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Who owns 4G mobile technology?

Patent pie-slice analysis gives LG a gutbuster portion

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Analyst Peter Misek has been crawling through piles of patents to guess who owns LTE, with the surprise result that most of it belongs to LG Electronics.

The details of who pays whom for the rights to create LTE handsets aren't public, but Peter Misek, of Jefferies & Co., has checked out 1,400 patents related to the next-generation mobile comms standard and advised investors (and Forbes) of his calculated ownership breakdown.

Chart showing patent ownership by number

Patents by number, not quality, but interesting none the less

It's important because LTE is the preferred 4G standard, and every LTE handset will have to pay royalties to those with the patents. Misek's figures are only educated guesswork, but he places LG Electronics with the biggest share of the spoils with 23 per cent of the pot.

It's no surprise that Qualcomm comes in second with 21 per cent. Qualcomm owns a much greater share of 3G, having developed the CDMA technology on which most 3G networks are based, but while it takes five per cent of the profit on every 3G handset sold it has admitted it only gets 3.2 per cent on an LTE handset.

Taking a slight statistical leap of faith we can calculate that manufacturers are handing over around 16 per cent of their gross profits to patent holders, which is perfectly plausible.

After the biggies we see Motorola, now the property of Google, and InterDigital, which is in the process of flogging off its patent portfolio and should attract some serious attention. ZTE's holding might surprise, but the Chinese company has been catching up with the whole patent thing lately.

Nortel's patents are owned by a cross-licensing consortium of manufacturers including Apple and Microsoft - names that don't appear anywhere else in the analysis, which only covers the core radio technologies (as opposed to interfacing or design, where both companies are amply represented).

The number of patents isn't any guide to their quality, obviously; some can be worked around while others are invalidated or contested, but this raw count does give some indication of who will be suing whom when the next round of litigation kicks off. ®

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