Getting to the truth about 5G SEPs - part one

The 5G space continue to make headlines but, Matthew Noble, Jane Mutimear and Richard Vary argue, some reports looking at SEP leadership in the sector might be falling short

Heralded as a game-changing development, 5G has the potential to disrupt many industries – from automotive to medical – and could be key to ushering in the fourth industrial revolution. Assessing which companies are leading the development of 5G is of immense interest right now, both commercially and politically. To capitalise on this, a number of analytics firms have recently published reports attempting to rank each company’s contribution to 5G.

Tomorrow we will take a detailed look at the difficulties of getting an accurate picture of where true leadership in the 5G SEP space resides. Today we provide a summary of why we believe some of the reports recently published about this subject - as well as the press coverage they have received - potentially paint a misleading picture of the reality.

IPlytics is a European-based patent analytics firm with a focus on standardised technology such as 5G. It has published reports on 5G leadership and its data has been picked up in articles on 5G leadership published by the likes of CNN, the Wall Street Journal and Statista. We reviewed IPlytics’ February 2019 report (it has also produced an updated report, dated April 2019). Figure 2 of both reports seeks to rank the top 5G SEP owners.

It would appear that IPlytics’ reports suffer from several issues. These can be summarised as follows:

  • IPlytics’ title for Figure 2 in its February report is “Top 5G Standard Essential Patent Owners”. This implies first that this is a count of patents and second that this is a count of essential patents. However, it does not appear that IPlytics has assessed essentiality or allowed for different rates. This is unfortunately misleading, for reasons we will outline in Part Two of this article, which will be published tomorrow. IPlytics’ April update retitled the table as “Top 5G standard essential patent owners as to the number of patent families”, which clarified that what was being counted was families rather than patents. However, the results still appear to be a count of declared families, rather than essential families. A more accurate title would have been “top declarers of potentially 5G-essential families”.
  • There is no explanation as to whether IPlytics is counting granted patents only or whether it includes non-granted applications. The term “standard essential patents owners” may suggest a count of granted patents but their numbers do not support such a filter.
  • The reports are unclear as to the dates on which declaration data was acquired. The only date given in the first report is the date of the report itself (ie, February 2019). In the updated report the date is only given for the first table, which lists numbers of declarations by year (given as “as to April 2019”). It is unclear whether this date applies to the later tables. Whatever date has been used, IPlytics does not appear to have filtered its declaration data to an earlier declaration date, meaning that its results are tainted with the bias from the lag in ETSI’s database.
  • The reports do not make clear what source has been relied on for either the declarations (eg, ETSI downloads or the bi-annual special report published by ETSI) or the patent (bibliographic) information that needs to be used to count applications or patent families. Again, each produces different results.

We have been unable to replicate the data or the company rankings in the IPlytics reports even exploring the various permutations about choices that could have been made. It is unfortunately not possible to verify IPlytics’ data without further information as to how the analysis was carried out.

Errors in Bloomberg data

On 11 February, Bloomberg published an opinion article entitled “China’s 5G riches are a blocked number for investors”, which claimed that “Huawei leads the world in the number of declared essential patents for next-generation wireless technology”. Although the article clarified that it was reporting on declared essential patents rather than essential patents per se, it did not explain to readers that declaration counts do not necessarily mirror holdings of truly essential patents.

Bloomberg’s analysis contains the same errors as the IPlytics data. It does not clarify:

  • the date of the analysis;
  • the source data relied on; or
  • which metrics are used.

As a particular example, the Bloomberg article refers to counts of 5G patents but it is unclear whether it is counting declarations, applications or families.

Out in the open

With the current high level of interest in 5G and given that rankings are so susceptible to the methods and assumptions used, analysts need to be careful to conduct analysis accurately and report it fairly. Reports should include, as a low bar, an explanation of what was measured, when and how. Ideally any report on 5G leadership should include sufficient information that the results can be verified and reproduced using external sources.

Even if some analytics firms prefer to keep their methodologies secret, journalists and other consumers of these reports need to be aware of the limitations and biases of any single method of analysis when reading such reports and the fact that other methods of analysis may produce a very different result.

Action plan

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Recent reports and articles on 5G patent leadership paint a misleading picture and typically present their results as having a greater accuracy than is warranted. Determining an accurate ranking of 5G leadership, especially at this early stage for the technology, requires transparency, the use of multiple methods of assessments, and legal and industry-specific knowledge. Here are a few things to look out for:

  • Any count of 5G SEPs should include some sort of measure of essentiality.
  • Focusing on patent families in the United States and Europe can be a useful tool in identifying the most significant patents.
  • Calculating the raw numbers of 5G declarations, applications and patent families produces different results as to who is leading the 5G race. 
  • The time lag between a declaration being made and it appearing in the ETSI database needs to be taken into account as SEP counts are updated.

In Part Two of this article, which will be published tomorrow, the authors go into further detail about methodologies for assessing the 5G SEP landscape and suggest measures that they believe could paint a more accurate picture of where leadership truly lies

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