Linked by Thom Holwerda on Mon 2nd Jun 2014 12:45 UTC
PDAs, Cellphones, Wireless

iTnews points to a study performed by Joseph J. Mueller and Timothy D. Syrett of IP firm WilmerHale, and Ann Armstrong of Intel, which concludes that for an average $400 smartphone (no subsidies), patent royalty costs may be higher than component costs.

Indeed, the royalty data shows that the potential royalties demands on a smartphone could equal or even exceed the cost of the device's components. To be sure, for the reasons described above, many of the so-called "headline" rates on which these royalty figures are based may not withstand negotiation or litigation, but they have nonetheless been sought (and received) from some licensees. With the addition of royalties for the components/technologies for which we did not have sufficient data to include royalty figures, the total potential royalties would increase. Without access to the actual royalty figures paid by smartphone suppliers it is impossible to know for certain their magnitude. But our research demonstrates that they are likely significant. Indeed, the available data suggest that the smartphone royalty stack may be one important reason why selling smartphones is currently a profitable endeavor for only a small number of suppliers.

Let me repeat that last line for you - savour it and let it sink in.

Indeed, the available data suggest that the smartphone royalty stack may be one important reason why selling smartphones is currently a profitable endeavor for only a small number of suppliers.

Bingo. This is exactly why the patent system will never change: this construction benefits the large players immensely. Smaller players will have a hard time keeping up with the patent costs, since they most likely won't have much to barter with patent-wise. The result is less competition for established players.

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anda_skoa
Member since:
2005-07-07

I personally find it mind boggling that people would think that potentialy monetarization is necessary for research to happen.

This kind of "research for profit" is a very recent development in human history, tens of centuries of research were done without that.

Research is not just the search for solutions to a problem, it is a means of gathering understanding of why and how things happen.

As one of my professors at Universitay put it: a thesis doesn't have to come up with a solution to a problem, eliminating a number of possible solutions is equally valuable research.

Reply Score: 4

CapEnt Member since:
2005-12-18

It's indeed a very recent development. And this scientific and industrial revolution coincides with the greatest revolution in economics of the history of mankind, indeed, was fueled by it. In this short period of one century we surpassed by far what was done in the last 20 thousands years of recorded history.

I agree with you that we don't need a drive for profit to engage in research, but profit is a powerful drive for innovation.

I don't like the current patent system, but replacing it with some fancy utopia is just as bad as keeping it as is today.

The patent system is arguably idiotic in dealing with genetics, software, pharmaceuticals, nanotechnology, educational research... and the list goes on.

But the world is not only that. The world is also about washing machines, dishwashers, juice extractors, water pumps, tupplewares, bottles, hygienic paper, toothbrushes, tables, fancy decorative stuff... and other little things that exist around you (or was used to produce it) just because someone wanted to make a life, not out of altruism.

Innovators (in particular, individual ones that does not even have a company) needs some sort of protection if their product becomes a hit instead to let them fend for themselves if someone larger than himself do a exact copy and market his product.

Reply Parent Score: 1

kurkosdr Member since:
2011-04-11

@CapEntĀ 

I wish I could upvote you, but you know, OSnews doesn't allow if you have posted.

Some people don't realise how much money is spent in research and development nowadays. They think MIMO and beamforming would have happened anyway by people experimenting in their basements or by universities, just like in the '70s and early '80s. Yeah, under such regime, said inventions would have happened 20 years from now or so, which is how long patents last anyway. Corps (and universities that patent their work) just do research and development much faster nowadays, deal with it.

Or they think that companies would bear the cost of making an invention (like the ones mentioned above) just to have their invention copied in matter of months.

There is a difference between opposing junk patents (hint: almost all soft-patents are such, because patents forbid patenting ideas, they only allow patenting inventions), and opposing patents in general.

Edited 2014-06-02 23:57 UTC

Reply Parent Score: 2

tylerdurden Member since:
2009-03-17


Innovators (in particular, individual ones that does not even have a company) needs some sort of protection if their product becomes a hit instead to let them fend for themselves if someone larger than himself do a exact copy and market his product.


The current system does nothing of the sort, so perhaps the one proposing an "unrealistic utopia" could very well be you.

Reply Parent Score: 4