"Video Streaming Royalty Stack Best Left to Devices," say Economist

The Brattle Group determined in a recently released report the aggregate value of video streaming technologies is already taken into account through existing device based royalty rates. Brattle considered various video codecs, streaming protocols, content delivery networks, and media players while excluding other technologies like wireless and Internet protocols.

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The report follows the Club Goods economic theory, to determine viewers should pay a fixed fee irrespective of how much content is consumed. The value allocable to each patent holder should consider the substitutability of their patents and the component technology they cover.

Brattle determines a device-based royalty market has generated competition amongst various codecs, thus ensuring that innovation in this space remains vibrant and healthy while minimizing issues such as royalty stacking and double counting. Otherwise, they conclude there will be significant issues with a streaming-based royalty given so many different subscription models including ad based, annual, one-off live events, etc.  

The report was prepared for Unified Patents and is exclusively available to Unified Patents Video Codec Zone members. To join the Video Codec Zone or for more information on the Brattle report, please contact info@unifiedpatents.com.

World’s 1st Wi-Fi Economic Report finds RAND royalty rate to be between $0.04 and $0.69

Unified Patents and The Brattle Group, a renowned group of economists and damages experts, announced its economic report on the reasonable and non-discriminatory (“RAND”) licensing value of patents essential to the Wi-Fi standard (“Standard Essential Patents” or “SEPs”). The full report is available exclusively to members of Unified Patents’ Wi-Fi Zone, which includes access to Unified’s ML-based objective patent landscaping analytics (“OPAL”) and indexed IEEE standardization technical submissions repository (“OPEN”).

Brattle calculated the range of reasonable and non-discriminatory (“RAND”) royalty rates for the universe of SEPs essential to implement the full capabilities of Wi-Fi, including up to Wi-Fi 6/6E, to be between $0.04 and $0.69. For the first time an economist calculated rates based on device capability requirements using downlink speed, latency, and a new power-saving capability implemented in Wi-Fi 6 called target wake time (“TWT”). Brattle concluded that Wi-Fi devices that utilize lesser capabilities should pay lower royalties, if any, because almost all SEPs necessary for those have expired.

Brattle calculated royalty rates on Wi-Fi using two independent observations. First, using court-established global RAND rates for Wi-Fi 4 (such as the 2013 Innovatio case) as a benchmark, taking into account incremental technological improvements in Wi-Fi 6/6E, declining production costs, current and evolving use case demands, and balanced bargaining theory, they concluded rates should be steadily declining. Second, a negotiated Wi-Fi 6/6E license between a licensor and a major hardware manufacturer. Both methods accounted for objective patent quality using court accepted measures such as adjusted patent forward citations. Unified’s OPAL analytics, which includes the world’s largest training set of manually evaluated Wi-Fi patents, was used to identify the individual SEPs in the landscape. In addition, Brattle calculated the stand-alone value of TWT.

For its report, Brattle interviewed industry participants and did independent research. It found Wi-Fi 4’s capabilities are sufficient for data-intensive use cases like video, gaming, and most virtual reality (“VR”). Brattle noted producer prices and consumer prices have been flat or falling for over a decade while computing and communications performance has improved by a factor of over 50 times.

The report is designed to be used for a top-down analysis of Wi-Fi RAND rates. Together with Unified’s OPAL analytics, the report can be used to calculate the RAND rate of any patent portfolio for Wi-Fi devices based on their capability requirements as well as for individual Wi-Fi capabilities. The report and OPAL provide Wi-Fi implementers a better understanding of the value of an asserted portfolio and enables them to make RAND counter offers in good faith. OPAL also enables the identification of individual patents in an asserted portfolio and provides a suite of quality metrics such as ML-based semantic similarity scoring and geographic and reputational value, forward citation, claim breadth, and statistical validity indexes.

The full report is available exclusively through Unified Patents. In addition to economic reports, Unified provides Objective Patent Landscapes (OPAL) for many standards, including Wi-Fi 6, with the world’s largest human evaluated training set, 3GPP LTE and 5G, HEVC, AVC, and others. Unified’s standard submission database, OPEN, allows users to access all contributions to major standards such as 3GPP, MPEG, IEEE, and IETF.

Download Unified Consulting’s Wi-Fi Economic Report slides presented at this year’s Corporate IP Strategy Conference in November.

5G value to cars found to be less than $10

The June 2022 Brattle Group report calculates Fair, Reasonable And Non-Discriminatory (FRAND) royalty rates for wireless Standard-Essential Patents (SEPs) in vehicles for both 4G/LTE and 5G. 

Brattle found that wireless technology is increasingly expanding from handsets to the Internet of Things (IoT), including “connected vehicles.” LTE royalties for handsets (unlike those for vehicles) have been market and court tested, offering clarity around applicable FRAND rates for handsets. Rates for vehicles thus were calculated using LTE handset rates as a benchmark; adjusted for the differences in usage and capabilities. Brattle also found royalty rates for 5G as applied to vehicles to be the same as LTE because 5G rates have not been market or court tested and 5G currently offers no additional value to vehicles over LTE. While some 5G connected vehicle applications may create value in the future, that future is still uncertain and years away. Brattle notes that widespread adoption of 5G connected vehicle applications is necessary before any appreciable value can be attached to them.  

Brattle uses two distinct approaches to obtain an independent, FRAND rate. The first identified a vehicle’s Telematics Control Unit (TCU) as the key licensable component and calculated a FRAND rate of $6.57 per vehicle for a comparable TCU-capable handset, adjusted for the lower connectivity and usage requirements of vehicles.

The second approach uses the consumers’ relative willingness to pay for wireless connectivity in different applications as an indicator of the relative value of a 4G license in those applications, and found that consumers value connectivity in vehicles significantly less than in handsets. Using this approach, Brattle found the rate to be $7.76 per vehicle.

The full report and other 5G tools are available exclusively through Unified Patents.  In addition to economic reports, Unified provides Objective Patent Landscapes (OPAL) for many standards, including 5G and LTE, with the world’s largest human evaluated training set, Wi-Fi 6, HEVC, AVC, and others.  Unified’s standard submission database, OPEN, allows users to access all contributions to major standards such as 3GPP, MPEG, IEEE, and IETF.

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