The Law Suit around the Corner with IP

I have talked about the market and profit possibilities in my last post and this aspect of the whole standardization process is undoubtedly very important. The cost of a product is given by the size of silicon used or by the market gap it can fill out. Or at least that is how we usually look at the value for money of a product. It would be all hunky dory if it were so simple. Unfortunately, the danger with new technologies is that Intellectual Property rights can make the price of a product encompassing that particular technology to go way up. This is not even the major problem, because, if these rights are handled up front at the beginning, the cost can increase but will remain fixed. So no surprises! But what if chips start selling by the billions and greedy money makers claim rights in your product, in the technology you use? That’s known in this environment as the patent trolls and boy can they strip you down of a lot of pennies.

The reason this seldom occurs is ignorance. Ignorance is bliss but it can also be the beginning of the end and there were numerous cases (even the mighty Microsoft and Google have had the "pleasure" of spending a few valuable bucks on fighting off patent trolls). In the technical environment, there is a common misconception that if a producer buys the right to use a standard, then IP rights does not apply. It certainly depends on the standardization body and the conditioned negotiated beforehand.

With Bluetooth Low Energy it seems rather straightforward. But it might be because this is a company based standard. Bluetooth owns the intellectual property inside Bluetooth Low Energy and they can license it. However, with Bluetooth, where a lot of members contribute to the standard coming into force, the risk of relevant patents or IP being discovered later is very little. The members are asked to contribute in terms of proprietary knowledge owned so that everyone can use the standard. Therefore Bluetooth Low Energy is reasonable and non-discriminatory and it has the use of IP free from any form of license fee - RANDZ.

This is a two way pact.  Companies agree to give up the right to make profit through proprietary rights by taking each other to court, but in turn sign away some of the value of their IP. Why would companies choose to do so? They have to give a little to take a little. They are aware that long term profits can be achieved if they cooperate in the early stages to grow the market to the point where it pays off. Like it happened with Nordic Semiconductor. They started developing the standard with Nokia, then surrendered to Bluetooth but got the chance to be among the first to produce a BT LE chip and they have little risk of trolls appearing from thin air. If more companies give away their IP license, more IP goes into the standards pool, thus the final version of the technology is likely to be better protected against being sued. 

In many respects, Bluetooth LE comes with a good protection against IP issues. Its RANDZ basis as well as the strategic umbrella of Bluetooth as a corporation makes it a reliable standard. Nevertheless, no standard is law suit proof.