Thursday, July 16, 2009
LTE IPR Royalty Rates
Qualcomm revealed that the company had put royalty rate at 3.25 % for LTE patent licensing.
Nokia expects Nokia’s rate for devices that deploy LTE as the only wireless communication standard to be in a range of 1.5 % from the sales price of an end-user device. To avoid unfavorable effects of royalty stacking, Nokia will not charge royalties higher than 2.0 % from the sales price of an end-user device for IPR that is essential to wireless communication standards irrespective of the number of wireless standards deployed in such a device.
Ericsson said all of its LTE agreements will be made according to Ericsson's proportional share of the standard IPR that relates to the relevant product category. Ericsson likewise honors the same industry practice by ensuring a maximum cumulative rate on LTE technology not exceeding a single-digit rate. Ericsson´s fair royalty rate for LTE is therefore expected to be around 1.5 % for handsets.
Nortel will charge about 1 % of sales for use of its LTE patents, which is less than the 1.5 % rate another manufacturer has announced, Danny Locklear, Nortel’s director of global wireless marketing.
Huawei believes it will hold 15-20% of all essential patents relate to LTE standard, therefore, a royalty rate with some flexibility, but not to exceed 1.5 %, is expected.
ZTE will license its LTE essential patents for mobile communication terminals with a maximum 1 % from the sales price of an end-user device. However, ZTE will not be restrained to this amount, if ZTE is involved in any licensing negotiations. While in multi-mode terminals, ZTE will follow similar principle in setting the royalty rate for LTE essential patents, which will be determined in bilateral negotiation.
Motorola expects that its essential patent royalty rate for LTE systems and equipment (e.g. infrastructure and subscriber handsets) will be approximately 2.25 %.
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