Yesterday, IAM reported that Via Licensing was going to discontinue its wireless patent pool business in order to focus on its wildly successful codec pools--and said Sisvel, the sole remaining pool of wireless standard-essential patents (SEPs) for mobile devices, as "throwing open its doors to former Via licensors." Sisvel itself issued the following statement, which sounds like "yes, but not so fast":
"On April 26, 2022, Via Licensing announced that they were dissolving certain wireless pools and will likely contribute the wireless patents owned by Via to a 5G pool under formation by Sisvel [pointing to IAM]. Sisvel is in the process of initiating discussions with Via pool members regarding joining the Sisvel 5G pool.
"Sisvel feels that a single pool incorporating key patents from the Via and Sisvel pools will create more value for licensees and accelerate adoption by 5G implementers. This, in turn, will accelerate royalty revenue back to the patent owners and enable further innovation for future cellular generations."
It is indeed interesting that Via made this decision as the industry is transitioning to 5G. This is now the time either to go all in on 5G, the To Be Or Not To Be standard of the 2020s, or to get out of the market. It's easy to see why Via's management looked at how one category of pools was performing for them versus another. The ROI of dedicating precious management bandwidth to a sluggish cellular pool just can't compete with the alternative of focusing on where they have momentum. That's how a market economy picks winners and losers within a portfolio.
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.
Still, it is now up to each and every one of those roughly 30 Via licensors to decide. Maybe some believe the time has come for them to focus exclusively on bilateral licensing (like the Ericssons and Nokias of the world, which transact directly with consumer electronics makers), while others will determine that they can actually have it both ways by joining Sisvel's pool and still doing direct license deals (which is also the way it works with Avanci).
In addition to the statement I quoted from, Sisvel published a two-page Q&A (PDF) on the implications of Via Licensing's decision to exit from cellular SEP licensing. In that PDF, Sisvel emphasizes that "there is the unique opportunity to create a single, more effective and powerful license proposition that will be better for both the patent owners and implementors [...] unlocking to the maximum extent the transactional efficiencies that patent aggregation allows for."
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. It took Avanci some time to build serious momentum, but it's now on a roll (though some automotive naysayers like Continental refuse to acknowledge it). Sisvel interestingly contributed its own (assigned, not administered) patents to the Avanci pool, which was probably a first in the world of patent pools as Sisvel technically competes--as a pool administrator--with Avanci's parent company, Marconi. 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.
Why would or wouldn't Via's cellular SEP licensors join Sisvel's pool?
As someone who closely monitors cellular SEP 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. If the current situation had hypothetically arisen about a decade ago, I'd probably have had compatibility concerns. Not so anymore.
In 2015, I commented on Google joining Via Licensing's LTE pool and interpreted that decision as Google distancing itself from its prior FRAND abuse (for which it was even ordered to pay Microsoft damages). A number of Via's major contributors clearly prioritize implementers' interests, though just like any pool, Via, too, depended on its licensors' willingness to enforce if need be (such as against TCL, a dispute I discussed last summer).
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.
In that document, Sisvel stresses that the terms for former Via licensors joining the pool now will be just as advantageous as for Sisvel's longstanding partners--and "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." So IAM had a point when describing the situation as Sisvel "throwing open its doors to former Via licensors." It does look like they're committed to a smooth transition for all parties with an interest in making it work.
Of course, if Sisvel's pool grows, its royalty rates will increase, and then it wil have to be worked out with existing and future licensors to what extent they may already be licensed, be it through Via's pool or bilateral agreements. That's the bread-and-butter business of patent pools. Avanci worked it out with Daimler despite Daimler previously having taken a direct license from Nokia, Sharp, and Conversant. I venture to guess Sisvel has addressed such situations, too.
I'll keep an eye on announcements of Via licensors joining Sisvel's cellular SEP pool for consumer electronics products. The question is an important one for this industry, and the time may be just right for consolidation.
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