The journalist heard the name “Sisvel” for the first time during a conversation with a friend. “Sisvel is a European company dedicated to managing IP assets,” she said. “If you want to export MP3 or DVD products to Europe, you must get a Sisvel license first.” Intrigued, the journalist began to pay attention to the company.
Founded in 1982 to spin-off a significant portfolio of television patents developed by the Italian company Indesit, today Sisvel is a dynamic and full service global licensing company, and a leader in promotion, innovation and monetization of patents. Sisvel has a strong presence around the world with offices in Luxemburg, Italy (None Torinese and Milan), USA (Washington D.C.), China (Hong Kong), Japan (Tokyo), Germany (Stuttgart), and Great Britain (London).
Sisvel’s winning idea has always been to consider the results of innovation as a precious and vital resource, to be protected and promoted with the aim of helping to fund new ideas to support business growth. Sisvel has performed its own research since its creation, and therefore knows from experience the complexity of research and development, and the increasingly high costs involved.
In Sisvel’s view, revenues from royalties for the use of a patent generate a flow of capital complementary to the conventional profit arising from sales proceeds, which can then be reinvested within a company. So the result is a sort of “inventive loop” that powers new research and further innovation through the careful management of IP and the related licenses. Bearing these in mind, Sisvel supports the growth of technology through its own innovations and through its continuing support of other companies’ research and development by promoting and managing licensing programs based on their IP rights. In this way, Sisvel helps businesses maximize the value of patent rights, and simplifies access to those rights by potential licensees. So how does Sisvel work to accomplish its missions? The journalist interviewed Sisvel to find the answers.
Expertise comes from experience
China IP magazine: Sisvel has been involved in the development and management of patent licensing programs for decades. What particular expertise has Sisvel developed?
Marcello Dini: For over 30 years, Sisvel has been involved in the development and management of different patent licensing programs. It has developed a particular expertise in providing access to essential patents needed to implement standardized technologies in the consumer electronics field. Technological standards combine various technologies covered by multiple patents, which are generally owned by different entities. Before the introduction of joint licensing programs, manufacturers were forced to negotiate a license agreement with each separate entity owning patents relevant to a standard. Joint licensing programs seek to simplify this process by allowing industry players to acquire a license under patents owned by several organizations through one license agreement which reduces transaction costs and time. Sisvel has become a world leader in assisting various patent holders in making their patents available to interested parties through such joint license agreements.
We have successfully built on a unique combination of internal resources, external partnerships, and the continued development of new patent licensing programs. During its many years in licensing, Sisvel has established strong partnerships with a variety of external legal and technical professionals who work closely with Sisvel’s staff to resolve the most demanding and complex issues.
Sisvel’s motto is “Act Locally, Think Globally.” The Group seamlessly combines a global understanding of the market with a specific expertise in local IP issues. All offices are staffed with expert teams and equipped with advanced technologies and facilities. This enables the Group to offer the highest standard of service and support. A global IT platform combines and leverages the knowledge and skills from Sisvel’s offices around the world providing an unrivalled level of efficiency and economy in the management and tracking of both existing and future licensees.
The company also has a positive track record in litigation and its technical expertise in testing use of specific functions is a unique advantage in today’s complex licensing landscape.
China IP magazine: What major license programs have been developed by Sisvel in the last decades? What programs are under development?
Marcello Dini: At the beginning, Sisvel’s purpose was to license its own patents. We were so successful in managing those patent portfolios that major international players in the consumer electronics industry, such as Philips, France Télécom, TDF, and IRT, turned to us to license some of their most valuable intellectual property asset, including patents related to the MPEG Audio Standards, commonly referred to as MP3. Through nearly fifteen years of managing, the MPEG Audio licensing program has executed over 700 agreements worldwide.
The management of the MPEG Audio licensing program is a prime example of Sisvel’s expertise in protecting intellectual property rights and underscores the company’s standing as a global leader in the IP community.
In the last few years, Sisvel has been at the forefront of attempts to encourage patent owners to pool their patents and create a one-stop-shop method for acquiring rights to practice such patents, particularly in the areas of wireless communications and broadcasting. Sisvel is one of the world’s leading experts in pool licensing, with experience in creating patent pools for a variety of standards, including, for example, DVB-T, the standard for the digital terrestrial signal and its evolution DVB-T2, CDMA2000, the equivalent of UMTS technology used by certain networks in the US, UHF-RFID, the system for remote reading of coding labels, and last but not least, LTE for fourth generation telephony.
Currently, we are working toward creating joint licensing programs for the most recent versions of Wi-Fi, which allows terminals to connect to each other wirelessly through a local network, as well as DVB-C2, the standard for cable digital television. Sisvel’s work in the telecommunications sector improved immensely with its recent acquisition of over 450 Nokia patents, including several essential patents for wireless standards.
China IP magazine: How does Sisvel work with its partners to maximize returns on their intellectual property?
Marcello Dini: The recent growth of the global marketplace and the strength of emerging markets have convinced many companies to pursue vigorous protection and monetization of intangible assets to secure their competitive position and profitability.
For this reason, Sisvel continually works with its partners to maximize returns on their intellectual property by offering a comprehensive approach to patent licensing: from issuing an initial call for essential patents in joint licensing arrangements; facilitating discussions among essential patent holders; developing multiparty license agreements; executing and administering licenses; to collecting and distributing royalties.
We realized that if we want a joint licensing program to be successful, it must be attractive for both Licensors and Licensees. In particular, it should be based on an efficient licensing platform and be administered by an experienced administrator. The royalty rate must be reflective of the technological value of the patent portfolio. Lastly, it should incorporate administrative tools to enhance efficiency and make the reporting and payment process easy for licensees, and that also enhance the enforcement and compliance mechanisms to give licensees peace of mind that the same terms and conditions apply to everyone.
China IP magazine: Although the benefits of joint licensing program are quite clear, the creation of a joint licensing program always presents a significant challenge. What make Sisvel successful in joint license formation and administration?
Marcello Dini: Technologies and markets are constantly developing and an approach that was successful in one field, or geographical region, at one time may not always be the best alternative for every program.
With several decades of experience in patent management, Sisvel makes its strengths available to offer services tailored to the needs of its clients and partners. The company is capable of tailoring the structure of each particular program to maximize results while meeting patent owners’ business and administrative needs.
With a professional staff representing a wide variety of disciplines, Sisvel has a complete perspective on licensing. In addition, Sisvel has no shareholders that are active in downstream industries, and this true independence is a key factor in the facilitation and administration of joint licensing programs because it ensures that Sisvel will always act for the greater benefit of the licensors and while minimizing risk.
By virtue of its professionalism and expertise, Sisvel has facilitated the introduction and promotion of many new technologies and forged solid bonds with key global players in technology research and intellectual property development.
China IP magazine: Could you tell me more about the new patent pool for LTE technology, or 4G cellular communications? Which patent holders does the portfolio include so far? Is it still open to all LTE patent holders who are willing to join the group?
Marcello Dini: The portfolio includes patents owned by Cassidian, an EADS company, the China Academy of Telecommunication Technology, the Electronics and Telecommunications Research Institute (ETRI), France Telecom, Télédiffusion de France (TDF), and KPN, as well as patents originally filed by Nokia that Sisvel acquired in late 2011. The pool remains open to all companies that own essential LTE patents, and Sisvel continues to work with companies that have expressed interest in joining the group. We invite all parties with patents believed to be essential to the LTE standard to contact us to arrange an evaluation of essentiality by the pool's designated independent evaluator.
China IP magazine: Who will benefit from the patent pool offering licenses?
Marcello Dini: This pool license makes the current portfolio of essential LTE patents available under standard terms and conditions with a running royalty rate of only 0.99 Euros per device. It represents tremendous value for licensees and it is a great opportunity for companies advocating lower aggregate royalty rates for the benefit of the LTE industry to advance that position by participating in this joint effort rather than undertaking individual license negotiations. It has established a convenient access to essential LTE patents held by the pool and its members for the benefit of the industry. We encourage all companies that manufacture devices using LTE as well as all companies holding patents that may be essential to the LTE standard to contact Sisvel to discuss our LTE licensing program.
Stimulating Innovation worldwide
China IP magazine: In 2008, the Sisvel Group added Sisvel Technology as a subsidiary dedicated to research, development, and technical consulting. Is it a signal that Sisvel has started to produce patents on its own? What are the missions of Sisvel Technology?
Marcello Dini: Sisvel has always done R&D internally, but since 2008, the Sisvel Group decided to do this in a more structured manner with the support of Sisvel Technology, a company dedicated to research, development and technical consulting; a company capable of providing third party companies with the skills necessary to assess a patent’s economic and technical potential, while at the same time pursuing the development of new patentable technology.
Sisvel Technology’s main activities are:
1. Technical Support for Patent Licensing, in particular infringement tests, also on behalf of third Parties
2. Developing R&D on its own, Technology Scouting and Development of new IP assets
Since the beginning, Sisvel Technology has launched collaborations with the most important public and private research centers, with the goal of identifying innovative and commercially viable technical solutions within the consumer electronics field. Those working with Sisvel in this endeavor include leading companies such as Telecom Italia, Telediffusion de France and Vestel, public and private research center such as Visual Atoms, Centro Ricerche e Innovazione Tecnologia (CRIT) of RAI, Istitut für Rundfunktechnik (IRT) of Munich, CSP (Centro Supercalcolo Piemonte)—Innovazione nelle ICT, Istituto Superiore Mario Boella (ISMB) and ToP-Ix (Turin Piedmont Internet Exchange), as well as prestigious universities such as the University and Polytechnic of Turin, and the University La Sapienza of Rome.
But that was not enough for Sisvel Technology and the entire Sisvel Group; in fact, they started a project to combine the research and development capabilities of companies and research institutions in order to expand their international reach and influence. The idea is to create a technology center that excels at and promotes innovation in all markets worldwide.
Expectations in the Chinese market
China IP magazine: What is your perspective on the IP license market in China? Will Sisvel put more efforts on seeking Chinese patent holders to join the license programs?
Marcello Dini: Sisvel understood early the advantage of monitoring closely the Chinese market. The Group set up its office in Hong Kong years ago with the purpose of monitoring the market and cultivating possible partnerships. Its strategic location allowed for controlling the vast, constantly expanding consumer electronics market and for observing the development of technologies often published exclusively in Chinese language.
From our point of view, China is one of the most important markets for the business of IP licensing, not only for a large number of licensees located there, but also because it provides interesting opportunities to work with Chinese patent owners as partners and licensors. With direct support from Sisvel HK office, and highly skilled professionals operating within mainland China, our business development team is proactively fostering cooperation with Chinese patent owners based on several diversified IP business models.
At present, Chinese patent owners are becoming big players in terms of number of patent applications. However, many of them do not have enough experience and know-how to successfully monetize their IP resources. Sisvel is glad to offer its services and provide the necessary skill to help patent owners monetize their IP assets with success. We recently started our first cooperation with a Chinese patent owner (CATT in our LTE patent pool) and we sincerely hope that this is the first of many.