Via Licensing revises royalty rates in effort to appeal to SMEs and Asian wireless device makers

Patent pool operator Via Licensing has introduced extensive royalty rate changes for its Long-Term Evolution (LTE) and Advanced Audio Coding (AAC) offerings, as it continues to test out innovative strategies aimed at increasing licence uptake among a new generation of Asian smartphone and tablet makers.

The revised pricing structure for the LTE pool is intended to improve the prospects of licensing low volume manufacturers, as well as more recent entrants into the smartphone, handset and tablet computer market. In particular, the latter would seem to apply to rapidly growing firms from China, India and Southeast Asia, many of which have established a significant footprint in their home region but are yet to become major players in places like Europe and North America. “We modified our rates to be more welcoming to innovative small and medium-sized companies, a segment of the market that is very dynamic,” Joe Siino, president of Via Licensing, is quoted as saying in a press release. “While our updated rates may have the greatest impact for new market entrants and low volume manufacturers, all potential licensees will be eligible to take advantage of these rates in the relevant volume tiers.”

The modified LTE pool rates follow Via Licensing’s earlier revisions to pricing for its AAC pool earlier this year. These changes were more explicitly aimed at tapping Chinese and Indian industry, offering discounts of 30%-36% to prospective licensees based in developing markets. These reduced rates seem to have helped Via Licensing to sign up key China players Lenovo and Xiaomi in recent months.    

The first two tables below outlines the previous and revised royalty rates for Via’s LTE pool; and the third table gives ‘developed’ and ‘developing’ market rates for its AAC pool. While these represent just a couple of examples of how licensors of standard-essential patents can improve their chances of success in Asia and among lower-volume manufacturers, they may nonetheless provide a useful benchmark for all rights holders looking to monetise their assets in these segments.

Original LTE pool rates 

Volume (per unit/annual reset)

Per unit fee

For the first 500,000 units

$3

For units 500,001 to 2,500,000

$2.55

For units 2,500,001 to 5,000,000

$2.40

For units 5,000,001 to 10,000,000

$2.25

For units 10,000,001-plus 

$2.10

Modified LTE pool rates

Volume (per unit/annual reset)

Per unit fee

For first 100,000 units 

No fee

For units 100,001 to 1,000,000

$1

For units 1,000,001 to 2,500,000

$1.50

For units 2,500,001-plus

$2.10

AAC licence fees – alternative rate structure

Volume (per unit*/annual reset)

Per unit fee, devices sold in or sold for use in R1 regions

Per unit fee, devices sold in or sold for use in R2 regions

For the first 1 to 500,000 units

$0.98

$0.64

For units 500,001 to 1,000,000

$0.78

$0.51

For units 1,000,001 to 2,000,000

$0.68

$0.44

For units 2,000,001 to 5,000,000

$0.45

$0.29

For units 5,000,001 to 10,000,000

$0.42

$0.27

For units 10,000,001 to 20,000,000

$0.22

$0.14

For units 20,000,001 to 50,000,000

$0.20

$0.13

For units 50,000,001 to 75,000,000

$0.15

$0.10

For units 75,000,001 and more

$0.10

$0.07

*Consumer products with more than two channels count as 1.5 units.

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