Alcatel-Lucent, Ericsson, NEC, NextWave Wireless, Nokia, Nokia Siemens Networks and Sony Ericsson have announced a mutual commitment to a framework for establishing predictable and more transparent maximum aggregate costs for licensing intellectual property rights (IPR) that relate to 3GPP Long Term Evolution and Service Architecture Evolution standards (LTE/SAE).

The framework is based on the prevalent industry principle of fair, reasonable and non-discriminatory (FRAND) licensing terms for essential patents. This means that the companies agree, subject to reciprocity, to reasonable, maximum aggregate royalty rates based on the value added by the technology in the end product and to flexible licensing arrangements according to the licensors’ proportional share of all standard essential IPR for the relevant product category.

Specifically, the companies support that a reasonable maximum aggregate royalty level for LTE essential IPR in handsets is a single-digit percentage of the sales price. For notebooks, with embedded LTE capabilities, the companies support a single-digit dollar amount as the maximum aggregate royalty level. The parties believe the market will drive the LTE licensing regime to be in accordance with these principles and aggregate royalty levels.

This framework balances the prevailing business conditions relevant for the successful widespread adoption of the LTE standard, which continues its progress toward definitive adoption by the industry in the applicable standards forums and organizations.

“The adoption of this initiative will reassure operators of the early widespread adoption of LTE technology throughout the consumer electronics industry,” Ericsson’s Senior Vice President, General Manager and Chief Technology Officer Håkan Eriksson said.

“Today’s devices contain a multitude of different technologies. To ensure all patent holders are treated fairly without stifling the market, it would be preferable for patent holders to offer reasonable terms.” said Ken Stanwood, Executive Vice President Technology and Standards, NextWave Wireless.

“In order to connect 5 billion people and deal with 100-fold traffic at lowest cost of ownership we need to create economies of scale, ” said Stephan Scholz, CTO of Nokia Siemens Networks, “Mobile broadband implementation using technologies with a predictable, transparent maximum aggregate costs for licensing intellectual property rights will drive global adoption and foster social and economical growth.”