News

Patent Royalties Getting Out of Hand: Could Exceed $120 Per Smartphone

patent1patent1

Anyone who follows smartphones will know that the rise of patent wars, patent trolls and massive battles over intellectual property has already started to get out of hand – you only have to look to the endless lawsuits between Apple and Samsung to see that. However, to paraphrase the latest report in some London slang “you ain’t seen nothing yet”. The latest report, which is a working paper by an Intel in-house counsel and two Wilmer Hale lawyers, suggests that the licensing cost of patents and intellectual property per smartphone is rising rapidly. The term “Royalty Stacking” is used to describe the way in which the cumulative cost of patent licenses is growing so high per device that it is increasingly unprofitable to produce smartphones. The estimates suggest we could observe up to $120 patent licensing costs on a $400 smartphone, which equals the costs of the components! The conclusion is that “those costs may be undermining industry profitability–and, in turn, diminishing incentives to invest and compete”. Of course this is a hypothetical study based on industry document analysis, so this is not what is actually happening right now. However, the potential is there: if all potential royalty demands end up being converted into royalty payments then the price of smartphones could continue to soar and as a result the industry could be brought to its knees by a generation of “patent trolling” and patent wars. Check out a detailed analysis of the working paper below at Foss Patents or check out the actual working paper at the source link.

Source: Wilmer Hale (Working Paper), Via Foss Patents

Image courtesy of Ideas2Market Blog

Ryan Martin

Disqus Comments Loading...

Recent Posts

NVIDIA GT 730 Graphics Card Returns with Affordable 2GB and 4GB Models Starting at $45

NVIDIA's classic GT 730 graphics card is making a surprising comeback, this time with updated…

9 hours ago

Warhammer 40,000: Rogue Trader Reaches One Million Copies Sold

The development team at Owlcat Games has announced that Warhammer 40,000: Rogue Trader has surpassed…

9 hours ago

Fans Speculate January 30 Release for GTA 6’s Second Trailer Based on Rockstar Clues

Fans of Rockstar Games’ Grand Theft Auto (GTA) series are buzzing with excitement and a…

10 hours ago

NVIDIA Unveils Official List of Games Supporting DLSS 4 at Launch

NVIDIA has announced the official list of games that will support the cutting-edge DLSS 4…

10 hours ago

GAMDIAS Intros Atlas P2 CG Mid-Tower PC Case

GAMDIAS has just kicked off 2025 with a bang, unveiling their new Atlas P2 CG…

15 hours ago

EA Shutting Down Origin on April 17, Recommends Upgrade to EA App

Electronic Arts (EA) has announced the impending shutdown of its long-standing game distribution platform, Origin,…

16 hours ago