-Fi 6, which lists less congestion, longer range, lower power, faster speeds, upload performance, and consumer satisfaction as the six reasons.

Figure 2. As predicted by BMW, autonomous driving will only make integrated Wi-Fi even more important to the automobile (Image credit - BMW).

The benefits that Wi-Fi delivers will only increase as autonomous driving becomes a reality. As summarized by BMW, “Permanently integrated WiFi, in particular, illustrates a change that vehicles are currently undergoing. Whereas we are currently using cars purely for locomotion, in the future autonomous driving will open up new possibilities: From the mobile office and entertainment to simple connectivity – WiFi in the car is one of the first steps towards achieving these goals.”


BMW - “From the mobile office and entertainment to simple connectivity – WiFi in the car is one of the first steps towards achieving these goals.”


Clearly, automakers are all in when it comes to Wi-Fi. For you, as consumers, this means ever-increasing convenience and safety.

Funding Innovation

Wi-Fi innovations come from multiple companies that invest hundreds of millions annually in R&D. Some recoup their investment largely via product sales, while others are research organizations that fund R&D with royalties from the companies that manufacture and sell products that utilize their technologies. As a patent pool administrator, Sisvel helps form and manage patent pools that provide efficient access to the technologies created by their patent owners.

A patent pool allows, by signing a single contract, to deliver access to multiple patented technologies, reducing overall administrative and licensing costs and accelerating time to market. Royalties paid by these licensees enable additional R&D to ensure that Wi-Fi and other technologies continue to meet and anticipate the future needs of current and new users.

Think about this innovation cycle the next time your passengers surf the Internet or watch high-quality movies while you’re driving, or you get an email from your car telling you that your engine is overheating and needs checking. Without the advancements funded by royalties, none of this would be happening.
Head image credit IEEE SA

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AV1 is a Copy Cat Codec

AOMedia asserts that AV1 is open source as if magically constructed without the use of existing patented technologies. A recent article in the Beamr blog contradicts this and shows how AV1 uses many of the same building blocks used by other codecs. Specifically, the Beamr article compared AVC, HEVC, AV1, EVC, and VVC, and made the following observations regarding the technologies incorporated in AV1 and the other codecs (emphasis supplied).

Hybrid block-based coding – “All these codecs use a hybrid block-based coding approach, meaning the encode is performed by splitting the frame into blocks, performing a prediction of the block pixels, obtaining a residual as the difference between the prediction and the actual values, applying a frequency transform to the residual obtaining coefficients which are then quantized, and finally entropy coding those coefficients along with additional data, such as Motion Vectors used for prediction, resulting in the bitstream.”

Partitioning – “We will begin with a look at the block or partitioning schemes supported. The MBs of AVC are always 16×16, CTUs in HEVC and EVC-Baseline are up to 64×64, While for EVC-Main, AV1 and VCC block sizes of up to 128×128 are supported. As block sizes grow larger, they enable efficient encoding of smooth textures in higher and higher resolutions.”

Prediction – “All video codecs from AVC onwards employ both INTRA prediction, where the prediction is performed using pixels already encoded and reconstructed in the current frame, and INTER prediction, using pixels from previously encoded and reconstructed frames…EVC-Baseline supports only 5 INTRA prediction modes, EVC- Main supports 33, HEVC defines 35 INTRA prediction modes, AV1 has 56 and VVC takes the cake with 65 angular predictions.”

Filtering – “In-loop filters have a crucial contribution to improving the perceptual quality of block-based codecs, by removing artifacts created in the separated processing and decisions applied to adjacent blocks… Wrapping up with AV1, a regular DB filter is used as well as a Constrained Directional Enhancement Filter (CDEF) which removes ringing and basis noise around sharp edges, and is the first usage of a directional filter for this purpose by a video codec. AV1 also uses a Loop Restoration filter, for which the filter coefficients are determined by the encoder and signaled to the decoder.”

Entropy coding – “The entropy coding stage varies somewhat among the codecs, partially due to the fact that the Context Adaptive Binary Arithmetic Coding (CABAC) has associated royalties… AV1 uses non-binary (multi-symbol) arithmetic coding – this means that the entropy coding must be performed in two sequential steps, which limits parallelization.”

In their launch materials, AOMedia stated that “AV1 is designed from the ground up, to create a high quality, royalty-free video codec.” Even a cursory examination of the key building blocks reveals that this isn’t the case, and in fact, AV1 relies on many patented technologies, including all those included in the Sisvel AV1 patent pool."

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Backgrounder: About WILUS Inc.

Overview

This document briefly describes WILUS, Wi-Fi 6, and WILUS’ contribution to the 802.11ax specification, or labeled Wi-Fi 6 by the Wi-Fi Alliance. Though a relatively small company, WILUS contributed to many critical features in Wi-Fi 6, and its patent portfolio represents a significant component of Wi-Fi 6-related IP.

About WILUS

WILUS is an R&D Company based in South Korea, which was founded in 2012 by Jin Sam Kwak (1) to focus on wireless and multimedia technologies for next generation ICT standards such as LTE-Advanced Pro, 5G NR(-Advanced), Wi-Fi 6, MPEG-H 3D Audio, and VVC. Within WILUS, more than 30 engineers and experts hold advanced degrees (Ph.D./M.S.) and have unparalleled expertise and experience in wireless connectivity and all relevant standards technologies. During the past ten years, WILUS’ standards team has been a key contributor to global ICT standards development for the next generation of wireless and multimedia services.
 
About Wi-Fi 6

The IEEE 802.11ax standard, otherwise known as Wi-Fi 6, or High-Efficiency WLAN (HEW) is the latest technology replacing the current 802.11ac WLAN devices, providing scalability and uncompromised performance. The high-level goal for Wi-Fi 6 was to improve spectrum efficiency and throughput in high-density Wi-Fi environments. As formulated, Wi-Fi 6 lets access points support more clients in dense environments and provides a better experience for typical wireless LAN networks. Wi-Fi 6 also provides up to 4x increase in throughput while reducing power consumption reduced by up to 66%. Figure 1 shows the evolution of Wi-Fi standards.

Wilus 2
Figure 1. The Evolution of Wi-Fi Standards

WILUS Contributions to 802.11ax/Wi-Fi 6
Some background on the IEEE and its standard-setting process will be helpful to understand WILUS’ contribution to Wi-Fi 6. Briefly, the 802.11ax standard is an IEEE specification, Wi-Fi 6 the Wi-Fi Alliance designation. The IEEE (I-triple-E) is the Institute of Electrical and Electronics Engineers, a professional and standard-setting organization. The IEEE 802.11 working group under the IEEE Project 802 LAN/MAN Standards Committee (aka IEEE 802 or LMSC) sets all Wi-Fi standards.

The standardization process starts with a functional requirements document that, as the name suggests, defines the technical requirements for the new specification. Once defined, individual members in dozens or hundreds of companies submit technical contributions to meet these requirements. This is a competitive process as different companies propose different technologies and technological approaches.

Movement through the process is driven by individual voters in the IEEE 802.11 working group. Specifically, at various points in the standard-setting process, at least 75% of voters must agree to add a technical contribution to the specification framework, adopt the specification into a draft, and approve the draft. Though WILUS is small compared to many contributors in global big companies, WILUS had several voting members in the IEEE 802.11 working group and actively participated in IEEE 802.11ax standards development with their technical expertise. During the Wi-Fi 6 development process, WILUS submitted more than 90 contributions with almost 30 adopted contributions from May 2014 to the publication of the specification in May 2021. This placed WILUS well within the top 20 contributors to Wi-Fi 6 – if we were to limit the analysis to the contributions submitted before November 2016, when Draft 1.0 was released (2), WILUS would rank even higher.

As it is standard practice, WILUS secured the ideas aimed to 802.11ax by patenting them and then strategically submitted selected ideas as the technical contributions, based on the standards progress for the development of IEEE 802.11ax specification. All patents including the technical proposals to the 802.11ax totaled more than 500 patents by the end of 2021, and the total is expected to grow to more than 750 granted patents by the end of 2025.

In terms of coverage within the main features of Wi-Fi 6, the WILUS patent portfolio addresses, together with others, about 90% of the more than 40 (new) core features of Wi-Fi 6 and contributes to the primary benefits of Wi-Fi 6 (faster throughput, higher capacity) as well as other benefits (extended wireless range, longer battery life, and coexistence with legacy Wi-Fi devices). The main features and relevant benefits which WILUS contributed to are as follows:
  • PPDU format & Preamble - defining new wi-fi frame structure for co-existence with legacy device and extended wireless range
  • Downlink OFDMA - an access point transmits multiple data to multiple stations simultaneously, leading to faster aggregated network throughput
  • Uplink OFDMA (Trigger frame based) - allows multiple stations simultaneously transmit data frames, greatly increases network capacity by removing contention overhead
  • Spatial Reuse & BSS Color - more aggressive in accessing the medium with coloring mechanism for better network capacity in congested area 
  • Target Wake Time & Power Save - scheduling of traffic exchanges between an access point and a station to reduce power consumption

Summary

The formulation of a standard is a competitive, consensus-driven process that ensures that only the most innovative and best-performing technologies become part of the standard. WILUS was a substantial contributor to Wi-Fi 6 specification as measured by the number of accepted contributions and their importance to critical Wi-Fi 6 features. WILUS’s patent portfolio represents a critical component of the patents related to Wi-Fi 6.


(1) He received his B.S., M.S., and Ph.D. degrees in Electrical Engineering and Computer Science from Seoul National University, Seoul, Korea, in 1998, 2000, and 2004, respectively. After postdoctoral research positions at Georgia Tech. and UT Austin, from 2007 to 2012, he served as a chief research engineer at LG Electronics. During this time, he carried out research tasks focused on the IMT-Advanced and led the standards activities for wireless communications such as 3GPP, IEEE 802, Wi-Fi Alliance, and WiMAX Forum, as well as served as an alternative board member in Wi-Fi Alliance.
(2)
Draft 1.0 is the most statistically significant, because it defines most of the basic features that constitute the core of the 802.11ax specification: this is when new chips started to be designed.
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Curbing the Abuse of Anti-Suit Injunctions with Alternative Dispute Resolution: Two Views

Introductions

Two articles on anti-suit injunctions (ASI) were recently published by Sisvel and a distinguished cast of co-authors. These articles will be highly useful for any IP professional seeking to learn what anti-suit injunctions are, how they are being used--and abused--why alternative dispute resolution (ADR) techniques like arbitration and mediation are better options, and how standard-setting organizations (SSOs), Competition Authorities, and the courts can encourage licensors and implementors to pursue ADR rather than ASIs.

The first article, entitled “Anti-suit injunctions are a race to the bottom – and arbitration is the answer”, was published in IAM in February 2022 and was co-authored by Sisvel founder Roberto Dini, Jing He, and Mario Franzosi.

The second article appeared in the March issue of les Nouvelles, and was entitled “The Phenomenon Of Anti-Suit Injunctions And Extraterritorial Implications”. This article was an extract by Sisvel’s Valentina Piola of a webinar discussion organized by LES Italia on the theme “Anti-suit injunctions under different national laws - Italy, Germany, UK and US”,  which was held on September 29, 2021.  The webinar was moderated by Roberto Dini, and featured  Mario Franzosi, Sir Robin Jacob, Judge Paul R. Michel, Judge Randall Rader, Cordula Schumacher, and Valentina Piola, who summarized the discussion for the article.


IAM Article: Anti-Suit Injunctions are a race to the bottom – and arbitration is the answer

The IAM article boldly defines the problem in the first paragraph:

The race for jurisdictional supremacy in the field of SEP litigation is nothing new. However, the recent take-up of anti-suit injunctions (ASIs) by some courts has the potential to lead to a spiraling race to the bottom in the context of global SEP dispute resolution, ultimately resulting in a litigation gridlock. The urgency of the situation is reflected in the European Union’s initiation of a formal WTO process in July 2021 seeking more information from China regarding its use of ASIs.  

Closing out the introduction, the authors presage what they propose as the best solution --international alternative dispute resolution (ADR)--pointing out that the Court of Justice of the European Union recognized the role that independent third parties could play in resolving SEP disputes in the 2015 Huawei v ZTE.


The ASI phenomenon

The authors next review how ASIs are being used in patent litigation, with a key starting point being Unwired Planet v Huawei, in which the UK Supreme Court determined the value of a FRAND royalty to be paid for a global SEP license. After the Unwired Planet decision, the authors argue, Chinese courts, in particular, extended the decision far beyond the intent of the UK court:

The UK court held that if the plaintiff was unwilling to take a global license on the basis of the court ruling, it would issue an injunction covering the United Kingdom and the United Kingdom alone. This contrasts with the practices of Chinese courts, which take on cases as contract disputes,without considering any underlying patent infringement matters, and subsequently deploy ASIs, which have the effect of interfering with foreign judgments or companies over which they do not have jurisdiction.  

As the authors observe, “This has raised big questions about sovereignty and also sparked discussions about which courts can define FRAND royalty rates.”
The article then reviews the key factors considered by the Chinese courts when they issued ASIs in Huawei v Conversant, Xiaomi v InterDigital, and Samsung v Ericsson, which included:
●    the possible impact of the enforcement of foreign court decisions on parallel litigation in China;
●    whether it was necessary to issue an ASI;
●    whether the damage to the applicant if an ASI was not issued exceeded the damage to the respondent if an ASI was issued (i.e., the balance of interests);
●    whether issuing the ASI would damage public interest; and
●    whether issuing the ASI complied with the doctrine of comity. 

In particular, the authors take issue with the Chinese court’s analysis of public interest, stating:

It is regrettable that the courts in China seem to have an incomplete analysis of public interest...Insufficiently rewarding innovators who have incorporated their patented technologies into industry standards is contrary to the goal of fostering innovation and making new and safer products available. This is the real public interest, which is also the stated purpose of China’s Patent Law.


Reactions of national courts in Europe

The authors then described the responses to these ASI’s in Europe, first observing that “restraining a party from applying a foreign judgment in a foreign territory raises serious doubts about lawfulness, as it purports to bind courts in other countries. In this context, ASIs do not appear to take into account territorial sovereignty (a fundamental principle of any legal system).”

One reaction has been “a race to sue counterparties in courts deemed friendly, notwithstanding the universal principle of national sovereignty.” The Court of Appeal of England and Wales in Vestel v Access Advance addressed such forum shopping, finding that, unlike the over-reaching Chinese courts, they didn’t have jurisdiction to set a global FRAND rate absent an underlying action for patent infringement.

Relying upon both Sisvel v Haier and  InterDigital v Xiaomi, the authors posit that “a patent implementer who applies for an ASI, or intends to, cannot be regarded as sufficiently willing to take a license within the meaning of the case-law of the Court of Justice of the European Union and the German Federal Supreme Court.”

Regarding the specific issue of ASIs, the authors state:  

To put an end to the spiral of ASIs, anti-anti-suit injunction and anti-anti-anti-suit injunctions, the Munich Regional Court went a step further, holding the implementer liable in attempting to escape its obligation to pay royalties. The court was explicit: the implementer could try to acquire an ASI, but the patent owner could then go back to the Munich court, which would grant it an injunction. This reasoning demonstrates that a FRAND royalty cannot be proactively negotiated using ASIs, while trying to rebalance the situation between patent owner and implementer.
 

Arbitration – an efficient tool for solving FRAND disputes and avoid delaying tactics

Having detailed the problems associated with ASIs, the authors turned their attention to the best alternative, which they state are international arbitration bodies that deliver the following advantages:
●    Arbitration reduces the costs of litigation.
●    Arbitration enables parties to choose arbitrators with the necessary legal, technical, and economic expertise to fairly resolve SEP/FRAND disputes.
●    Arbitration can more easily cover entire SEP portfolios because, unlike court proceedings, the territoriality principle does not prevent arbitration tribunals from considering patent cases from various jurisdictions.
●    Finally, arbitral awards can be enforced across international borders under the regime of the New York Convention.

Despite these advantages, the authors recognize that “arbitration as an alternative to court disputes has so far yielded mixed results.” To promote arbitration, the authors recommend that all associated organizations and authorities should promote arbitration. For example, they call on standards-setting organizations (SSOs) to encourage arbitration among their members by requesting a declaration of willingness to arbitrate.

They advocate that competition authorities should “recognize that a lack of agreement on the FRAND royalty rate means that there is a competitive obligation among both patentees and implementers to arbitrate.” Finally, the authors recommend that “national judges called to decide on SEP matters could use their procedures to powerful effect to encourage people to arbitrate as a sign of good faith and willingness in FRAND disputes.”

In conclusion, the authors observe that “ASIs are emerging as a tool used by national courts to defend the interest of their industries and perhaps could also be seen as constituting state aid or even an unfair trade practice, in violation of international trade treaties such as the WTO and emerging multilateral agreements.” Then, they preset a dire warning.

Failing to reward innovators for their extensive R&D investments and to recognize the benefits that their patented technologies bring to society may discourage them from investing in new research. To the detriment of technological progress, they may decide to avoid participating in the standardization process and revert to proprietary, closed solutions or trade secrets as means of protection. Such a broken standard and patent ecosystem could well have all sorts of unintended consequences, producing an even worse scenario for all those involved.
 

LES NOUVELLES Article: The origins of Anti-Suit Injunctions phenomenon


The second article plows much of the same ground, but with a more detailed focus, starting with the origins of the anti-suit injunction, revealing ASIs to be just another form of hold out, and concluding again that the best solution for patent disputes are alternative dispute resolution techniques like arbitration and mediation.

The article again identifies Unwired Planet as the decision that launched the ASI phenomenon, though the panel quickly clarified how the Chinese Courts have overextended the decision far beyond where the UK Court intended. To recount, in Unwired Planet the UK Supreme Court found that setting a global license for the entire portfolio was the best solution when dealing with a large international SEP portfolio. However, unlike several Chinese ASI cases, Unwired started as a patent infringement action, which clearly gave the court jurisdiction over the parties. And, as mentioned previously, the Unwired Court didn’t interfere with the judicial power of other jurisdictions; rather, the defendant could either accept the worldwide royalty pricing or be subject to a UK injunction.

In contrast, several Chinese cases seem to have rewarded forum shopping for courts deemed friendly in defining royalty rates. These cases were initiated without an underlying action for patent infringement, bringing jurisdiction into question, and the ASI preventing legal action in other jurisdictions was clear interference with the judicial power of other jurisdictions.

For this reason, some US courts have ignored Chinese injunctions. In one case, Samsung v. Ericsson, Judge Rodney Gilstrap of the Federal District Court of Texas  “affirmed that the use of ASIs is to be considered an interference with the administration of justice in other countries and with regard to companies over which there is no jurisdiction.” The judge ignored the Chinese injunction, in turn issuing an "Anti-Interference Order”.

Note that after the court ignored the ASI, the parties settled on appeal. In this fashion, the court acted as a facilitator in getting the parties to negotiate, which is always the preferred method of setting a royalty rate.  


ASIs as a delaying tactic 

The panelists then positioned ASIs as another form of hold-out that “generates a distortion of the market that damages the entire innovation ecosystem.” In particular, ASIs are damaging because they deny patent holders access to the courts and the ability to prosecute unauthorized users of their patented technologies. Holdout also discourages and penalizes willing licensees by increasing their production costs as compared to competitors who hold out.

Once again the concept of public interest was take into consideration. Chinese courts, the panel argued, set low rates because they “believe it is in the interest of the market to keep the cost of innovation and technology as low as possible.” Then they counter that “public interest isn’t just about having a low price;  public interest is to have an improvement in our daily lives through increasingly improved and sophisticated products. In order to achieve this, huge investments in R&D are required.”

Noting the increasing prominence of Chinese manufacturers, the panelists observed that “ASIs are therefore emerging as a tool used by some national courts, and in particular Chinese courts, to defend the interests of their own industries. They can even be seen as state aid or an unfair trade practice that are not allowed by international trade treaties such as the WTO.“

Fortunately, the authors observe, there is room for optimism. For example, in Sisvel v. Haier, the court ruled that the alleged licensee must act proactively to reach an agreement with the patent holder within a reasonable time. In Interdigital vs Xiaomi, the Regional Court of Munich ruled that requesting an ASI evidences a reluctance to negotiate in good faith. This positions the party as an unwilling licensee that loses the right to a FRAND defense and may be subject to an injunction. As observed by the authors, “If other courts were to adopt this strategy, this would have a strong disciplinary effect on many counterfeiters, who would be much more cautious before requesting an ASI.


ADR to solve FRAND disputes and avoid delaying tactics 

Having detailed the various problems with ASIs, the panelists proposed arbitration and meditation, collectively called Alternative Dispute Resolution (ADR), as the solution. Panelists agreed that ADR delivers faster decisions at much lower cost, and the ability to consider large patent portfolios in different jurisdictions. In addition, they don’t set a legal precedent -- they only bind the parties who can resolve the dispute confidentially without creating any conflict between different national jurisdictions.

The panelists also identified some drawbacks of ADR, though most have workarounds. For example, arbitration can’t invalidate patents. though it can delegate the task of assessing the validity of SEPs to an international patent authority such as the EPO. In fact, in a recent pilot study, the EPO has expressed its opinion on the essentiality of patents.

Despite the advantages presented, the panelist agreed that ADR has yielded limited results as alternatives to judicial disputes before national courts. As in the other article, they urged Standard Setting Organizations (SSOs), Competition Authorities, the courts, and other government institutions to promote ADR.

The article identifies one very positive step that was taken by the Digital Video Broadcasting (DVB), an international SSO, that recently published a Memorandum of Understanding encouraging members to settle license disputes through arbitration. The panelists called on Competition Authorities to request arbitration from the SSOs, and for courts to construe the refusal to arbitrate as a sign of unwillingness.

Despite the promising steps, the panel concluded that “For the well-being of the entire innovation ecosystem, it’s important that licensing agreements are primarily concluded without resorting to litigation. However, at present, arbitration cannot be imposed and therefore the consent of the parties or a contractual clause is required. So, to date, the choice of arbitration remains unfortunately rather limited.”


For additional information, please read the full articles:
Anti-suit injunctions are a race to the bottom – and arbitration is the answer (pdf)
The Phenomenon Of Anti-Suit Injunctions And Extraterritorial Implications (pdf)
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Editorial response on Via exit leaving Sisvel as the only patent pool on the wireless market

On April 26, 2022, Via Licensing announced that it was dissolving certain wireless pools and would likely contribute the wireless patents owned by Via to a 5G pool under formation by Sisvel. The following day, Sisvel announced that it would attempt to convince Via pool members to join the Sisvel 5G pool and that a single pool “will create more value for licensees and accelerate adoption by 5G implementers.”

Sisvel released a Q&A with additional information describing its offering to Via pool licensors here.

Sisvel believes that the potential to create a single patent pool for 5G wireless represents a significant opportunity for both patent owners and implementors. The press and pundits agreed; here are some of the highlights of their reporting and comments.

VIA close IAM
 
IAM covers the management of intellectual property as a key business asset and published the first story about the announcement, available here (subscription required). Ms. Morris’ opening paragraph summarizes what happened and why it’s so significant, stating, “Via Licensing will wind down its wireless patent pool to refocus resources and energy on its AAC and MPEG-H audio codec programmes. Via’s exit leaves former competitor Sisvel as the sole wireless patent pool in the mobile devices market, and it will quickly push to attract Via’s former wireless licensors.”

Then she explains why the wireless market has been challenging for patent pools, “Patent pools in the wireless space have always struggled to pick up steam. The dynamics of the market – with so many major patent holders and device makers – make it a tough nut to crack. The biggest patent holders – Ericsson, Nokia, InterDigital, and Qualcomm – prefer in-house licensing and have never joined a pool focused on the mobile devices market.”

Regarding Sisvel's hope to consolidate the market, Ms. Morris quotes Sisvel Group President Mattia Fogliacco as “actively courting Via’s 30 licensors to join Sisvel as well.” In this regard, she explains that Sisvel will offer founding member shares to the Via patent owners and other incentives.

She also quotes Mr. Fogliacco’s comments about why the Via pool closing is so significant, “I think we have an occasion here to really aggregate a very meaningful critical mass of patent owners that then will really display those economies of scale and those transaction costs savings that are typical of patent pools or aggregators.”

VIA close FOSS
 
The following day, Foss Patents, the blog for noted IP authority Florian Mueller, reported on the Via closing with significant commentary. Significantly, after reporting the background and facts, Mr. Mueller opined that a single pool would likely be much more successful than multiple pools.

In my observation, there is empirical evidence besides Via's codec pools that the industry benefits when it can converge on a single pool in a given field....Historically, the MPEG LA codec pools that were one-stop solutions also delivered outstanding results, while the HEVC and VVC situation is an unmitigated disaster for the industry at large.

He then shared his thoughts about “Why would or wouldn't Via's cellular SEP licensors join Sisvel's pool?” mentioning several key factors. Most significant was Sisvel’s growing reputation as a highly effective licensing administrator.

The Sisvel of now has painstakingly built a reputation of being an organization that willing and even not-so-willing licensees can get along with. A couple of weeks ago, Sisvel announced an agreement with Vivo that was struck without having to resort to litigation, which also applies to last year's deal with Samsung. Last summer, Sisvel successfully settled patent infringement disputes with Xiaomi, OPPO, and ZTE. Those are no small achievements, not only but also in light of the unit volumes involved--and Sisvel points to them in that Q&A document on the fallout from Via's decision.

He also expressed that Via’s likely endorsement would be a significant message to the Via patent owners. “By contributing the cellular patents it actually owns (as opposed to third-party patents it administered as part of the pool) to Sisvel's pool, Via endorses through meaningful action the alternative to its licensors that Sisvel's pool represents. If they issued a mere recommendation, people would wonder why they don't put their patents where their mouth is. Via's decision regarding its own patents represents meaningful peer recognition for Sisvel.”

In addition to the founding member status mentioned by IAM, Mr. Mueller further quotes the Sisvel Q&A document that details that “Sisvel will also accept existing third-party essentiality evaluations as relevant evaluations under its 5G multimode and cellular IoT pool, which should eliminate any concerns for double costs." Mr. Mueller concludes that “I would be surprised if "migration" from Via's defunct pool to Sisvel's more successful one didn't happen on a substantial scale.”

VIA close light reading
On May 2,Mike Dano from Light Reading attempted to answer the question, Can Sisvel bring unity to the 5G patent landscape? By way of background, Light Reading is an independent B2B digital media platform serving the networking and services industry.

Mr. Dano opens his article with a concise summary, “After a decade of work, Via Licensing announced it will shutter its wireless patent pool, which stretched from 3G to 5G. The move leaves Sisvel as the last big remaining patent pool in the cellular industry, just as the market's transition to 5G catches on.”

Mr. Dano quotes extensively from both IAM and Foss Patents, but provides useful original  perspective regarding the makeup of the Via pool and its longstanding competition with the Sisvel pool. “Via Licensing in 2012 announced its 4G patent pool with AT&T, HP, Clearwire, Docomo, SK Telecom, Telefónica and others. Just one month later, Sisvel launched a competing pool with the likes of Orange, KPN Telecom and others, anchored by around 500 patents it acquired from Nokia.”

The article reports that “Via Licensing showed progress roughly five years ago with the addition of other participants, including Lenovo, Verizon and Conversant – after it lowered its rates,” but suggests that Sisvel’s recent licensing success might have supplied some of the impetus for Via to shutter its pool. “It's worth noting that, during the past year, Sisvel has successfully closed several cellular licensing agreements with major players like Samsung, Oppo, Xiaomi and Vivo – moves that likely put the final nails in Via's coffin.”

Regarding the Sisvel 5G pool, Mr. Dano reported, “Sisvel plans to release the details of its own 5G plans by September. The company said its 5G patent pool "hopefully" will include its existing partners alongside "many new Via patent owners that will be willing to join the pool. This pool will exclusively focus on the consumer electronics market for 2G, 3G, 4G and 5G, and will not target the automotive nor the IoT market."

Addressing Sisvel’s ability to “bring unity to the 5G patent space,” Mr. Dano shared Mr. Mueller’s quote from above, “As someone who closely monitors cellular SEP [standard-essential patent] litigation and licensing, I would be surprised if 'migration' from Via's defunct pool to Sisvel's more successful one didn't happen on a substantial scale.”

VIA close juve
 
European patent publication Juve Patent published a short article on the Via closing written by Konstanze Richter. The article starts with a concise attention-grabber, “Then there was one,” and then goes recounts the basic facts already presented above.

Ms. Richter provides interesting details regarding members of the Via pool, sharing that “Via Licensing primarily holds 4G patents from around ten patent families, some of which are also applicable for 5G technology. Together with the patents of its approximately 30 licensors, including Deutsche Telekom, Google and Mitsubishi, Via Licensing says it currently has one of the largest patent portfolios for wireless technology.”

She also comments on several existing relationships between Sisvel and Via pool members, predicting that “Sisvel’s offer is likely to be particularly tempting for the existing licensors in the Via Licensing wireless pool that are also licensors in Sisvel’s pools for other technologies. This includes members of the video coding platform Dolby, or NTT Docomo.”

Other Publications

The Via announcement was also covered by multiple other IP and/or telecom resources, including:

  • telecompaper - Via Licensing patent pool members in talks to join Sisvel 5G pool (very short summary).
  • IPtops.com - Via Licensing's exit from wireless patents leaves Sisvel as only game in town with respect to cellular SEP pools for consumer electronics gadgets (the story is the first paragraph of the Foss Patents article with a link to the article).
  • IPRefresh - Via Licensing’s exit from wireless patents leaves Sisvel as only game in town with respect to cellular SEP pools for consumer electronics gadgets (the story is the first paragraph of the Foss Patents article with a link to the article).
  • Tech Investor News - Via Licensing's exit from wireless patents leaves Sisvel as only game in town with respect to cellular SEP pools for consumer electronics gadgets (the story is the first paragraph of the Foss Patents article with a link to the article).
  • Rocky Mountain Patent - Via Licensing’s exit from wireless patents leaves Sisvel as only game in town with respect to cellular SEP pools for consumer electronics gadgets (the story is the first paragraph of the Foss Patents article with a link to the article).


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Ericsson joins Sisvel's DSL licensing program as a new patent owner

On March 2020, Ericsson joined Sisvel’s DSL licensing program, which covers patented technologies used in a wide range of communications devices and services, providing broadband access to data networks, such as the Internet.

Sisvel’s Digital Subscriber Line (DSL) licensing program includes now patents owned by Ericsson and Sisvel itself and aims at making both companies’ patent portfolios more easily accessible to the market.

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How You Should Think About Patents and Royalties

It’s easy for those with only a casual knowledge of standards-based technology development to consider patents and royalties a harmful and unfair “tax” on the companies that sell products based upon those standards. But understanding how standards like Wi-Fi are created delivers a completely different view. Patents and royalties aren’t a tax on the system; they’re the fuel that powers the system.

Let’s start with a quiz. Assume you’re at the airport in a crowded lounge, or maybe in a conference hall. Your notebook computer is connected via Wi-Fi and you’re about to make a critical video call, but notice other folks around you doing the same thing. Your main concern is (choose one):

A.    I hope this call goes through and looks and sounds great.
B.    I hope royalties on the Wi-Fi router aren’t excessive.
C.    I hope royalties aren’t being paid to a non-practicing entity (NPE).

Hold that thought.


How Standards are Created

Though the standard-setting process varies among organizations like MPEG and the IEEE, most follow this basic structure. The process starts with a functional requirements document that, as the name suggests, defines the technical requirements for the new specification. Relating to our quiz, the key functional specs for Wi-Fi 6 were improved efficiency and throughput in high-density Wi-Fi environments, like airports or conference halls.

Once the functional requirements are set, individual members in dozens or hundreds of companies submit “technical contributions” to meet these requirements. This is a competitive process as different companies propose different technological approaches. Movement through the process is driven by individual voting members. In the IEEE group that sets Wi-Fi standards, as generally in standard-setting bodies, members vote to add technical contributions to the specification framework, adopt the specification into a draft, and approve the draft.

Member companies submitting technical contributions can be retail product manufacturers, chip vendors or other component vendors, telecom operators or pure research companies funded through product royalties. Or a combination of these. Technical solutions contributed to standards are almost always patented, which means they are highly innovative and involve substantial development, testing, and refinement.

These technical contributions are designed and developed by highly skilled professionals working in an extremely competitive environment driven by the voting process. Their charter is to create patentable technologies that solve key requirements of the specification. They’re the ones who make your video call a success or a failure.

Of course, not all technical contributions are accepted. Contributors often propose several solutions for every technical problem, but eventually only one is integrated into the standard. So, the companies employing these talented developers must fund the development of multiple inventions for each that’s integrated into the standard. This requires substantial investment.


Deploying the Standard

Once a standard like Wi-Fi is complete, it contains the best-in-class of multiple proposals from dozens of companies. Component vendors build chips that implement the standard and product manufacturers integrate these components into retail products that are sold to businesses and consumers. Products that implement the standard pay royalties back to companies that contributed technology to the specification, either bilaterally, or through patent pools that combine multiple contributors.


About These Royalties

A few things about these royalties. First, companies build products around standards-based technologies because the development process ensures that the standard will include the most effective technical solutions for achieving the requirements of the new specification. Deploying the standard allows them to remain competitive with other manufacturers and ensures that their products are compatible with all others that use the same standard.

Second, because of how standards are created and documented, companies who implement the specification can easily find out who the contributors are and that patents were actually deployed in the specification. The expectation of royalties is not a surprise; it’s a well-established component of the technology innovation ecosystem.

Finally, to ensure that patent holders don’t abuse the leverage that a standard gives them, royalties associated to standard-essential patents must be Fair, Reasonable, and Non-Discriminatory (FRAND). While opinions will certainly vary about what’s reasonable, FRAND is an established legal concept that both patent-holders and implementors can rely on in court. That said, by far the majority of patent licensing agreements are hammered out via negotiation, not by judges or juries.


How You Should Think About Patents and Royalties

Now back to our quiz. Your main concern is (choose one):

A.    I hope this call goes through and looks and sounds great.
B.    I hope royalties on the Wi-Fi router aren’t excessive.
C.    I hope royalties aren’t being paid to a non-practicing entity (NPE).

The correct answer is obviously A. The Wi-Fi 6 development process ensures that, if your laptop and the local router both support Wi-Fi 6, you have the world’s best technology delivering your call.

Should you care about royalties? No, because they’re baked into the standard-setting and implementation process that brought us Wi-Fi, cellular, and many other similar technologies. If the router costs a few dollars more to deliver the best possible experience, it’s a reasonable price to pay. After all, innovation is a long and expensive process, it requires the possibility of reasonable returns to be worth pursuing.

Should you care if you’re paying royalties to a non-practicing entity? Why would you? At the end of the day, it’s all about the best technology to get your call through. And it’s irrelevant if that comes from a chipset manufacturer, a router vendor, a university, or a research shop.

So again, royalties aren’t a tax on the system; they're the fuel that powers the system. Eliminate or dramatically reduce these royalties and you remove the incentive that produced technologies like Wi-Fi and cellular in the first place.



Photo by Mikhail Nilov from Pexels
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