Support IPWatchdog with an individual sponsorship: Click here
“Wi-Fi 6 is poised to play a pivotal role in the next wave of technological advancements, serving as a cornerstone in the connectivity standards driving innovation.”
Connected devices like phones, laptops, tablets, and routers as well as smart homes, smart cars, smart factories, and smart cities are just a few examples of what’s possible today thanks to the technical advancements of widely implemented Wi-Fi 6 technology. Consequently, the licensing of Wi-Fi 6 Standard Essential Patents (SEPs) has become a significant global challenge, leading to a rise in litigation worldwide. Realizing the full potential of Wi-Fi 6 and integrating the standard into next-generation products requires navigating the complex landscape of thousands of SEPs. SEP holders seek royalties from Wi-Fi implementers across various industries, and these license fees must be factored into the costs as manufacturers bring their products to global markets.
Both the licensing and enforcement of SEPs have seen a notable increase. Wi-Fi SEPs have garnered increasing attention from patent owners, as demonstrated by high-profile cases like CalTech’s $1.1 billion damages award against Apple and Broadcom for infringing Wi-Fi 4, 5, and 6 patents. In March 2024, CalTech also announced a settlement with Microsoft over Wi-Fi patent infringement related to devices such as Microsoft Surface tablets, laptops, and Xbox systems. Beyond CalTech, multiple Wi-Fi SEP holders have intensified their monetization efforts. For instance, Atlas Global Technologies, a subsidiary of Acacia, has actively managed Wi-Fi 6 patents acquired from Newracom and secured a $37.5 million verdict against TP-Link in September 2023. Similarly, AX Wireless Technologies has focused its Wi-Fi SEP litigation on computer manufacturers like Dell, HP, and Lenovo.
Sisvel launched a Wi-Fi 6 patent pool in July 2022, covering SEPs from eight patent owners. Sisvel’s licensing rate for consumer devices is set at $0.50 per unit. The Wi-Fi Alliance projects 5.2 billion Wi-Fi 6 product shipments by 2025. For Sisvel pool members, a royalty rate of $0.50 per device translates to a significant revenue potential of $2.6 billion USD. With active licensing efforts by major Wi-Fi 6 SEP holders such as Qualcomm, Nokia, InterDigital, Ericsson, and Acacia Research outside of the pool, aggregate royalties could reach as high as $2 per device. This would create a total addressable royalty market for Wi-Fi 6 SEPs potentially worth up to $10 billion USD.
Several members of the Sisvel pool have actively enforced their Wi-Fi 6 patents. Recent litigation involving Wi-Fi 6 SEPs includes cases brought by Huawei, which settled a dispute with FritzBox manufacturer AVM and secured an injunction against Amazon and Eero in Germany. Acer is the latest company to obtain a license from Sisvel’s Wi-Fi 6 patent pool. This licensing agreement resolves all patent disputes between Acer and members of Sisvel’s pool, particularly Huawei. As of September 2024, Acer joins 20 other Wi-Fi 6 pool licensees. Wi-Fi-related patent litigation is on the rise and is expected to continue growing as Wi-Fi 6 adoption accelerates—a pattern reminiscent of the surge seen during the transition from Wi-Fi 4 to Wi-Fi 5 between 2011 and 2013. The expansion of Wi-Fi SEP portfolios and significant shifts in the reasonable and non-discriminatory (RAND) licensing IP policy of the IEEE is likely to further fuel this trend.
Litigation trends suggest that Wi-Fi licensors are currently focusing on computer and router manufacturers, as well as home entertainment devices like TV set-top boxes and game consoles, due to the high indoor usage of these products. In contrast, there has yet been lower activity for Wi-Fi 6 SEP licensing in the smartphone market. However, market experts believe this is just the beginning. Other sectors, such as smart HVAC (heating, ventilation, and air conditioning) systems, smart metering, and automotive, are expected to become increasingly targeted by Wi-Fi patent enforcement in the near future.
The Lack of Transparency of SEP Ownership and Aggregate Royalties
Manufacturers and providers of Wi-Fi standard-compliant products and services must be prepared to address royalty demands from patent holders and patent pools related to Wi-Fi SEPs. When faced with these demands, standards implementers often ask two key questions:
- How many Wi-Fi SEP owners and patent pools are likely to seek royalties from us?
- And what is the total royalty amount we must pay for all SEPs associated with the Wi-Fi standard?
Unfortunately, this information is not publicly available. While the IEEE, the organization responsible for developing Wi-Fi standards, maintains a patent declaration database, 92% of these declarations are so-called “blanket declarations” that do not specify the patents covered under fair, reasonable and non-discriminatory (FRAND) terms. This lack of detail conceals the size and significance of a declared Wi-Fi patent portfolio, making it difficult for both Wi-Fi SEP licensors and standards implementers to understand the share of patents, compared to the total stack of Wi-Fi patents, a pool program or a patent owner holds. This opacity creates uncertainty in the market, leaving standards implementers unsure about who will approach them for royalties and how the aggregate royalty demands from all Wi-Fi SEP owners will affect their overall costs. The figure below illustrates the gaps in information with question marks, where the only public available reference point is the Sisvel Wi-Fi 6 patent pool rate at $0.5.
Figure 1: Missing transparency in the Wi-Fi patent landscape
This lack of transparency poses challenges not only for Wi-Fi standards implementers but also for Wi-Fi patent owners and patent pool administrators, who need to demonstrate that their portfolios represent a significant share of the overall Wi-Fi patent landscape.
Identifying Wi-Fi 4, 5, and 6 Undeclared Patents
LexisNexis Intellectual Property Solutions recently published a new report, titled “Who is Leading the Wi-Fi 6 Patent Race”. It presents a unique database of Wi-Fi 4, 5, and 6 patents, extending beyond publicly available information. The report counts active and granted patents (in at least one patent office), and an analysis of Wi-Fi 4, 5, and 6-related patent families by year of first publication reveals an interesting trend (Figure 2). Over the past decade (2014–2024), the cumulative number of Wi-Fi 6 patent families has grown rapidly.
Figure 2: Number of IEEE contributions by generation and publication year
Who is Leading the Wi-Fi 6 Patent Race?
The report highlights Huawei, Qualcomm, and Intel as leaders in both the share of Wi-Fi 6 patents and the number of technical contributions submitted for Wi-Fi 6. The top-ranked ultimate patent owners include chip manufacturers, device makers, and network equipment providers. However, the ranking also identifies Patent Assertion Entities (PAEs)—companies that acquire Wi-Fi patent portfolios primarily for commercialization and enforcement. Notable examples in the top 40 include Acacia Research, which acquired the Newracom portfolio via its subsidiary Atlas Global Technologies, and Vector Capital, which obtained a Wi-Fi portfolio from Intel.
The report underscores that relying solely on patent counts can yield varying results when compared to other indicators of Wi-Fi patent leadership. To address this, it introduces a patent valuation metric, applying the LexisNexis Patent Asset Index to Wi-Fi 6 patent family counts. This approach significantly alters the ranking. For instance, InterDigital ranks 15th when considering only active, granted patent families, but when assessed with the Patent Asset Index, it rises to 5th in the ultimate owner Wi-Fi patent ranking. Unlike many top 10 patent holders, InterDigital derives most of its revenue from SEP licensing, placing a stronger emphasis on the essentiality and value of its SEP portfolio in negotiations and legal disputes.
Wi-Fi Standard SEP Licensors
It is estimated that only one-fourth of the Wi-Fi patents are publicly disclosed in specific patent declarations in the IEEE database or in Wi-Fi patent pools. This leaves Wi-Fi licensors to work with incomplete data. However, a comprehensive Wi-Fi patent landscape is critical for successful SEP licensing. The LexisNexis Intellectual Property Solutions patent landscape for Wi-Fi 4, 5, and 6 reveals related patents that are not listed publicly, providing a more thorough understanding of the patent landscape.
This enables patent portfolio managers to:
- Benchmark such portfolios against competitors
- Make informed decisions on portfolio development and maintenance
Patent licensing departments use the Wi-Fi patent landscape to:
- Present Wi-Fi portfolio shares in SEP licensing negotiations
- Monitor market and ownership changes
- Focus resources on valuable, licensable patents
Wi-Fi Standard Implementers
Manufacturers and providers of Wi-Fi standard-compliant products and services must be prepared to address royalty demands from patent holders and patent pools related to SEPs. In response to these demands, Wi-Fi standards implementers often face the challenge of determining how many SEP owners and patent pools are likely to seek royalties, as well as the total amount they will be required to pay for all SEPs associated with the Wi-Fi standard.
Analyzing standard-related patent landscapes is essential for effective FRAND licensing negotiations. Key questions addressed include:
- Is the SEP owner’s royalty request comparable to Wi-Fi patent pool rates?
- Is the royalty demand in line with FRAND rates identified by economic studies?
- Is the royalty demand consistent with court-determined Wi-Fi FRAND rates?
- Is the patent owner’s or patent pool’s royalty demand excessive or reasonable?
In summary, a comprehensive understanding of the Wi-Fi patent landscape obtained through analytics provides standard implementers with information to negotiate royalties and effectively plan their IP budgets.
Key Considerations for IP Professionals
Wi-Fi 6 is poised to play a pivotal role in the next wave of technological advancements, serving as a cornerstone in the connectivity standards driving innovation. Already implemented in millions of devices across various industries—including laptops, tablets, phones, routers, and also smart homes, smart energy systems, vehicles, and smart cities—Wi-Fi 6’s importance cannot be overstated. The licensing of Wi-Fi SEPs will be a critical area of negotiation between SEP owners and standard implementers, spanning a diverse range of applications and use cases. For IP professionals navigating this space, understanding the Wi-Fi 6 patent landscape is essential. Key considerations include:
- Active monetization: Patent holders are likely to aggressively monetize and enforce their SEP portfolios related to Wi-Fi standards in this dynamic, high-stakes environment.
- Complex SEP landscape: Negotiating within the complex SEP environment will be a major challenge for Wi-Fi adoption. Both SEP owners and implementers must manage operational and financial risks while maximizing the value of Wi-Fi 6 technologies.
- Lack of public databases: There is no public database for Wi-Fi 6 patents, and patent pool data as well as standards contributions serve only as a starting point, making it difficult to accurately identify all Wi-Fi 6 patent owners and their respective shares.
- Efficiency through AI: Leveraging AI-driven Wi-Fi patent identification methods enhances the efficiency of understanding global Wi-Fi patent landscapes.
- Correlation with standards contributions: Rankings based on standards contributions often correlate with patent rankings, making them valuable for competitive intelligence and another reference point in SEP licensing negotiations.
Image Source: Deposit Photos
Image ID: 531424506
Author: katie.chizhevskaya
