Intellectual property (IP) litigation trends emerge alongside any modern technological marvel. According to Statista, 5G adoption in the cell phone industry is on track to reach 600 million subscriptions in 2021, nearly three times the 212 million in 2020. This rapid development and deployment process has phone manufactures, computer companies, and Internet of Things (IoT) providers racing to ensure compatibility, register patents and sell their products, meaning patent challenges are likely.
One of the primary benefits of 5G is improved connectivity. Industries like automotive, agriculture, and construction will gain access to transformational amounts of user data, which may be used both by the end user, the distributor, the manufacturer, or other groups such as a government entity controlling traffic. As more devices and tools become connected, smart cars, crop communication, machinery, etc. will be further developed by innovators to maximize incoming data.
The IP associated with these connected devices will result in massive revenue potential across many industries, which is why it is looking to be a fertile ground for litigation. The owners of patents that allow for the development of 5G-compatible products are already having issues with the innovative businesses hoping to utilize them. What we are witnessing is a race to acquire 5G patents, as telecommunication giants such as Huawei, Nokia, and Samsung are already hard at work securing their IP.
This competition among corporations has some experts concerned about monopolization and fair competition. In Financial Times, Carsten Fink, the Chief Economist of the World Intellectual Property Organization in Geneva, states, “There is always concern that there is too much market power if companies sit on really large patent portfolios.”
On the other hand, the development of these patents allows for innovation to continue. If a company spends billions of dollars developing solutions, it is understandable that it wants to be properly compensated for the work. Financial Times notes that companies, like Nokia, are constantly keeping an eye on who is using its patented technology to ensure it receives a return on its investment.
Qualcomm and Apple recently settled lawsuits related to 5G technologies that were used in violation of the RF calibration patent. This settlement brought a two-year legal battle to a close, as the two companies fought over Qualcomm’s patent licensing practices. This case demonstrated just how much is on the line for companies like Qualcomm who aim to protect their patent licensing accounts.
The settlement allows both parties to move forward and maintain their licensing agreement, thus causing a missed opportunity to transform the future of pricing practices around 5G modems. If Apple had walked away the victor and obtained lower prices, competition would have had an easier time taking on companies like Qualcomm in the years to come. If Qualcomm had won, it would have been able to increase its prices and strengthen its dominance in the industry.
We’re only just beginning to see how 5G impacts businesses around the world, and the subsequent influx of litigation surrounding this new technology. We believe that 5G will result in plenty of work for legal teams around IP, cybersecurity, licensing, privacy, and beyond.
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