Joint Patent Licenses Catch on in Wireless

Five big holders of cellular patents, including Qualcomm, are joining an effort proposed by Ericsson AB to jointly license patents in an emerging field called the Internet of Things.

According to a report for the Wall Street Journal, the patent holders will become initial patent contributors to Avanci, a company recently established to serve as a one-stop source to license rights to a broad set of patents covering wireless technology. The participants plan to share revenue from licensing deals.

The other initial patent contributors besides Qualcomm and Sweden’s Ericsson are China’s ZTE Corp., Dutch telecom company Royal KPN NV and InterDigital Inc., a Delaware-based wireless technology company.

Philosophically, the move is a far cry from the recent smartphone patent wars, but it certainly makes sense for these companies to put down their sabers for the time being. Litigation is costly, and it doesn’t matter how deep your pockets are. Even when a giant like Apple loses a big decision, they are hurt in other areas of business. When time and resources are in court instead of innovating, product lines suffer. Qualcomm, Ericsson, and the like know this, and hope to prevent it.

Don’t expect the wars to completely come to a stop just yet. But with more companies wising up to the fact that joint licensing can actually help them put out stronger products in the end, many more may jump on the bandwagon.