The ISO Holdouts: The "Nordic Companies" and Wi-Fi (Part 6 in Convergence and Competition – A Tale of Two Standards)
- Marta Beckwith
- Mar 25
- 10 min read
In Andrew Myles’ guest post (Convergence and Competition - A Tale of Two Standards Part 4 - Guest Post by Andrew Myles), he discussed the six companies that have failed to respond to ISO’s request to confirm whether or not they will grant a FRAND license for their Wi-Fi 6 SEPs. I recently took a look into the Chinese ISO holdout Huawei (Convergence and Competition - A Tale of Two Standards Part 5: Huawei) and now want to focus on the "Nordic companies"[1] that are ISO holdouts.
The Nordic ISO holdouts are:
Telefonaktiebolaget LM Ericsson (“Ericsson,” based out of Sweden),
Nokia Technologies Oy (“Nokia,” based out of Finland)[2]
And to remind you, the other ISO holdouts are:
Huawei Technologies Co., Ltd. (“Huawei,” based out of China),
Koninklijke KPN N.V. (“KPN,” based out of the Netherlands),
InterDigital Holdings, Inc. (“Interdigital” based out of the USA),
Panasonic Corporation (“Panasonic,” based out of Japan).
Why Focus on the "Nordic Companies"?
Both Nokia and Ericsson have participated in the development of 802.11 for over 25 years. Both companies have large Wi-Fi related SEP portfolios and both have been in the top twenty-five largest SEP holders for Wi-Fi across multiple versions of the 802.11 standard.[3]
You would imagine that both companies would be interested in the success of the Wi-Fi standard. However, in the last decade, both of these Nordic companies have taken actions that seem designed to sink the very standard that they ostensibly are helping to develop and should be supporting. As Andrew Myles explained, both companies have refused to state to ISO using ISO's form whether they are willing to license their Wi-Fi 6 patents on FRAND terms. This has prevented Wi-Fi 6 from becoming an international standard.
Furthermore, both Nokia and Ericsson have repeatedly refused within the IEEE, the SSO that develops the 802.11 standard, to agree to license their 802.11 SEPs on RAND terms. The last time Ericsson provided a letter of assurance to the IEEE agreeing to license its 802.11 SEPS on RAND terms was in August of 2013 (which is when 802.11ac = Wi-Fi 5 was released). Nokia has not made a RAND commitment in the IEEE on any version of 802.11 since 2015 (which is after 802.11ac=Wi-Fi 5 was released and while what became 802.11ax=Wi-Fi 6 was being developed).[4] Nonetheless, both Ericsson and Nokia have continued to participate in 802.11 development even though they have repeatedly refused to agree to grant licenses on RAND terms for their 802.11 SEPs.[5]
Nokia: Nokia began participating in the development of 802.11 no later than March, 1999. In its first decade or so of participation in 802.11, Nokia provided nearly thirty letters of assurance agreeing to grant licenses to 802.11 SEPs on RAND terms. But, starting in 2015, Nokia has repeatedly submitted so-called “negative” letters of assurance in which Nokia explicitly states that it will not agree “to make available a license for Essential Patent Claims under Reasonable Rates to an unrestricted number of Applicants on a worldwide basis with other reasonable terms and conditions that are demonstrably free of unfair discrimination to make, have made, use, sell, offer to sell, or import any Compliant Implementation that practices the Essential Patent Claims for use in conforming with the IEEE Standard.”
Nokia’s refusal to agree to license on RAND terms in the IEEE extends beyond 802.11. Nokia appears to be following this same pattern for other IEEE standards that it is participating in developing. While I have not checked the IEEE LoA records for all of the standards listed on the website, I have checked most of them. For each of the standards I reviewed for which Nokia has submitted at least one letter of assurance after 2015, Nokia has only submitted negative LoAs after that date refusing to agree to grant a RAND license.[6]
Ericsson: The first record I could find of Ericsson participating in the development of 802.11 was in September of 1998. In its first decade of participation in the 802.11 working group, Ericsson submitted LoAs agreeing to license its SEPs on RAND terms for 802.11a, b, e, f, g, h, i, n and ac (i.e. for the early versions of the standard plus what became known as Wi-Fi 4 and Wi-Fi 5). But, beginning in September of 2016, Ericsson started submitting negative LoAs including for 802.11ah, ax (i.e. Wi-Fi 6) and ai. Then, despite continuing to participate in the development of 802.11, Ericsson went radio silent. It appears Ericsson has not submitted any letters of assurance (positive or negative) for 802.11 or any other IEEE standard since 2018, more than six years ago.
This raises an important question about the behavior of these Nordic companies: Why would companies that have participated in the development of a standard since the early versions of that standard were released now refuse to agree to license implementers on RAND terms for later versions of that same standard? Let’s start with what both companies claimed was the reason that they stopped agreeing to RAND commitments: the 2015 IEEE IPR Policy change.
The Red-Herring: IEEE Rule Changes
On February 8, 2015, the IEEE changed its Intellectual Property Rights (“IPR”) Policy to provide that determination of royalties for RAND committed SEPs should consider the value the inventions adds to the value of the smallest saleable compliant product or component part that practices the Essential Patent Claim. The policy change also specified that by agreeing to license on a reasonable and non-discriminatory basis, the SEP holder was giving up the right to see an injunction or other prohibitory order unless “the implementer fails to participate in, or to comply with the outcome of, an adjudication, including an affirming first-level appellate review, if sought by any party within applicable deadlines, in that jurisdiction by one or more courts that have the authority to determine Reasonable Rates and other reasonable terms and conditions.”[7]
In other words, the change clarified that a reasonable RAND royalty should be based on the actual value of the invention to the thing that first implements the standard and should not be based on the made-up concept of “use cases.” (See The Myth of "Use Cases" - LES SVC Part 2 for an explanation of the licensor made up concept of use cases and why that does not represent how the real world operates). In addition, the amended policy made clear that injunctions on RAND committed SEPs should only be available after the entity that made the RAND commitment had exhausted other legal mechanisms to obtain a license.
These policy changes drew immediate condemnation from both Ericsson and Nokia, as well as several of the other ISO holdouts including Huawei and Interdigital. Interdigital went so far as to suggest that a “handful of manufacturers of devices — the people who pay for the use of the technology — essentially co-opted the IEEE patent committee.”[8]
I’ll note that in 2014 when what became the final version of the new IPR Policy was being considered by the IEEE SA Patent Committee (“PatCom”), the PatCom had six voting members of which one was from Nokia and one from Ericsson. The other voting members of the PatCom in 2014/2015 were as follows: the Chair was from Hewlett Packard Enterprises, one of the other members was at Microsoft, one was from Intel and one of them had long and deep ties to IEEE including having been the Treasurer of the IEEE SA for seven years. See [9]. He also had his own consulting firm which may have been doing work for Apple at the time (memories are hazy on this and I could not find documentation confirming or denying it).
I’ll further note that, contrary to Interdigital’s claim and excluding the consulting company which as far as I know is neither an implementer nor a SEP holder, none of these companies are pure implementers. They all hold 802.11 SEPs and both Intel and Apple (taking at face value the idea that the consultant was acting on behalf of Apple) routinely make the list of top ten Wi-Fi 6 patent holders. Indeed, Intel’s Wi-Fi SEP portfolio is reported to be larger than either Ericsson’s or Nokia’s. See [3].
I’ll also note that by the time the new IPR Policy was approved by the IEEE in 2015, the six voting members of the IEEE SA Patent Committee included one person from Nokia, one from Ericsson and one from Interdigital, e.g. 50% representation from the ISO holdouts. See [9].
Given Nokia and Ericsson’s representation on the PatCom in both 2014 and 2015, Nokia and Ericsson’s refusal to accept the vote seems a bit like sour grapes. But, that is what they and several of the other ISO holdouts relied upon to explain why they would no longer agree to grant RAND licenses. See [8].
In any event, the objectors finally got their way, and the IEEE IPR Policy was again changed in 2022. The 2022 rule change represented a “major success” for SEP holders and a “major defeat for Apple and its allies.”[10] The 2022 IPR Policy (which took effect on January 1, 2023) walked back both of the changes that Nokia, Ericsson and Interdigital had complained about.
Nonetheless, despite getting the IPR Policy changed to the benefit of SEP holders, the Nordic companies Nokia and Ericsson still have not agreed to grant RAND licenses for their 802.11 SEPs. Nokia is still actively submitting negative LoAs for 802.11 in which Nokia refuses to agree to license its 802.11 SEPs on RAND terms. It most recently submitted two negative LoAs on September, 2024 (for 802.11ax and 802.11be).
Ericsson has not submitted any LoAs at all (positive or negative) for 802.11 (or any other IEEE standard as far as I can tell) since November, 2018. In other words, Ericsson has participated in the development of 802.11 for more than 6 years without letting the IEEE know what they will do with their 802.11 SEPs.
Despite this failure, Ericsson currently sits on the IEEE Standards Association Board of Governors (“SA BoG”). So does Interdigital and Huawei (through its affiliate Futurewei). Indeed, Futurewei now holds the Chair of the SA BoG. The SA BoG is responsible for the general governance of the IEEE Standards Association, including “establishing policy, providing financial oversight, and conducting standards-related activities within IEEE technological fields.”[11] The SA BoG is also responsible for overseeing all of the IEEE SA committees, including the PatCom and the 802.11 working group. In other words the SA BoG is ultimately responsible for the IPR policy for the IEEE SA under which the 802.11 working group operates.
The SA BoG also is the organization that Andrew Myles was told was dealing with the ISO holdout issue but which, he observed “has been extremely slow and/or not very successful given that after more than two years there has been no obvious progress.”
I’ll leave you to draw your own conclusions as to why the IEEE SA BoG does not appear to be making much progress on this issue.
[1] I borrowed this terminology from an Ericsson article: The Nordic advantage - Ericsson.
[2] The company now called Nokia Technologies Oy is not the same Finnish company that it was in 1865 when it originated. The current incarnation of Nokia is comprised of a number of different companies that were acquired over the years. It’s a slightly tangled history but worth understanding for these purposes. The saga starts with the breakup of the seminal American telephone company, fka American Telephone & Telegraph (“AT&T”).
In 1996, AT&T spun out its telecommunications equipment divisions, which included Bell Labs, as a new company, Lucent Technologies. Lucent started out gangbusters. At one stage, it was the world’s largest telecommunications and networking equipment company. It sold products both on the Wi-Fi side and on the cellular side, as well as many backend networking products. Lucent was involved in the development of 802.11 from its inception. But, Lucent also was engaged in some financial and reporting irregularities. When the dot com bubble burst and Lucent’s accounting irregularities came to light, it experienced dramatic declines in revenue and stock price as well as shareholder lawsuits and SEC investigations. It spun out several business and then finally was acquired by the French telecommunications company Alcatel SA. See The Rise and Fall of Lucent Technologies.
Alcatel SA was created by the conglomeration of several old school French and other European companies. Like Lucent, Alcatel was a company that started in landline telephones and networking equipment but made forays in the 1990s to expand its business to include Internet and IP protocol networking. It also had a history of financial and other improprieties. It also suffered greatly from the dot com bust and in 2006, Alcatel and Lucent merged into a new company called Alcatel-Lucent. See Alcatel | IT History Society; SEC Charges Alcatel-Lucent with FCPA Violations; 2010-258; December 27, 2010; and Office of Public Affairs | Alcatel-Lucent S.A. and Three Subsidiaries Agree to Pay $92 Million to Resolve Foreign Corrupt Practices Act Investigation | United States Department of Justice. Alcatel-Lucent managed to avoid Nortel’s bankruptcy fate, but was not wholly successful in reinvigorating its businesses through the merger. It was subsequently acquired by Nokia in 2016, and the Alcatel-Lucent name was (mostly) abandoned in favor of Nokia’s name.
As a general rule for purposes of this post, I have not ascribed to Nokia actions taken by people identified with Bell Labs, Lucent, Alcatel or Alcatel-Lucent or related companies particularly when those actions (such as attendance at meetings or submission of LoAs) took place prior to Alcatel-Lucent’s acquisition by Nokia.
[4] You can find all of the letters of assurance (positive and negative) at IEEE SA - Records of IEEE Standards-Related Patent Letters of Assurance by clicking on the applicable standard, e.g. IEEE 802.11 and amendments (XLSX), and downloading the spreadsheet. Each spreadsheet has links to the submitted letters.
[5] You can find the 802.11 working group meeting minutes here: SUMMARY REPORTS & MINUTES OF 802.11 WG SESSIONS. If you take a look at them, you’ll see Ericsson and Nokia represented at most of the meetings for which attendance has been recorded after the dates noted in the post.
[6] See e.g. the Nokia letters for 802.16 and 802.19 dated after 2015 in the IEEE LoA link cited in [3] above.
[8] See https://www.iam-media.com/article/ericsson-and-nokia-the-latest-confirm-they-will-not-license-under-the-new-ieee-patent-policy (Ericsson and Nokia) and Why We Disagree with the IEEE's Patent Policy - EE Times (Interdigital)
[9] See e.g. https://standards.ieee.org/wp content/uploads/import/governance/patcom/0614patmins.pdf for the 2014 PatCom members and IEEE-SA STANDARDS BOARD MEETING for the 2015 PatCom members
[11] IEEE SA - About Us