TechIPm, LLC’s 4G LTE standard essential patent research for the US market reviles that NPEs’ IPR share accounts for 21% of 4G LTE Standard Essential Patents (SEPs) issued in the USPTO as of October 25, 2013. To evaluate the essentiality of a LTE patent, patent disclosures in claims and detail description for each 4G LTE patent are compared to the final versions of the 3GPP Release 10 technical specifications (LTE-Advanced). Total of 215 issued patents are identified as the potential candidates for 4G LTE SEPs relating to UE (cellular phones, smart phones, PDAs, mobile PCs, etc.) and base station (eNB) products.
Recently, in In re INNOV A TIO IP VENTURES, LLC, No. 1:11-cv-09308 (N.D. Ill. 2013), Dkt. No. 975, the court calculated FRAND royalty of WiFi SEPs: (average profit margin to the contribution of patentee’s SEPs) x (profit margin of relating products) x (pro rata share of patentee’s SEPs to the total number of WiFi SEPs providing similar contribution to the profit). Similar calculation can also lead to the FRAND royalty cap for 4G LTE SEPs. Considering the huge profit margin of 4G LTE UE and base station products in the US market, the amount of licensing royalty earnings generated by NPEs’ 21% IPR share of 4G LTE SEPs will reach billion dollar level.
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