Alcatel-Lucent, Ericsson, NEC, NextWave Wireless, Nokia, Nokia Siemens Networks and Sony Ericsson have announced a mutual commitment to a framework for establishing predictable and more transparent maximum aggregate costs for licensing intellectual property rights (IPR) that relate to 3GPP Long Term Evolution and Service Architecture Evolution standards (LTE/SAE).
The framework is based on the prevalent industry principle of fair, reasonable and non-discriminatory (FRAND) licensing terms for essential patents. This means that the companies agree, subject to reciprocity, to reasonable, maximum aggregate royalty rates based on the value added by the technology in the end product and to flexible licensing arrangements according to the licensors’ proportional share of all standard essential IPR for the relevant product category.
Specifically, the companies support that a reasonable maximum aggregate royalty level for LTE essential IPR in handsets is a single-digit percentage of the sales price. For notebooks, with embedded LTE capabilities, the companies support a single-digit dollar amount as the maximum aggregate royalty level. The parties believe the market will drive the LTE licensing regime to be in accordance with these principles and aggregate royalty levels.
This framework balances the prevailing business conditions relevant for the successful widespread adoption of the LTE standard, which continues its progress toward definitive adoption by the industry in the applicable standards forums and organisations.
"As our respective companies have now launched R&D efforts and trials for LTE technology, we hope that this initiative will help for a wide adoption of this technology across devices and applications, enabling a wireless lifestyle for consumers and enterprises and creating value for technology providers," says Olivier Baujard, chief technology officer at Alcatel-Lucent.
“The adoption of this initiative will reassure operators of the early widespread adoption of LTE technology throughout the consumer electronics industry,” says Ericsson’s senior vice-president, GM and chief technology officer Håkan Eriksson. “It also confirms Ericsson’s longstanding commitment to the FRAND principles as fundamental to the industry.”