The Battle for 5G Sovereignty - a Qualitative Patent Portfolio Analysis Executive Summary
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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. 9000 8000 7000 6000 5000 4000 3000 patents with 5G semantics 5G with patents veröffentliche Patente veröffentliche 2000 1000 Published 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 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. 5G-Study – qualitative patent portfolio analysis (ARIAD IP-Rating) April 2020 H04W 72/04 H04L 5/00 H04B 7/06 H04W 72/12 H04W 74/08 H04L 1/00 H04L 27/26 H04W 28/02 H04W 36/00 H04L 29/08 H04W 24/10 H04W 88/08 H04L 29/06 H04L 1/18 H04W 56/00 H04W 74/00 H01Q 1/50 H04B 7/04 H04W 88/06 H01Q 1/38 H04J 11/00 H01Q 1/24 H01Q 1/36 H04W 16/28 H04W 52/02 H04W 24/02 H04W 76/27 H04W 28/06 H04W 12/06 H04W 88/02 Sonstige Others 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. Wireless resource allocation selection or allocation of wireless resources or wireless traffic scheduling 2 H04L 5/00 4,6% TRANSMISSION OF DIGITAL INFORMATION, e.g. Arrangements affording multiple Arrangements affording multiple TELEGRAPHIC COMMUNICATION use of the transmission path use of the transmission path 3 H04B 7/06 2,7% TRANSMISSION Radio transmission systems, i.e. at the transmitting station using radiation field (H04B0010000000, H04B0015000000 take precedence) 4 H04W 72/12 2,4% WIRELESS COMMUNICATION NETWORKS Local resource management, e.g. Wireless traffic scheduling selection or allocation of wireless resources or wireless traffic scheduling 5 H04W 74/08 2,0% WIRELESS COMMUNICATION NETWORKS Wireless channel access, e.g. Non-scheduled access, e.g. scheduled or random access 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. 5G-Study – qualitative patent portfolio analysis (ARIAD IP-Rating) April 2020 H04W 72 H04B 7 Others H01Q 1 H04L 5 H04W 36 H04W 76 H04W 28 H04L 1 H04W 88 H04W 74 H04W 24 H04L 12 H04W 4 H04L 29 H04W 48 H04L 27 H04W 52 H04W 12 H04W 8 H04W 16 H04B 17 H01Q 21 H04B 1 H01Q 5 H04W 56 H04L 25 H03M 13 H04W 84 Figure 3: Classification of 5G patents in IPC main groups, according to percentage in the total number of classifications IPC main Share Description (IPC subclass) Description (IPC main group) 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 Arrangements affording multiple use of the transmission path COMMUNICATION 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 Arrangements for detecting or preventing errors in the COMMUNICATION (arrangements common to telegraphic information received and telephonic communication H04M) 9 H04W 88 3,6% WIRELESS COMMUNICATION NETWORKS Devices specially adapted for wireless communication networks, e.g.