Amin Hosseini is an IPilogue Writer and an LLM Candidate at Osgoode Hall Law School.

On , Sisvel International S.A. announced its Cellular IoT , consisting of 20 patent owners. By establishing this patent pool, the participating patent owners will create an offer to license all of their Patents required to implement the LTE-M and NB-IoT standards. Interestingly, Huawei Technologies and Nordic Semiconductor have also entered into a patent license agreement on , related to a portfolio of standard essential patents (SEPs) for LTE-M and NB-IoT owned by Huawei.

and are radio communication technology standards created by for Internet of Things (IoT) applications. The cellular LPWAN IoT standards LTE-M and NB-IoT evolved from the 4G LTE standard.

LTE-M is a subset of LTE technology designed specifically for machine-to-machine communication. LTE-M enables IoT devices to send and receive enormous volumes of data without depleting their batteries. It has a latency of about 10-15 milliseconds and can enable cell handovers. On the other hand, NB-IoT employs shorter frequency bands, allowing this technology to exploit the more effectively. For NB-IoT, latency is roughly 10 to 100 times lower, and coverage is far broader.

Cellular networks exist to facilitate connection between devices. To keep the device connected to the nearest towers, they often ping cellular devices around them to acquire location. The battery is depleted by these constant . Thus, most IoT devices require substantially long-lasting batteries, and they consume a significant amount of energy.

LTE-M and NB-IoT provide IoT applications with effective connectivity. Batteries in LTE-M devices can survive ten years or longer because of features called and . IoT devices can employ their power-saving mode with these standards, allowing them to sleep when not in use. Additionally, they can prolong their sleep, so they do not have to wake up to send the location update. Devices can employ extended discontinuous reception with LTE-M. When the device is not in PSM mode, it frequently checks for downlink data. With extended discontinuous reception, the frequency of radio check-ins is extended, which lowers power usage.

In addition to the technological effectiveness of these standards, Sisvel’s patent pool helps makers of IoT devices by providing a clear structure for getting licenses under the pool's portfolio of LTE-M and NB-IoT SEPs. Generally speaking, bilateral licensing would be costly between a vast and rising number of businesses and holders. By setting up this patent pool, it is expected that transaction costs will be decreased for IoT projects.

With this Cellular Patent Pool, licensees can finalize a single license for various licensor portfolios and prevent royalty reporting and payments for each licensor. And, with multiple licensees, a fair, reasonable, and non-discriminatory () license for such SEP portfolios is feasible. Moreover, by providing licenses with standardized, pre-established terms and conditions, we may lessen prejudice among licensees. Due to the fair total royalties provided by patent pools, the potential patent hold-up by individual licensors could not be a grave concern.

A large percentage of IoT projects do not produce the anticipated results, or simply put, they fail. Recently, in-depth research on IoT initiative failure has been published by . The research concludes that nearly three-quarters of IoT projects are not considered successful.

 However, this unsuccessful rate has nothing to do with the IoT concept. IoT businesses have to deal with many challenges and risks such as unanticipated costs including litigation, inaccessibility to required technologies, and failure to develop a properly-designed business model. This Patent pool, along with other measures, is a viable solution to such concerns. Sisvel’s cellular IoT patent pool is a giant leap for IoT businesses which is set to encourage competition, market involvement, and greater commercial and legal certainty in the IoT industry.

Further reading:

To read more about the transaction costs savings engendered by patent pools, please see Measuring the Costs and Benefits of Patent Pools, Available at

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The main issue of the dispute is concerning Microsoft’s use of the H.264 codec for video recording, compression and distribution. It is one of the most commonly used formats in the computing industry and used almost ubiquitously for all high definition video. Microsoft uses the codec in a number of the programs PC-owners use on a regular basis (such as Internet Explorer and Windows Media Player) and within its gaming system – the Xbox 360.

A Mannheim, given in late April would have the effect of instituting a ban on sales of Microsoft products such as Windows 7 and the gaming console. Currently, Motorola has been unable to institute the sales ban due to another lawsuit between the two companies that is being conducted . Not long after the German ruling, the US International Trade Commission that was also hearing the matter and has recently determined that the patents had been infringed by Microsoft. Following the decision, Judge David P. Shaw of the ITC has on the infringing products, a decision that could have huge implications on the profits of the tech giant. Microsoft still has some breathing room as the on to both the ITC board of commissioners and the Obama administration.

During the proceedings, that Motorola’s approach to licensing the codec did not follow the FRAND (fair, reasonable, and non-discriminatory) principles – guidelines that are applied in order to promote healthy and competitive markets worldwide. The nature of many products requires the use of industry-standard technologies – the patents to which must be licensed at reasonable rates to allow other companies to compete. Issues will begin to arise when the companies that own these patents begin to abuse their position.

As a result of a number of lawsuits concerning similar issues between tech companies, Jon Leibowitz – Chariman of the Federal Trade Commission, that the FTC will likely look into injunctions issued over the use of standard and essential patents. These investigations would likely relieve Microsoft in the interim of a sales ban, and would at least provide some time to deliberate with Motorola on a reasonable licensing fee for the infringed technologies. During the ITC hearing, that Microsoft should make a royalty payment which would amount to roughly $4 billion annually.

Many lawsuits have arisen in recent years due to the growing market share of smartphones and technological devices. Patent rights were developed to spur innovation, but as the tech giants like Google and RIM have padded their patent portfolios through acquisitions and mergers, the trend seems to be moving towards patents as a means to attack other companies and reduce or eliminate competition. While I hope that Motorola is not attempting to abuse their position of patent power, they should keep in mind that there is a fine line between utilizing patents to protect innovation and using them to gain an unfair advantage in business dealings.

Adam Del Gobbo is a JD Candidate at Osgoode Hall Law School.

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