Tim Pohlmann is the CEO and founder of IPlytics. He earned his doctoral degree with the highest distinction from the Berlin Institute of Technology, with a dissertation on patenting and coordination in standardization. He then went on to work as a post-doctoral researcher and consultant for the Law and Economics of Patents Group at CERNA, MINES ParisTech.
In his work as an economist and consultant, Dr Pohlmann was confronted with the challenge that standards databases such as those of the European Telecommunications Standards Institute and the Institute of Electrical and Electronics Engineers have no real, meaningful connection with comprehensive global patent databases. He realized that if we are to keep pace with the next technology revolution, then as IP professionals, we need to rethink – even revolutionize – how we approach both patent and standards data, to provide business-ready knowledge for actionable decision making across our organizations.
Dr Pohlmann founded IPlytics with the vision of creating the first solution on the market to bring together comprehensive, highly indexed technical standards information, global patents, declared SEPs, patent pool and technical standards contribution data, to provide industry-leading analysis on the past, present and future of standards-essential technology. Unlike other tools that are overly complex, IPlytics provides fast, intuitive access to patents and standards to empower the user to strategically align patent portfolios to protect innovations and proactively engage in continuous strategic portfolio development as it relates to SEP assets, for initiatives such as licensing, acquisitions and joining patent pools, or simply to understand the respective positions of the competition.
Dr Pohlmann has been actively involved in preparing empirical studies for the European Commission, the World Intellectual Property Organization and the German federal government on declared patents, standards contributions, patent transfers and patent pooling behavior. He is also the author of several peer-reviewed economist journal articles, several IAM magazine articles and some of the most-read IAM industry reports.
Even as Europe and the rest of the world continued to face the unprecedented challenges of the COVID-19 pandemic in 2021, the development of 5G and other Standard Essential Patent (SEP)-enabled technology standards has continued at an unabated pace. While the year has not yet ended, more than 100,000 technical contributions have already been submitted at 3GPP meetings for 2G, 3G, 4G and 5G in 2021 – a near-record yearly contribution count. The invention and standardization of massive, complex communication technologies continues to generate significant numbers of SEPs. According to IPlytics data, the cumulative number of self-declared SEP families has surpassed 72,000 in 2021, indicating a five-fold increase in just 10 years.
Standard Essential Patents (SEPs) are on the rise; the number of newly declared patents per year has almost tripled over the past five years. There were 17,623 new declared patent families in 2020, compared to 6,457 in 2015 (see Figure 1). The 5G standard alone counts over 150,000 declared patents since 2015. Similarly, litigation around SEPs has increased. One of the driving factors of recent patent litigation is the shift in connectivity standards (eg, 4G/5G, Wi-Fi) that in the past were mostly used in computers, smartphones and tablets, but are now increasingly implemented in connected vehicles, smart homes, smart factories, smart energy and healthcare applications. Another reason why litigation may rise further is the belief that large SEP owners such as Huawei, ZTE or LG Electronics may soon sell parts of their SEP portfolios, which may likely end up in the hands of patent assertion entities (PAEs). One way or another, it is anticipated that the majority of patent holders will actively monetize their SEPs covering standards such as 5G, Wi-Fi 6 or VVC in this fast-moving, high-investment environment. Any company adopting these standards must decrease operational risk and expense exposure by taking a proactive strategy towards SEPs rather than a reactive one.
In this article, we’re going back to basics and discussing why our smartphones work everywhere, doing things closer to science fiction of the 1960s or 70s than anyone would have believed, as well as the role that Standard Essential Patents (SEPs) play in making this happen. We are going to examine inherent conflict between innovators and inventors that create new products and services, patent their inventions, and the implementors that leverage and deploy those inventions. Most of all, we’re going to discuss the process that converts these inventions and patents into money. A lot of money. Millions, tens of millions, and sometimes even billions of dollars. Why? Because your smartphone would be a paperweight without these innovations and patents. And soon vehicles, home appliances, production lines, meters, healthcare devices and many more industries will follow.
Most market experts predict dramatic changes in the auto industry because of shifting consumer preferences, new business models and emerging markets. The sector also looks set to be heavily affected by new sustainability and environmental policy changes, as well as by upcoming regulations on security issues. These forces are predicted to give rise to disruptive technology trends, such as driverless vehicles, electrification and interconnectivity. Forecast studies posit that the smart car of the near future will be constantly exchanging information with its environment. Car-to-X or car-to-car communication systems will enable communication between cars, roadsides and infrastructure, while mechanical elements will soon be embedded into computing systems within the internet infrastructure. The auto industry is one of the first sectors to rely on Internet of Things (IoT) technologies, which connect devices, machines, buildings and other items with electronics, software or sensors. Interconnectivity across multiple vehicle parts and units relies on the specification of technology standards such as 4G or 5G, Wi-Fi, video compression (HEVC/VVC), Digital Video Broadcasting (DVB) and Near Field Communication (NFC) or the wireless charging Qi standard to name a few.
Last week, an article was published on the Social Science Research Network (SSRN) website by Matteo Sabattini, who is the director of IP Policy at Ericsson. SSRN is an open research paper repository that does not peer-review any articles that are uploaded. Sabattini’s new article, a summary of which was also recently published on IPWatchdog, is titled, “When is a portfolio probably standard-essential?” and cites several studies that determined the overall essentiality rate for 4G and 5G. Here, Sabattini cites the Concur IP study that was part of the expert witness report of witness Dr. Zhi Ding in the TCL v. Ericsson litigation case, as well as several studies published by David Edward Cooper from Hillebrand Consulting, who is an Ericsson commissioned subject matter expert and who also testified in court, e.g. for the Unwired Planet v. Huawei case. Finally, Sabattini also mentions the EU commission 2017 study conducted by IPlytics:
The next industrial revolution will not only impact the smartphone and computer world but will spread to many more industrial verticals. Automotive, manufacturing, energy, health care, and MedTech are among the industries most likely to be impacted by connectivity, as they have high-value equipment that is constantly networked and needs to handle massive amounts of data. Standards such as 5G or Wi-Fi 6 (802.11ax) will connect industrial machinery and robots allowing for remote control, monitoring, and repair, as well as industrial automation. From smart grids to drone control, energy and utility, companies will rely on standards to handle massive data. Connectivity standards will be used by hospitals and medical equipment manufacturers to provide data to a variety of tablets and fixed machines, as well as to enable remote surgery. Enhanced monitoring and automation are likely to assist industries as diverse as agriculture and finance. Online shops will increasingly turn to virtual reality experiences. 5G based tracking will emerge in the logistic sector. Edge computing and low latency of 5G and the improved compression of the versatile video coding (VVC) standard will be used in the gaming business, as well as in general augmented and virtual reality applications. As transportation operators rely on connectivity standards to connect smart city infrastructure, media companies will boost mobile streaming speeds and quality. Over the next few years, when advanced cellular, wireless and video standards replace existing protocols, these developments will occur swiftly.
One of the major challenges when licensing, transacting, or managing Standard Essential Patents (SEPs) is that there is no public database that provides information about verified SEPs. Standard-setting organizations (SSOs) such as ETSI (4G / 5G), IEEE (Wi-Fi), or ITUT (HEVC/VVC) maintain databases of so-called self-declared patents to document the fair, reasonable and non-discriminatory (FRAND) obligation. However, SSOs do not determine whether any of the declared patents are essential, nor are the declarants required to provide any proof or updates. As a result, in the course of licensing negotiations, patent acquisitions, or litigation, the question about which patents are essential and which are not is one of the most debated when negotiating SEP portfolio value, royalties, or infringement claims. Artificial Intelligence (AI) solutions have started to support the process of understanding how patent claims relate to standards to assess larger SEP portfolios without spending weeks and months and significant dollars on manual reviews by technical subject matter experts and counsel.
With multiple reports published by many different entities on 5G leadership, it is hard to know who to believe, as there is little transparency about where the data comes from and what types of analysis were applied to retrieve the results, let alone how to try to reproduce any such analysis yourself. Most of the time, understanding standard essential patents (SEPs), standards and patents requires access to multiple databases, the valuable time of your subject matter experts, as well as both in-house and outside counsel. In the end, it can appear that you are spending far more resources on gathering the data than on gaining actionable knowledge from it to understand what it means to your business, your portfolio and your strategy.