The race for supremacy in 5G technology is fierce. With the dawn of 5G, the next generation of global wireless standards promises a future that is faster, smarter, and more connected. This technology’s impact spans various domains, from autonomous driving to the Internet of Things (IoT) and Virtual Reality (VR). But who is leading this 5G patent race in 2023?
LexisNexis IPlytics, a leading provider of data and analysis on standard essential patents (SEPs), technical standards, and standards contributions, offers a comprehensive report aptly titled “Who Is Leading the 5G Patent Race? 2023.”
We had the pleasure to interview LexisNexis IPlytics CEO and Founder, Tim Pohlmann, to delve deeper into the findings of this report.
Key Findings and Trends
The 5G landscape has seen remarkable growth. Tim Pohlmann highlights the main findings: “The report clearly shows that the patent race in the 5G area has massively increased in speed. The number of companies owning declared 5G patents has grown by a factor of four within the last eight years.” Furthermore, the number of declared 5G families has surged, nearly 2.5 times that of 4G.
While the field has expanded, the concentration remains: “Despite the strong increases in players and SEPs, we still see strong concentration, with the top 10 players owning 76% of 5G-declared patent families.”
In terms of regions, LexisNexis IPlytics CEO reveals the frontrunners: “With more than 28,000 granted and active patent families, the US is the jurisdiction with the highest volume of 5G patent protection, followed by China with about 26,000 and Europe with almost 15,000 5G patent families. While it is worth noting that there are huge overlaps; more than half of all 5G SEP declared patent families are active in both the US and China.”
However, the heart of the report lies in the top 50 ranking, where Huawei, Qualcomm, and Samsung Electronics dominate. InterDigital, Inc. impressively jumps to 5th place when considering the Patent Asset Index. Pohlmann further notes the significant contributions of Huawei, Ericsson, and Nokia to 5G standards.
Beyond these quantitative insights, the report provides practical guidance on how advanced patent analysis can inform and support SEP licensing activities.
The Role of Chinese Companies
One cannot overlook the role of Chinese companies, particularly Huawei. Tim explains: “The number of active and granted 5G patent families is increasing worldwide, with the US and China leading the way in volume. A massive increase in volume is often accompanied by a decline in average patent quality. However, this does not apply to the USA, Korea, and China. They have all maintained above-average portfolio strength compared to other regions. Overall, Chinese companies make up 24% of the top 50, with the majority being licensees rather than licensors. But it’s no surprise that Huawei, being the world’s most important licensor of 5G SEPs, currently tops the 5G patent rankings, ranking #1 in the number of 5G patent families and also #1 in the amount of 3GPP contributions.”
Huawei’s influence extends beyond smartphones. “Huawei appears to have increased its focus on the automotive industry, ” Pohlmann points out. With a strong presence in the V2X patent portfolio, Huawei is poised to shape the future of vehicle-to-vehicle, vehicle-to-pedestrian, and vehicle-to-traffic control communications. This versatility shows Huawei’s superpower status in the 5G sector.
“While some view Huawei’s patents as a competitive threat, their patents could also be seen as an opportunity for cross-licensing or access to unique 5G innovations. Regardless of geopolitical sentiments, Huawei is willing to make its developments available to the world and monetize them via patent pools.”
The Data Collection Process
Understanding the 5G patent landscape is no small feat, but LexisNexis knows its way around it. Tim Pohlmann sheds light on their methodology: “To enable strategic decision-making based on analyzing standard essential patent declarations, LexisNexis collects data from the European Telecommunications Standards Institute (ETSI), an additional 22 standard-setting organizations (SSOs), and various patent pools. The raw data is cleaned and matched to worldwide patent office data to retrieve legal status information to identify whether a patent is active (not expired, not lapsed, or revoked) and granted across worldwide jurisdictions.”
But it doesn’t stop there. The contributions to standards are equally crucial. “Regarding contribution data, we provide full-text indexed data to allow advanced analytics,” Pohlmann notes. “All this data is then made accessible within LexisNexis IPlytics to classify patents and contributions, identify SEP owners, map patents to standards, analyze patent landscapes, and more.”
“To give you an example in the SEP space, it is crucial to understand who ultimately controls a patent. Since September, we have applied the tested and mature LexisNexis Ultimate Owner concept to our SEP database. We track changes of ownership and aggregate patent portfolios to the highest parent company using extensive corporate tree data and applying automated and human checking procedures that exceed the quality checks recommended by the World Intellectual Property Organization (WIPO).”
Tim emphasizes the commitment to data quality: “Since IPlytics belongs to LexisNexis, enhanced data, resources, and processes are used to ensure the highest quality of SEP data is provided to our customers.” This meticulous approach ensures that businesses, policymakers, and industry players have access to the most reliable and up-to-date information.
Staying Ahead of the Game
The 5G landscape is ever-evolving, but LexisNexis IPlytics is prepared to keep up. Tim explains, “Keeping pace with the speed of 5G innovation and standardization is a challenge, with thousands of new 5G patents being declared every year, ownership changes, patents are granted or expiring, and new standard versions are released. Essentially, we pursue two approaches in order to maintain an up-to-date view of the 5G world and make it accessible to our customers.“
“The first approach is data-driven. I can proudly say that we probably have the most extensive data collection process and can therefore provide the most comprehensive data set of 5G SEP declarations. We are getting updates from more than 30 data sources and update the IPlytics platform on a weekly basis so our customers continuously have updated information at their fingertips.”
“The second approach to always staying up to date with current 5G developments is to maintain close contact with our customers. For us, it’s not about software as a service; we’ve always been more concerned with supporting our customers in getting as transparent a picture of the market as possible. We have fostered relationships worldwide over the years and enjoy the daily exchange across all verticals in the 5G business, be it smartphone developers, infrastructure providers, telecom companies, implementers, or patent pools. All of these value us as objective consultants. They are our eyes and ears to the market and help us to validate our data curation processes and software developments.”
Challenges and Opportunities in the 5G Patent Landscape
The expanding landscape comes with both challenges and opportunities. Pohlmann offers insights: “With an increasing number of 5G patent holders and licensees, the 5G landscape is increasingly complex. Without access to a comprehensive and refined database, companies will find it difficult to understand the market size and assess their market share and potential impact, making licensing negotiations hard to prepare and manage.”
However, the growth in 5G technology usage across various industries broadens the horizon. “The opportunity is that more and more industries are using connectivity standards such as 5G, which increases the royalty target market for 5G licensors and enables more use cases for the 5G standard implementers to sell products and services to its customers. As 5G technology will be used in other industries in the future, further patent pools will likely enter the market that will specialize in specific industries,” Tim explains.
The Future of 5G Patents
Looking ahead, Pohlmann expects significant developments in the 5G patent landscape. “I expect the 5G patent landscape to evolve in the coming years. More 5G-related patents will be declared as standard essential,” he predicts. “As 5G gets embedded into more devices, consumer electronics companies may contribute and declare more SEPs related to devices, chips, sensors, etc. Automotive giants and industrial companies may start building their own 5G patent portfolios as use cases emerge around vehicles, factories, etc. But we will also see more 5G applications across new industries beyond smartphones and vehicles, such as smart metering, smart manufacturing and automation, smart healthcare devices, and new use cases in logistics.”
“All these factors will bring new players with foundational patents in the 5G spaces,” Tim continues. “We expect an additional 10,000 5G SEP families next year.” According to Tim, as the landscape expands, licensing negotiations and litigation may increase, affecting licensing costs.
“While a lot of attention is typically given to Chinese companies, they will likely continue to dominate the market; one could easily overlook the importance of Korea,” says Tim Pohlmann.
“In terms of overall portfolio size, Korea outperformed the US already in 2021, and they continue to grow their portfolio. Regarding average patent family strength, Korea scores beyond China. It will be interesting to follow the development of Samsung, LG Electronics, ETRI, KT Corporation, and others.”
Tim’s recommendations for embracing 5G
Navigating the complex 5G patent landscape requires careful planning. Pohlmann provides key recommendations: “Organizations will be best positioned if they seek to participate in standardization work actively. That might be the best way to impact the market and be at the forefront of developments.”
For IP professionals, he recommends a strategic approach: “Consider or predict the future business needs in the next two, five, and ten years and what patent portfolio will support them. Identify high-risk patents and, similarly important, the SEP gems that will help them monetize and generate ROI on their 5G patent portfolio.”
Tim emphasizes the value of patent pool collaboration: “Reducing the risk of litigation and simplifying licensing can be facilitated by joining a patent pool; thus, they should closely follow the development of pools. Patent directors and licensing executives should also explore opportunities to collaborate with other implementers and jointly license patents. As the standards and products evolve over time, it will be highly important to negotiate flexible terms to allow adaptation.”
Data is a crucial asset, according to Tim: “In such a complex environment, access to accurate and curated data on patent declarations, pools, and standards contributions is key to understanding patent landscapes and the value of 5G portfolios when licensing, joining pools, or acquiring and selling SEPs.”
Tim’s ultimate recommendation is clear: “Always seek maximum transparency, back decisions with evidence-based data, and act fast and proactive. This will keep you at the forefront of innovation and prevent you from falling behind.”
Tim Pohlmann’s insights offer a glimpse into the dynamic world of 5G patents. As this technology continues to reshape industries, staying informed and prepared is the key to success.
In the words of Tim Pohlmann, CEO and Founder of LexisNexis IPlytics: “It is all about planning for future evolution… This will keep you at the forefront of innovation and prevent you from falling behind.”
As the 5G journey unfolds, one thing is certain: LexisNexis and Tim Pohlmann are leading the way in providing the insights and data necessary for informed decision-making in the rapidly evolving 5G landscape.