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

On November 9, 2022, Sisvel International S.A. announced its Cellular IoT Patent Pool, 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 June 17, 2022, related to a portfolio of standard essential patents (SEPs) for LTE-M and NB-IoT owned by Huawei.

LTE-M and Narrowband Internet of things (NB-IoT) are low-power wide-area network (LPWAN) radio communication technology standards created by 3GPP 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 Radio Frequency spectrum 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 Tracking Area Updates (TAUs). 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 Discontinuous Reception (DRX) and Power Saving Mode (PSM). 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 standard-essential patent 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 (FRAND) 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 Beecham Research. 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 https://ssrn.com/abstract=2759027