How Many 5G Standard Essential Patents (SEPs) Have Been Declared by the Industry and What Are the Future Battles?

By November of 2022, there have been 48,793 unique patent families declared essential to The 3rd Generation Partnership Project (3GPP) 5G standards according to a recent patent conducted, using the ETSI patent declaration database. Most of those patents are related to foundational technical specifications on 5G New Radio (NR) functionalities, such as Radio Resource Control (RRC), Protocol specification, Physical layer procedures for control and data, and Physical layer channels and modulation. As expected, technical specifications from 3GPP RAN1 and RAN2 Working Groups (WG) are the most important sources for 5G patent declarations, taking over 80% of total declarations on standard essentiality. Network infrastructure vendors and chipset vendors, including Huawei, Samsung, Qualcomm, ZTE, Nokia, and Ericsson, own about half of the total declared patent families, followed by handset/User Equipment UE vendors, including LG, OPPO, vivo, Xiaomi, Lenovo, and Apple, some of which show an increasing trend to establish their Standard Essential Patent (SEP) portfolios.

SEP refers to patented technologies covering telco standards. Because mobile communication heavily relies on standardization for compatibility and interoperation between networks and devices, it brings a large number of patent implementers into the supply chain that follow the mobile standards. In general, a SEP strategy starts from Research and Development (R&D) investments on potential patentable technologies, filing patents for those technologies, participating in Standard Development Organizations (SDOs), and finally declaring essentiality on patents. Alternatively, the current 5G SEP declaration is a result of an accumulative effort and a long-term investment circle.

In 2022, 50% of total mobile devices shipped in 2022 had 5G features, and the annual shipment of 5G mobile devices will double in 2027 to 1.36 billion, according to ABI Research. The market size of 5G smartphones suggests lucrative licensing revenue and royalties for existing patent owners like network infrastructure and chipset vendors, which will continue to invest in 5G SEPs. It also motivates smartphone vendors to build up their own 5G SEP portfolios for a defensive position by entering cross-licensing agreements to avoid or reduce licensing fees. Apart from smartphones, 5G is expected to support wide industrial applications, such as Internet of Things (IoT) devices and wearables, which may see uptake in the market after 2025, which means more players on the supply chain will be influenced by 5G SEPs.

Currently, 5G-Advanced releases are the focus for companies interested in SEPs. After Rel-17, published in March 2022, 3GPP has been working on Rel-18, the first 5G-Advanced release since December 2021, receiving more than 30,000 written contributions from hundreds of companies and organizations, according to ABI Research analysis.  Rel-18 includes continuous enhancements on 5G network capabilities, such as New Radio (NR), Multiple Input, Multiple Output (MIMO), mobility, Uplink (UL) coverage, and new use cases enhancements, such as Extended Reality (XR), Reduced Capability (RedCap) User Equipment (UE), and Artificial Intelligence (AI)/Machine Learning (ML) for Radio Access Networks (RANs) and air interfaces.

ABI Research observes strong interest from the industry in three topics: RedCap, XR, and AI/ML for network optimization in terms of 3GPP contributions, which is also in line with our expectation for the future potential of commercialization. RedCap was introduced by Rel-17 and will be enhanced in Rel-18. From 2023, network operators are expected to trail network infrastructure to support Rel-17 RedCap use cases, such as RedCap IoT sensors, surveillance cameras, and wearables, and then upgrade to Rel-18 with increasing market opportunities. ABI Research forecasts that RedCap devices will grow to 972 million in 2030, surpassing half of the 5G (including 5G-Advanced) smartphone market size. XR traffic optimization and energy saving is another key topic for 5G-Advanced, which may accelerate the adoption of XR applications in a few years. The use of AI/ML throughout the network may increase at a fast pace due to handling complicated use cases for network operations, energy saving, and network securities. For network-side implementations, especially in multi-vendor offerings, work done in 3GPP, combined with the platform defined by the O-RAN Alliance, may accelerate the use of AI in the network even further. ABI Research expects that AI/ML may quickly become a necessity for current 5G networks and in subsequent generations of wireless deployments.