XR and 5G: How leveraging sound patent strategy can earn a seat at the negotiating table

Over the past decade, we have witnessed countless examples of advances in one technological field accelerating advancements in another, distinct field.  Just as improvements to battery technology have enhanced the viability of electric vehicles, and more powerful GPUs laid the foundation for modern AI models, recent improvements to 5G networks may be supporting a similar leap for Extended Reality (XR) devices.

Challenges in XR tech

Consumers are, by now, well-accustomed to ultra-high definition video content.  The upshot of this is that achieving high-definition XR visuals seems to be an important pre-condition for widespread consumer adoption of XR tech.  

One aspect of achieving this is providing effective compact projectors and waveguides.  Another is the ability to stream high-definition (HD) display content to XR devices, assuming that unwieldy local storage of HD content is best avoided.

As wireless wearables, the video-quality that can be delivered by XR glasses and headsets is generally limited by the speed of public networks used for streaming the video content (at least for use outside home router range).  As 5G networks have improved in recent years, various companies have recognized that specific adaptations for delivering XR video content over public networks will be an important step in the XR development journey.

In March, a collaboration between Ericsson, T-Mobile and Qualcomm Technologies, Inc. to launch XR trials in T-Mobile’s San Diego 5G commercial network was announced.  The trials aim to test network readiness, advanced 5G features, and device capabilities.

We have analyzed the recent patent filings of these companies in the intersectional field of networking and XR.  The results provide a helpful illustration of the role that patents can play in negotiations and business conducted between companies.

Filing statistics in the XR / Networking space

We considered patent filings by Ericsson, T-Mobile and Qualcomm Technologies tagged by the International Patent Classification scheme as related to “network arrangements or protocols for supporting network services for games, networked simulations or virtual reality".  This provides a rough indication of the filing activity of these companies in the field of networking protocols for XR over the past 10 years, though some applications directed more towards simulations or gaming may also have been captured in the data.  The results are shown in Figure 1 below:

Fig.1

As shown, for all three companies, there has been a clear upwards trend in patent filings in this field over the past ten years, especially since 2020.  The bulk of the filing activity occurs after the advent of commercial 5G in 2018 or so.  An apparent downturn in 2023 is likely to be misleadingly low due to the standard 18-month delay between patent filings and publications. 

This echoes the wider trend of patent filings by any applicant in Europe, the US and China since 2014, which appears to indicate widespread increased interest in network protocols for XR, gaming and simulation technology, as shown in Figure 2:

Fig. 2.  Post-2023 results are also affected by the 18 month patent publication delay.

The role of patents in business negotiations and opportunities

It appears each of the collaborators focused on building a solid patent portfolio in this space several years before working together.  Of course, such initiatives can arise due to a wide variety of factors; however, having a sizable patent portfolio can play an important role in all kinds of discussions and ventures between companies.   In particular, patents can serve to quantify and validate a party's expertise in a specific area while providing an important bargaining chip.  

For instance, multinational businesses with strong patent portfolios can be incentivised to cross-license with one another to gain mutual advantage, which may have been a factor in the present case study.  On the other hand, startups and SMEs can demonstrate their expertise with a strong patent portfolio, potentially winning a seat at the negotiating table with larger companies in collaboration discussions, or becoming a more attractive acquisition prospect.

It is worth emphasising that the safest practice is to get patent applications on file before entering into discussions with other parties at all, even if non-disclosure agreements are in place. This minimises the risk of an inadvertent public disclosure prejudicing a later-filed application. 

It is also worth noting that the patent system can be slow.  Many can take around five years from filing to grant (though steps can be taken to accelerate the procedure in many jurisdictions).  

For this reason, it can be important not to sit on innovative ideas and set about preparing and filing patent applications as soon as the concepts are sufficiently fleshed out.  Companies anticipating collaboration or joint ventures in the medium-to-long term should consider acting now by filing applications to secure their market position, so those applications can reach the grant stage before they are needed, come negotiating time.  Returning to the present example, Ericsson, T-Mobile, and Qualcomm appear to have been filing in this space for several years before choosing to collaborate in this sector.   Sharing knowledge in this way may not have been viable without mature patent portfolios.  Delaying patent filings also poses the additional danger that relevant public material (such as a competitor's patent) could publish and present new obstacles to your own patents meeting the “novelty” and “inventive step” criteria required for a patent application to be granted.

Conclusion

Continuing developments in 5G networks are set to facilitate smooth HD streaming to XR devices, which could make the devices increasingly viable and attractive to consumers.  Indeed, upward patent filing trends across Europe, China and the US in the field of network protocols for supporting games, networked simulations and virtual reality seem to indicate widespread interest in this technology intersection.  As we have discussed, building a strong patent portfolio early on can put companies in the best position for negotiating collaboration or acquisition deals years later.  It is usually best to proceed with filing as soon as practicable to maximise the chances of grant while sidestepping issues arising from inadvertent disclosures during discussions.

If you would like to discuss the contents of this article, or have any queries on patent protection in the fields of 5G or XR more generally, please do get in touch with our XR team via emcneil@marks-clerk.com, or speak to your usual Marks & Clerk attorney.