Friday, March 5, 2010

Nortel's LTE Patents Valuation

Nortel's patent portfolio for LTE baseband products (OFDM/MIMO Modem and Channel Coder) in the lists of patents declared essential to LTE appear at the ETSI IPR Online shows that there are 17 issued patents and 14 published patent applications in the United States as of January 31, 2010. Among LTE patent licensing contenders for the US LTE baseband product market, Nortel's IPR share was about 10 %.

To evaluate the essentiality of Nortel's LTE patents for OFDM/MIMO standards, patent disclosures for each essential patent candidate are compared to the technical specifications for LTE OFDM/MIMO standards. Only 11 out of 31 patents are evaluated as strong candidates for LTE essential patent.

Assuming a licensing share of 10% for $2 billion global end-user LTE device silicon market according to market research firm In-Stat and 10 years of licensing time, the value of the Nortel's LTE patent portfolio is roughly estimated to be about $0.4 billion for 2% royalty rate.

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