4G auction could trigger patent disputes

There will be tense times ahead for the 4G auction winners, announced February 20 2013, as they prepare to roll out their 4G hardware and costly patent disputes should not be ruled out, according to patent experts at Withers & Rogers.

The telecoms regulator, Ofcom has raised £2.3bn from the 4G auction and the winning bidders have been announced. They are EE, Hutchison 3G UK (the owners of the ‘3’ brand), Niche Spectrum Ventures (a BT subsidiary), Telefonica (O2’s parent company) and Vodafone.

For the successful bidders, there will be more tense times ahead as they begin to roll out the required hardware and prepare to launch 4G services, which could potentially lead to disputes over the use of patented technologies, causing costly disruption.

For example, following the 3G auction, the maker of Blackberry handsets, Research in Motion (RIM), settled a worldwide patent dispute with Visto, paying $267m as a one-off payment. This allowed RIM to continue using their preferred push email technology and ensured their systems remained attractive to the business user.

One would anticipate that the mobile network operators have learnt lessons from the RIM/Visto debacle, and that they have undertaken patent infringement clearance checks so that they will not be on the wrong end of a patent lawsuit. 

This should make such disputes less likely, but they are still possible. Operators will be hoping that all the checks they carried out in the run up to the auction to ensure that they are free to use the relevant standard essential and non-essential patented technologies are accurate. They will also be hoping that licence agreements have been obtained by their suppliers where appropriate.

When it comes to 4G take-up, the main issues for consumers, other than price, will be network coverage, reliability of service and download speeds.

EE launched their 4G service at the end of last year, but that service has attracted criticism and fallen short of expectations. The winning bidders will be hoping that their 4G services are now ready to deliver to a high standard.

Among the winning bidders, we can see that some have been investing in R&D more heavily than others – for example, EE’s parent companies (Deutsche Telekom and France Télécom) and BT are known to have always had a strong focus on R&D and have respectively filed over 4,000 and 2,400 European patent applications over the years, compared to Hutchison 3G’s group companies who have only filed 23 European patent applications.

In the middle, we have Telefonica’s German and Spanish subsidiaries who have filed around 150 European patent applications.  Such data may provide some indication of an individual player’s degree of readiness to deliver a reliable 4G service across the network.