This is a summary of the 5G conference that took place on February 28, 2020, at the USD school of law.

What is 5G?

5G is the next generation of wireless communication technology systems or “ecosystem.” It promises three improvements: (1) Speed (2) Bandwidth (3) Latency.

What is the difference between speed, bandwidth, and latency?

If you imagine the internet as a series of interconnected highways you can think of the connections in terms of roads. The bandwidth or density is akin to the number of lanes. It is the measurement of how many cars can fit on the highway or how much information can be transferred at once. The speed is how quickly a car can get from point A to point B. The latency is the measure of the delay for that car to make the round trip.Bandwith Speed Latency Image

These measures are dependent on each other, which is why it is a technology ecosystem. The speed of your machine or server receiving and sending signals will affect the overall latency. Likewise, the bandwidth of the connection will affect the latency.

In general, you want HIGH bandwidth, HIGH speed, and LOW latency. 5G promises to improve these by a factor of 10 to 100. For example with 4G,  you can download a two-hour movie in 40 minutes, whereas with 5G it will take less than 10 minutes.

Low latency is most critical for new applications. 4G has a latency of 50ms while 5G offers a lower latency of 1ms. With low latency, devices can more easily communicate with servers and each other. For example, an autonomous vehicle quickly processes a sensor input to avoid colliding with another vehicle. Thus, 5G will open up the application for the internet of things or IoT.

IoT Mesh networks?

Mesh Network Diagram

One of the biggest challenges of IoT is how devices communicate with one another. 5G reduces that latency to allow for more devices to transmit information more quickly and reliably. Furthermore, 5G allows devices to communicate directly with each other without requiring them to go through a server. This has huge implications for the future of autonomous vehicles in particular. If cars can instinctively communicate directly with other vehicles or smartphones many of the current challenges with autonomous vehicles could be solved. Emergency response systems could be greatly improved by decreasing delays from sensors to response teams. Drones could form mesh networks to give real-time information for emergency managers.

Wearable Device ImageFor your everyday consumer, a low latency highly reliable mesh network means the advent of augmented reality devices. At the moment,  a major hurdle of augmented devices is the data processing of input data from sensors. If the local device needs to compute that data it adds substantial physical weight in order to provide sufficient computing power. Whereas if the device is integrated into a wireless network all it needs to do is send data, receive the processed data, and display the results. Meaning you could wear a light pair of glasses equipped to record your surroundings and display real-time information.

5G Development and Deployment

Research, Standards then CommercialAs one might expect 5G technology is complicated. It should not come as a shock the legal dynamics are also complicated. Those legal issues were the focus of the recent 5G conference at USD. There are three broad stages to 5G coming to a device near you. Research, standardization, and commercialization. Various companies, many of whom were represented at the conference, are involved in the 5G research and development stage. As a consequence, billions of dollars are spent to develop technologies that can be patented.

Patents, FRAND, LicensingThese various companies who develop 5G technology come together to oversee standards in organizations, such as the International Telecommunications Union and the Institute of Electrical and Electronics Engineers. The standards organizations set technical standards enabling the various technologies to work together. The standards are like a building code. From there the inventors and producers of devices can build the specific devices and physical tech. Converging Patents DiagramAs part of the standardization agreement, these companies who hold these patents agree to Fair Reasonable and Non-Discriminatory licensing agreements (FRANDs). In theory, this should make it easier for manufacturers to license from the patent holders. Unfortunately, that is rarely the case. Smaller manufacturers, in particular, have a significant disadvantage in determining who to license from and negotiating a reasonable rate that will actually be accepted by the market.

To make matters worse, oftentimes a single piece of technology is built on stacks of patents that are held by different companies. This extremely complicated bundle of patents with seemingly endless numbers of patents is referred to as the “patent thicket.”

If you’re a manufacturer there is an incentive to commit what is termed an “efficient breach.” Ever since Winter v. Natural Res. Def. Council, Inc., 129 S.Ct. 365, 172 L.Ed.2d 249, 555 U.S. 7 (2008) getting an injunction against infringement is much more difficult for patent holders. This allows some unscrupulous manufacturers to intentionally violate patents and just pay fees if they ever get caught. Some businesses rely on a business model in which their whole source of revenue comes from licensing. On the other hand, there are patent trolls who intentionally exploit manufacturers. A patent troll will often buy patents for the sole purpose of exploiting manufacturers who have unwittingly violated those patents.

One solution that has been proposed is patent pools. In that scenario, the various patent holders create a pool that allows manufacturers to come to one place, pay one licensing fee, and move on to commercialization. The problem with that is the competing interests of the patent holders. Many patent holders have spent billions of dollars in research and development and understandably want to recoup that investment. Thus original patent holders are inclined to demand a larger piece of the pie. Sometimes they want to secretly recoup all of their research and development costs, even if it was not directly useful or fruitful. Thus they put a bigger price tag on their patents than it may well deserve.

The other issue is how to determine if the licensing fee is correct. Should it be licensed at the unit level? If so should the different units be licensed differently? For example, should a chip on a drone cost more than on a cell phone? All of these licensing agreements are supposed to be made in advance of commercialization which means the manufacturer takes a gamble that the licensing fee, along with the other costs of manufacturing will be accepted by the market.

Supply Chain Diagram

Thus, a licensing fee sometimes reflects the demands of the companies who are trying to recoup their investments more so than what an end-user would actually be willing to pay.

The other problem is that because these are often merely pieces of a given device, the value of that piece can be overblown. The analogy frequently given is how much would you be willing to pay for a car with windshield wipers vs. one without wipers? Should that price difference be reflected in the licensing fee? Yet any given device is greater than the sum of its parts. If all the components in a vehicle are priced based on the amount consumers are willing to pay more for that component given the option of not having it, what emerges is a complete vehicle more expensive than any consumer would be willing to pay. In other words, the price of the components is determined by the price of the whole.

National Security Interests

The United States has accused one of the biggest developers of 5G, Huawei, of creating back doors in their 5G technology. Chinese companies have spent an astonishing amount of money in developing this technology and are racing to get it implemented. The US has effectively banned any use of the 5G tech in the united states over fears of espionage and interference.

In recent years China has increased its respect for intellectual property and has begun implementing a much more reliable enforcement mechanism. It is certainly conceivable that some of the patents necessary to the deployment of 5G are held by the Chinese who may be a lot less willing to cooperate. Furthermore, China is much more efficient with deployment because the government can force cooperation within their tech sphere. Thus, the complications described above become less thorny and as a result,  China will likely have 5G before we do. Thus, putting the US at a distinct disadvantage technologically and by extension, economically. Despite the credible evidence put forward by the US, Europe has still decided to move forward with implementing Huawei’s 5G technology. That means Europe may also have 5G before the US does. Nevertheless, many European companies like Eriksson and Nokia, who had representatives at the conference, are very interested in their 5G technology being used in the US and abroad.

Moving Forward

There are organizations that are dedicated to simplifying the licensing process. Unified Patents, for example, provides a patent search using artificial intelligence to identify potential patent holders that might be essential to proper licensing. They also bring suit against patent trolls and other companies that hold suspect patents that should be invalidated. Unsurprisingly, representatives from Unified Patents got into a rather heated exchange with some of the other companies represented at the conference.

The copyright system has effectively overcome an analogous problem with the use of mechanical royalties. While a one-size-fits-all fee will be unlikely to be profitable for the patent holders a similar process might be necessary to streamline the licensing process for innovators and manufacturers. Given the significance of this technology, bipartisan interest in the issue should overcome some of the intransigences in passing federal legislation to streamline these issues. Various agencies, such as the FCC, USPTO, FTC, and NSA have proven to be surprisingly cooperative with telecommunications issues. The law always lags behind technology, but perhaps a little legal creativity and innovation can reduce that latency. This is a field that any law student with an interest in IP and technology should pay very close attention to.

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