the battle for 5g sovereignty - a qualitative patent
TRANSCRIPT
5G-Study – qualitative patent portfolio analysis (ARIAD IP-Rating) April 2020
The battle for 5G sovereignty - a qualitative patent portfolio analysis
Executive Summary
In the discussion about European sovereignty in the area of system-critical 5G infrastructure, the thesis of
China's 5G technology leadership and of European companies being left behind is often spread. The present
analyses were able to show that despite the high number of 5G patent applications filed by Chinese companies
(here: Huawei and ZTE), the quality of these, evaluated using the proven ARIAD Patent Rating Methodology,
lags significantly behind the other top global applicants. Furthermore, the possibility of a European "IT-
AIRBUS" with Nokia and Ericsson, as well as in an additional analysis with InterDigital, was considered as the
merging companies. Based on the 5G patent portfolios, it was possible to show that such a group could
compete qualitatively, as well as quantitatively, with the international 5G technology leaders (Qualcomm and
LG). According to the patent data-based analyses, Europe thus has the potential to build the future-oriented
5G infrastructure on its own while maintaining sovereignty and security.
Introduction
The fifth generation of mobile communications technologies (5G) represents an enormous step in the
development towards a completely connected world: the technology enables wireless data transmission at
speeds previously unavailable to the public. They form the basis for future concepts, which are often described
as "smart": Smart City, Smart Mobility, Smart Home, Smart Factory, Smart Everything. 5G technology offers
the possibility of taking digital communication between humans, humans and machines, but also between
machines, into a new age, and represents the backbone for autonomously operating vehicles, robots and
household appliances, i.e. the Internet of Things. 5G has therefore also dominated the political discussion
regarding digital infrastructure. This is even more the case for European countries, which are currently (as of
April 29, 2020), with the approval of Huawei technologies, taking a different path compared to the USA. Often
discussed in this context is the danger posed by the dependence on Chinese technology for the essential digital
infrastructure around 5G1.
The present short study will evaluate the 5G field based on published international patent data: international
technology leaders (according to 5G patent activity) will be identified and analyzed. The focus is purely on data
from published patent applications (and not on the "Standard Essential Patents" used in other studies).
Besides the usual comparison of the number of 5G patents, the quality of the 5G patent portfolios of the key
players will be considered. The quality is assessed using ARIAD Asset Management GmbH’s (ARIAD) IP Rating
method, which has already been applied in various scientific studies and serves as the basis for the first
investment strategy worldwide (ARIAD Patent Equity Strategy) that is systematically and purely based on
patent data. This strategy has been successfully implemented in various investment funds for over five years2.
1 https://www.golem.de/news/mobilfunk-telekom-warnt-intern-vor-5g-ausschluss-von-huawei-1901-139048.html;
https://www.merics.org/de/papers-on-china/chinas-digital-rise; 2 Monega Innovation R, I (WKN: 532102)
5G-Study – qualitative patent portfolio analysis (ARIAD IP-Rating) April 2020
This study intends to provide clues as to whether Europe is technologically dependent on American or Asian
companies in the key technologies surrounding 5G, or whether it is already well positioned with companies
such as Nokia and Ericsson.
Could a possible merger of these two European companies, as a kind of "IT Airbus", secure European
sovereignty and digital security in 5G key technologies3?
1. Identification of 5G related patents
The first step in the quantitative analysis is to determine what are 5G-related patents4. Not every patent
whose underlying technology can be used in the 5G field has the term "5G" or a variation of it in its description.
In addition, there is currently no standardized technology class according to IPC or CPC classifications, in which
5G-related patents are technologically grouped.
In order to define 5G-related technology classes, a semantic query was used to find all international patents
(published from 20085 onwards) whose titles or abstracts contain the terms "5G", "5 G", "5-G" or "fifth
generation" in connection with "network", "communication", "internet" or "mobile".
Figure 1 illustrates the filing dynamics of the identified patents that meet these conditions. As expected, the
number of published patents6 has grown exponentially in recent years.
Figure 1: Patent applications with 5G semantics in the title/abstract by year of publication
The distribution of patent applications in different technology classes (IPC subgroups) can be seen in Figure
2, whereby the 30 largest subgroups according to their share of total technology classifications are shown7. It
is important to notice that the patent office can assign several technology classes to a single invention,
depending on its functionality and versatility.
3 https://www.zeit.de/politik/deutschland/2019-11/huawei-5g-mobilfunknetz-netzausbau 4 Hereinafter, the term "patents" includes both granted patents and patent applications that have not (yet) been granted. 5 This point in time was chosen due to the fact that some inventions necessary for 5G were already developed for 4G/LTE, and were therefore patented early on. 6 Patents counted by year of publication, 2008 to 2019. 7 Technology classes that are not included in the IPC section "H - ELECTRICITY" were excluded from consideration.
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5G-Study – qualitative patent portfolio analysis (ARIAD IP-Rating) April 2020
Figure 2: Classification of 5G patents in IPC subgroups, according to percentage in the total number of classifications
The subdivision into IPC subgroups is very granular (over 50% of the classifications have a very small share and
fall under "Others"). This IPC level is therefore not a suitable basis for the selection of 5G-related technology
classes for further investigation. Nevertheless, it provides a first impression of important technology areas.
The five most significant IPC subgroups in terms of their share in the total technology classifications are shown
in Table 1 with their respective descriptions, illustrating their fields of application.
IPC subgroup Share Description (IPC subclass) Description (IPC main group) Description (IPC subgroup)
1 H04W 72/04 5,6% WIRELESS COMMUNICATION NETWORKS Local resource management, e.g. selection or allocation of wireless resources or wireless traffic scheduling
Wireless resource allocation
2 H04L 5/00 4,6% TRANSMISSION OF DIGITAL INFORMATION, e.g. TELEGRAPHIC COMMUNICATION
Arrangements affording multiple use of the transmission path
Arrangements affording multiple use of the transmission path
3 H04B 7/06 2,7% TRANSMISSION Radio transmission systems, i.e. using radiation field (H04B0010000000, H04B0015000000 take precedence)
at the transmitting station
4 H04W 72/12 2,4% WIRELESS COMMUNICATION NETWORKS Local resource management, e.g. selection or allocation of wireless resources or wireless traffic scheduling
Wireless traffic scheduling
5 H04W 74/08 2,0% WIRELESS COMMUNICATION NETWORKS Wireless channel access, e.g. scheduled or random access
Non-scheduled access, e.g. random access, ALOHA or CSMA
Table 1: The five most significant IPC subgroups of the 5G patents
The data can be aggregated at a higher level in order to determine the most important IPC main groups to
which the 5G patents semantically identified above are assigned (see Figure 3). The top 10 main groups (see
Table 2) account for more than 50% of all classifications and should therefore be suitable as a criteria for the
identification of 5G-related patents, since patents that have been classified in these IPC main groups are likely
to cover most of the other technology classes shown.
H04W 72/04 H04L 5/00H04B 7/06 H04W 72/12H04W 74/08 H04L 1/00H04L 27/26 H04W 28/02H04W 36/00 H04L 29/08H04W 24/10 H04W 88/08H04L 29/06 H04L 1/18H04W 56/00 H04W 74/00H01Q 1/50 H04B 7/04H04W 88/06 H01Q 1/38H04J 11/00 H01Q 1/24H01Q 1/36 H04W 16/28H04W 52/02 H04W 24/02H04W 76/27 H04W 28/06H04W 12/06 H04W 88/02SonstigeOthers
5G-Study – qualitative patent portfolio analysis (ARIAD IP-Rating) April 2020
Figure 3: Classification of 5G patents in IPC main groups, according to percentage in the total number of classifications
IPC main
group Share Description (IPC subclass) Description (IPC main group)
1 H04W 72 9,9% WIRELESS COMMUNICATION NETWORKS Local resource management, e.g. selection or allocation of wireless resources or wireless traffic scheduling
2 H04B 7 7,6% TRANSMISSION Radio transmission systems, i.e. using radiation field
3 H01Q 1 5,5% ANTENNAS, i.e. RADIO AERIALS Details of, or arrangements associated with, antennas
4 H04L 5 5,1% TRANSMISSION OF DIGITAL INFORMATION, e.g. TELEGRAPHIC COMMUNICATION
Arrangements affording multiple use of the transmission path
5 H04W 36 4,0% WIRELESS COMMUNICATION NETWORKS Handoff or reselecting arrangements
6 H04W 76 4,0% WIRELESS COMMUNICATION NETWORKS Connection management
7 H04W 28 3,8% WIRELESS COMMUNICATION NETWORKS Network traffic or resource management
8 H04L 1 3,8% TRANSMISSION OF DIGITAL INFORMATION, e.g. TELEGRAPHIC COMMUNICATION (arrangements common to telegraphic and telephonic communication H04M)
Arrangements for detecting or preventing errors in the information received
9 H04W 88 3,6% WIRELESS COMMUNICATION NETWORKS Devices specially adapted for wireless communication networks, e.g. terminals, base stations or access point devices
10 H04W 74 3,2% WIRELESS COMMUNICATION NETWORKS Wireless channel access, e.g. scheduled or random access
Table 2: The ten most significant IPC main groups of the 5G patents
In order to verify whether the above IPC main groups are suitable for the identification of 5G-related patents
and technologies, a second semantic analysis was performed, also taking 5G-related technologies into
account. The results in Table 3 show significant overlaps. The four “new” technology classes in the table were
previously also in the Top20 of the IPC main groups, but now displaying significantly higher weights (↑↑). The
four “displaced” technology classes are also still in the “new” Top20.
IPC main group
In relation to table 2
Share Description (IPC subclass) Description (IPC main group)
1 H04B 7 ↑ 14,9% TRANSMISSION Radio transmission systems, i.e. using radiation field
2 H04L 27 ↑↑ 7,9% TRANSMISSION OF DIGITAL INFORMATION, e.g. TELEGRAPHIC COMMUNICATION
Modulated-carrier systems
3 H04W 72 ↓ 6,8% WIRELESS COMMUNICATION NETWORKS Local resource management, e.g. selection or allocation of wireless resources or wireless traffic scheduling
4 H04L 5 -- 5,1% TRANSMISSION OF DIGITAL INFORMATION, e.g. TELEGRAPHIC COMMUNICATION
Arrangements affording multiple use of the transmission path
5 H04L 1 ↑ 4,7% TRANSMISSION OF DIGITAL INFORMATION, e.g. TELEGRAPHIC COMMUNICATION
Arrangements for detecting or preventing errors in the information received
6 H04W 36 ↓ 4,2% WIRELESS COMMUNICATION NETWORKS Handoff or reselecting arrangements
7 H04W 88 ↑ 3,1% WIRELESS COMMUNICATION NETWORKS Devices specially adapted for wireless communication networks, e.g. terminals, base stations or access point devices
8 H04W 16 ↑↑ 2,9% WIRELESS COMMUNICATION NETWORKS Network planning, e.g. coverage or traffic planning tools; Network deployment, e.g. resource partitioning or cell structures
9 H04L 25 ↑↑ 2,6% TRANSMISSION OF DIGITAL INFORMATION, e.g. TELEGRAPHIC COMMUNICATION
Baseband systems
10 H04W 24 ↑↑ 2,6% WIRELESS COMMUNICATION NETWORKS Supervisory, monitoring or testing arrangements
H04W 72 H04B 7H01Q 1 H04L 5H04W 36 H04W 76H04W 28 H04L 1H04W 88 H04W 74H04W 24 H04L 12H04W 4 H04L 29H04W 48 H04L 27H04W 52 H04W 12H04W 8 H04W 16H04B 17 H01Q 21H04B 1 H01Q 5H04W 56 H04L 25H03M 13 H04W 84
Others
5G-Study – qualitative patent portfolio analysis (ARIAD IP-Rating) April 2020
Table 3: The ten most significant IPC main groups of patents in 5G-related technologies - comparison with Top 10 from Table 2:
↑↑new in the Top 10, ↑ higher rank within the Top 10, -- same rank within the Top 10
For the definition of 5G-related IPC classes, both approaches described above were combined and averaged.
The selected 5G-related technology classes8, which will serve as a basis for further investigations in this study,
are:
('H04B 7','H04W 72','H04L 27','H04L 5','H04L 1','H04W 36','H01Q 1','H04W 88','H04W 76','H04W 28')
From here on, all international patents published since 2008 that fulfill the semantics described above and
belong to the determined 5G technology classes will be referred to as "5G patents".
2. Identification of key 5G companies
The most important international competitors in the 5G race can be identified by their number of 5G patent
applications. The companies shown in Figure 4 are consistent with investigations based on 5G-SEP data,
although the order differs slightly. It should be noted that patents that are not available in English, for
example, purely Chinese patents, are not included in this analysis. This reduces the number of considered
patent applications, especially from Chinese suppliers. However, this should not negatively influence the
conclusions of the present study. On the contrary, the focus on internationalized patents ensures the quality
of these patents9.
Figure 4: The most important international companies filing 5G patents
The key 5G players selected for further analysis (red bars) are shown in Table 4 with their respective country
of origin, size and name by which they will be referred to in this study. Four key centers of 5G technologies
can be identified: USA, Europe, Korea and China.
8 Hereinafter referred to as "5G technology classes” 9 Purely local Chinese patents often show lower quality than those from high income countries. This may be explained by the fact that Chinese companies and private individuals are incentivized/rewarded by the government for national patent applications.
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5G-Study – qualitative patent portfolio analysis (ARIAD IP-Rating) April 2020
Company Country of origin Market capitalization10 From here on as (note)
1 Qualcomm Inc USA 92 Billion $ Qualcomm
2 Intel Corp USA 263 Billion $ Intel
3 LM Ericsson Europa 28 Billion $ Ericsson
4 Nokia Corp Europa 20 Billion $ Nokia (includes Alcatel-Lucent)
5 Samsung Electronics Korea 270 Billion $ Samsung
6 LG Electronics Korea 8 Billion $ LG
7 Huawei Technologies Co Ltd China not publicly listed Huawei
8 ZTE Corp China 33 Billion $ ZTE
Table 4: Countries of origin and names of the most important international companies filing 5G patents
A compelling dependence of Europe on foreign 5G suppliers cannot be confirmed in view of the relatively
high number of 5G patents held by the Swedish Ericsson and Finnish Nokia, even though the remaining
companies shown are of Chinese, Japanese, American or Korean origin. In terms of size (market capitalization),
Samsung and Intel are by far the heavyweights, followed distantly by Qualcomm. It is therefore surprising that
the remaining top applicants have nevertheless so many 5G patent applications. This speaks for a strong focus
on 5G research activities from the smaller players.
The further analyses will mainly focus on the quality of these companies' 5G patent portfolios, in order to
investigate 5G technology leadership from this aspect.
3. Qualitative analysis of 5G patent portfolios
4.1 Quality of patents and patent portfolios The quality of patents is significantly more important than the mere number of patents, when investigating
a company’s technological leadership over its competitors. This is all the more true when a significant change
takes place in an industry, and the inventions represent or enable not only innovations, but even disruptions.
The number of patents helps a company to isolate itself in a technological field, even though these patents
and the underlying inventions may have no real economic value or trigger a technological change in an
industry. For example, a small, technologically specialized company with 100 groundbreaking patents (often
referred to as a "hidden champion") and truly innovative products can have a greater impact on an entire
industry than multifaceted industry giants with thousands of patents.
There are two different approaches to determine the quality of patents: the monetary approach tries to
determine a monetary value for patents and patent portfolios using internal data (licensing income, market
transaction data of comparable patents, etc.). This often fails due to non-existent or non-representative data
and lack of comparability between different technologies. The alternative approach uses quantitative means
to determine the relative quality of patents/patent portfolios in relation to other patents/patent portfolios
with the help of various patent quality indicators. Patent data have an internationally standardized structure,
which allows important information, such as the number of citations it receives from other patents, to be used
quantitatively.
Since 2005, ARIAD has created and continually updated a database of worldwide patent data (Big Data). Using
quantitative processes, ARIAD has developed numerous scientifically verified quality indicators to
systematically analyze and evaluate patent portfolios. When examining a company's patent portfolio, it is
10 As of 29/04/2020
5G-Study – qualitative patent portfolio analysis (ARIAD IP-Rating) April 2020
very important to take the corporate structure into account, including the patents of its subsidiaries. In
addition, the patents from all database entries have to be found and allocated to the respective parent
companies, as the name of a patent holder is often written in different forms or even misspelled in the official
database from the patent offices (see Table 5 for an example on Ericsson). The finding and rectification of
names is a particularly time-consuming process.
Entries for patent owners in the official patent database
1 TELEON AB LM ERICSSON
2 TELEPHONE AB LM ERICSSON
3 TELEPONAKTIEBOLAGET L M ERICSSON PUBL
4 TELFOANKTIEBOLAGET L M ERICSSON PUBL
5 TELFON AB LM ERICSSON
6 TELFONAKTIEBOAGET LM ERICSSON
7 TELFONAKTIEBOAGET LM ERICSSON PUBL
8 TELFONAKTIEBOLAGET LM ERICSSON
9 TELFONAKTIEBOLAGET LM ERICSSON PUBL
10 TELFONAKTIEBOLAGET LM ERICSSON (PUBL)
11 TELLEFONAKTIEBOLAGET L M ERICSSON (PUBL)
Table 5: Section of the official patent database, which contains about 300 different spellings for the company TELEFONAKTIEBOLAGET
L M ERICSSON as patent holder
4.2 Application dynamics and statistics of 5G patent portfolios An investigation of the patenting activities of the companies examined (Figure 5) shows that two companies
don’t follow the general pattern in terms of application dynamics: all companies except Nokia and ZTE show a
significant increase in activities in recent years. Nokia differs in particular with a relatively steady activity level.
Both these companies also present comparably lower grant ratios in relation to their competitors in the
observed period11. Reasons for lower grant ratios could be a particularly competitive research environment (a
positive aspect, as it suggests it is a particularly interesting technology field), a company’s patenting strategy
(a rather negative aspect: "file & drop" strategies to deter competitors, without the individual patents
themselves having any significant economic value), or a lack of innovativeness of the inventions. These reasons
will not be examined in detail in this study.
11 In general, several years elapse from a patent’s application to its publication and eventual grant. Grant ratios are therefore not fixed and may still change over time. This is especially the case for patents published in recent years.
5G-Study – qualitative patent portfolio analysis (ARIAD IP-Rating) April 2020
Figure 5: Granted and not (yet) granted 5G patents by year of publication
While the number of published patent applications shown in Figure 5 takes into account all applications for
an invention in different countries/regions, Figure 6 shows the correspondent number of published patent
families, i.e. the actual individual technological inventions. In this case, similar conclusions can be reached
when comparing the companies according to their published patent families or the total number of patent
applications.
Figure 6: 5G patent families by year of publication
Table 7 displays the average age of active 5G patents of the individual patent portfolios. The average age of a
patent portfolio matters, since granted patents usually allow a monopoly position for inventions for a
maximum of 20 years after filing. It also reflects the different company’s filing dynamics. Companies with
younger patent portfolios are at an advantage here, although only a few years difference are of no great
significance. This is the case, since the earlier a patent is filed in a relatively young technological field such as
5G, the more likely it is to be particularly relevant.
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5G-Study – qualitative patent portfolio analysis (ARIAD IP-Rating) April 2020
Company Average age of active 5G patents
SAMSUNG 4 Years 11 Months
QUALCOMM 7 Years 9 Months
ERICSSON 6 Years 10 Months
HUAWEI 5 Years 1 Monat
LG 6 Years 4 Months
INTEL 5 Years 7 Months
NOKIA 8 Years 9 Months
ZTE 7 Years 1 Month
Table 1: Average age of active 5G patents
When comparing each company’s distribution of technological classifications (IPC main groups) for their 5G
patents (Figure 7), slightly different emphasis in their technological orientations can be seen: e.g. Nokia and
Ericsson have significantly higher shares in IPC: H04W 3612 than their competitors, but in exchange relatively
lower in IPC: H04L 2713.
Overall, it should nevertheless be noted that the companies have a fairly similar technological orientation in
their 5G patent portfolios. This is a prerequisite for a meaningful qualitative comparison, making the selected
patent portfolios thus suitable for the following analyses.
Figure 7: Technological DNA comparison with the 30 most important IPC main groups from each company’s 5G patents
(the overarching Top10 in bold)
12 "Wireless Communication Networks - Arrangements for Handover [Handover/Handoff]". Handover describes the process when a network subscriber transfers from one base station (cell) to another by moving outside of the first’s coverage area. 13 "Transmission of digital information - systems with modulated carriers". During modulation, a useful signal to be transmitted (e.g. data) changes a so-called carrier, which enables a high-frequency transmission of the low-frequency useful signal.
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H04L 25 H04W 4 H04L 12 H04J 11 H04W 48 H04W 16 H04W 52 H04W 74 H04W 84 H04B 1
H04L 29 H04W 8 H04W 92 H04B 17 H04W 56 H04W 12 H01Q 1 H04J 99 H04W 80 H04J 3
5G-Study – qualitative patent portfolio analysis (ARIAD IP-Rating) April 2020
4.3 Qualitative analysis of key 5G companies In order to evaluate the quality profile of each company’s 5G patent portfolio, this study will rely on the
following five scientifically based patent quality indicators:
Patent Quality Indicator Description
Technological Scope (TS) The more technological applications an invention has, the higher its economic value
International Scope (IS)
Measures in how many countries/regions an invention is registered and thus the number of possible monopolies. Since every application involves costs, only promising inventions are registered internationally
Current Impact Index (CII) Measures the relevance of inventions by the interest from third parties
Legal Attacks (LA)
Due to the high costs involved, legal disputes over patents indicate an interesting technology from an economic point of view
Self-Citations (SC)
Indicates the extent to which a company focuses on a particular technology and potentially tries to isolate itself from competitors
Table 7: Description of selected patent quality indicators – each assesses the average quality of all active patents in a portfolio in its
respective category
Figure 8 presents the results of the calculations with the different quality indicators14 for each 5G patent
portfolio, whereby individual values are normalized with the highest value in each category. Qualcomm stands
out with above-average results in all quality areas, clearly leading especially in IS and slightly ahead of Nokia
in CII. The Korean LG is also very well positioned in terms of quality, except in LA. The LA category is led by
Nokia, which implies that the Finnish company has essential technologies for 5G networks.
14 The normalized indicators range from 0 (lowest value) to 1 (highest value).
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5G-Study – qualitative patent portfolio analysis (ARIAD IP-Rating) April 2020
Figure 8: Quality scores of 5G patent portfolios according to each patent quality indicator (as of April 29, 2020)
Figure 9: Average patent portfolio quality of 5G patent portfolios (as of April 29, 2020)
The different quality indicators can be (equally weighted) aggregated into a single index to allow for a direct
comparison of the average quality of the individual 5G patent portfolios. Figure 9 displays the resulting patent
portfolio quality index (PQI) for all competitors. Contrary to the often-heard belief that Huawei, as a 5G
technology leader, would outpace particularly European companies, the quality analysis shows that Europe,
especially with Nokia, has 5G companies that are technologically very well positioned15. The two American
companies, Qualcomm and Intel, also performed very well in the comparison - Qualcomm is the 5G technology
leader in the peer group with the highest rated patent portfolio, slightly ahead of Korean LG. It is remarkable
that the two Chinese companies lag behind the other competitors in the PQI comparison, despite their high
5G patenting activity. The dynamics of PQI since 2008 (Figure 10) reveal that Qualcomm has consistently been
the leader in 5G patents, even though the gap to the peer group has narrowed significantly since 2017. While
Nokia is almost continuously in third place, the quality of Ericsson's 5G patent portfolio is permanently ranked
last among the non-Chinese companies. Huawei and ZTE are far behind in this qualitative comparison, even
though they have been able to gradually reduce the gap to the remaining competitors. The analysis thus shows
that Europe has in Nokia a clear, albeit rather small, technology leader in the 5G sector from a qualitative point
of view.
15 This analysis doesn’t take cost factors into consideration.
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5G-Study – qualitative patent portfolio analysis (ARIAD IP-Rating) April 2020
Figure 10: Dynamics of PQI of 5G patent portfolios since 2008
4. “ITBUS” Nokia + Ericsson (+ InterDigital?)
5.1 “ITBUS” Nokia + Ericsson With the expansion of 5G networks, many economies in the West realized that the mobile communications
technology of the Chinese company Huawei was built into many components of major Western network
equipment suppliers. While instigating a trade war with China, the U.S. President Donald Trump warned that
5G technology was a gateway for China to conduct large-scale espionage. In addition to banning this
technology in the USA, he also increased the pressure on other industrial nations in Europe to do the same.
The United Kingdom has since banned Huawei from its own 5G mobile network in the medium term, while
other countries are still in the decision-making process. It is clear that European security and independence
in digital infrastructure is gaining importance in (economical) political debates – discussions are already taking
place on various options to provide a European answer to foreign 5G competitors and their feared
technological dominance. The fact that Mr. Trump suggested the USA should acquire a stake in Nokia and
Ericsson is proof that Europe certainly already has the sought-after technological know-how. In this context,
the idea arises, analogous to the conception of AIRBUS, to create a major European IT group with state
support and participation. The two Scandinavian publicly listed companies Nokia and Ericsson are in this case
prominent merger candidates16. Figure 11 shows the effects of a merger of Nokia and Ericsson
(Nokia+Ericsson) on the PQI comparison with international competitors. Nokia+Ericsson would not only have
the highest number of granted 5G patents and 5G patent applications, but the quality of its patent portfolio
16 https://www.handelsblatt.com/politik/deutschland/huawei-debatte-gruener-digitalminister-albrecht-schlaegt-airbus-projekt-fuer-den-5g-ausbau-vor/25538726.html?ticket=ST-2180852-zdfFnCCBlnLl1wZz0cz2-ap3 ; https://background.tagesspiegel.de/nokia-und-ericsson-als-it-airbus; https://de.reuters.com/article/deutschland-5g-gr-ne-idDEKBN20B0XZ
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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Samsung
Qualcomm
Ericsson
Huawei
LG
Intel
Nokia
ZTE
5G-Study – qualitative patent portfolio analysis (ARIAD IP-Rating) April 2020
would be almost equal to that of Intel. Nevertheless, the gap between its PQI and those of Qualcomm and LG
would still be large.
Figure 11: Average quality of 5G patent portfolios after a possible merger of Nokia + Ericsson (as of April 29, 2020)
5.2 “ITBUS” with international support: Interdigital In order to further expand its technological position in the 5G sector, Nokia+Ericsson could additionally acquire
smaller companies that are also technologically well positioned in the field. From a political point of view,
European takeover candidates might be preferable. Table 8 shows a small selection of such European
companies that are currently researching 5G related technologies.
Company Country of origin
TELIA COMPANY AB Sweden
SAGEMCOM ENERGY & TELECOM France
PEIKER ACUSTIC GMBH & CO KG Germany
HMD GLOBAL OY Finland
FRACTUS SA France
UBLOX AG Germany
ANDREW WIRELESS SYSTEMS GMBH Germany
ACCELANT COMM GMBH Germany
BEAMMWAVE AB Sweden
Table 8: Selection of smaller European companies in 5G technologies
A meaningful evaluation of these selected companies can only be achieved through separate in-depth
analyses. An interesting non-European alternative is the much smaller American technology company
Interdigital Inc (Interdigital), with a market capitalization of $1.8 billion$17. The company can be considered
as one of the international leaders (number of 5G patents rank 11 in Figure 4). Its technological DNA in the 5G
sector is also comparable to that of Nokia and Ericsson (Figure 12, right). Its declining patenting activity could
17 As of 29.04.2020
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Qualcomm LG Intel Nokia+Ericsson Samsung ZTE Huawei
5G-Study – qualitative patent portfolio analysis (ARIAD IP-Rating) April 2020
be explained by the fact that Interdigital started researching the 5G area very early on and is already working
on the development of the next generation (6G). The very high PQI value (Figure 13) ultimately identifies
Interdigital as the clear 5G technology leader among the analyzed competitors18.
Figure 12: Application dynamics of Interdigital Inc (left) and the technological DNA of its 5G patents compared to Nokia and Ericsson
(right)
Figure 13: Average quality of 5G patent portfolios including Interdigital and a possible merger of Nokia+Ericsson (as of April 29, 2020)
It is therefore not surprising that Interdigital has won various patent disputes in the 5G sector, which is
reflected in the LA quality indicator. This also indicates that Interdigital holds essential 5G patents19. By
acquiring all patents from the French technology company Technicolor SA, Interdigital was even able to
expand its 5G patent portfolio to include 5G-related applications in digital video and image processing20.
18 LG's PQI is here better than Qualcomm's because of the addition of Interdigital to the analysis, which has changed the basis for calculating the relative indicators. 19 https://www.reuters.com/article/us-interdigital-huawei-tech-settlement/huawei-interdigital-enter-licensing-pact-end-patent-
litigation-interdigital-surges-idUSKCN22A31B; 20 https://www.technicolor.com/news/technicolor-agrees-sell-interdigital-its-patent-licensing-business
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Erteilungsrate (Verhältnis erteilter zu nicht erteilten Patente)
(noch) nicht erteilte Patentanmeldungen
erteilte Patente
0%
50%
100%
Ericsson Nokia Interdigital
H04B 7 H04L 27 H04W 72 H04L 5 H04L 1H04W 36 H04W 88 H04W 28 H04W 76 H04W 24H04L 25 H04W 4 H04L 12 H04J 11 H04W 48
00,10,20,30,40,50,60,70,80,9
1
Grant ratio (ratio granted patents / total applications)
Not (yet) granted patent applications
Granted patents
5G-Study – qualitative patent portfolio analysis (ARIAD IP-Rating) April 2020
The conclusion is that the American company would thus likely be a lucrative takeover candidate for
Nokia+Ericsson. Figure 14 illustrates the effect of this takeover on the quality of its 5G patent portfolio: while
Nokia+Ericsson was previously ranked fourth, lagging behind the peer group's 5G technology leaders, LG and
Qualcomm, by a great margin, both its position in the ranking and the distance to the leaders could be
significantly improved by integrating Interdigital's high-quality 5G patent portfolio.
Figure 14: Effect on PQI of a possible merger Nokia + Ericsson + Interdigital (as of April 29, 2020)
A combination of Nokia, Ericsson and Interdigital has the capability to create a European 5G ITBUS that could
stand up to global competition in both the number and quality of its patents, and therefore secure the
sovereignty of digital infrastructure in Europe. Even though this IT conglomerate will probably not be able to
catch up to Huawei's cost advantage, this should be of secondary importance for European politics, given the
considerable security risks.
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