Apple pledges royalty-free licensing of "nano-SIM" technology geared towards future iOS devices

Posted:
in iPhone edited January 2014


Apple will reportedly offer to license a new, ultra-compact SIM card technology to rival mobile devices makers if they agree back the format as the new industry standard for subscriber identification modules (SIM), a move which could pave the way for more compact and efficiently-designed iOS devices.



The pledge, said to have been outlined earlier this month in a letter to the European Telecommunications Standards Institute (ETSI) penned by a senior member of Apple's legal council, comes just days before the iPhone maker is expected to square off against opponents of the design at the organization's Smart Card Platform Plenary in southern France.



Sized roughly a third smaller than existing MicroSIM cards found inside current iPads and iPhones, the proposed nano-SIM design -- which is also noticeably thinner than that of MicroSIM -- has already garnered the support of most European wireless carriers as part of their own proposals to the ETSI.



However, rival mobile device makers Nokia, RIM and Motorola have each voiced concerns in opposing standardization of nano-SIM -- mainly out of fears Apple could eventually claim ownership of the patents behind the format, placing the company in a position of powered where it could command royalties from the broader industry.



The March 19th letter to the ETSI stands to invalidate these concerns, according to independent intellectual property analyst Florian Mueller, through "an unequivocal commitment to grant royalty-free licenses to any Apple patents essential to nano-SIM, provided that Apple's proposal is adopted as a standard and that all other patent holders accept the same terms in accordance with the principle of reciprocity."



"This shows that Apple is serious about establishing the nano-SIM standard rather than seeking to cash in on it," he said. "Apple is a company that values its intellectual property and rarely gives it away for free. But as far as the evolution of SIM cards is concerned, Apple is clearly being generous and absolutely pro-competitive."





Apple's proposed nano-SIM would be even smaller than existing mini-SIM (top) and micro-SIM (bottom) designs.










In 2010, Apple was said to be working on an embedded SIM design that would allow users to select a carrier and service plan directly from their iPhone. But those plans allegedly upset the wireless operators, who felt they could be marginalized by such a move. As such, the Cupertino-based company compromised and began talking with carriers about designing a smaller SIM card that eventually emerged as the existing MicroSIM.



Apple's continued push towards further miniaturization of SIM cards aims to reduce the space required to house the identification cards inside its future mobile devices, paving the way for devices that are either more compact or free up additional space for other components, such as larger batteries.



[ View article on AppleInsider ]

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Comments

  • Reply 1 of 51
    Quote:

    "an unequivocal commitment to grant royalty-free licenses to any Apple patents essential to nano-SIM, provided that Apple's proposal is adopted as a standard and that all other patent holders accept the same terms in accordance with the principle of reciprocity."





    What does the bolded language mean? What will the "other patent holders" need to do?
  • Reply 2 of 51
    jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by AppleInsider View Post


    In 2010, Apple was said to be working on an embedded SIM design that would allow users to select a carrier and service plan directly from their iPhone. But those plans allegedly upset the wireless operators, who felt they could be marginalized by such a move. As such, the Cupertino-based company compromised and began talking with carriers about designing a smaller SIM card that eventually emerged as the existing MicroSIM.



    The embedded SIM design is the way the industry should be going. There's no reason for a SIM and eliminating it would make the device less expensive and more robust.



    It would not be hard to set up a mechanism where users could manually enter the numbers.
  • Reply 3 of 51
    Quote:

    "an unequivocal commitment to grant royalty-free licenses to any Apple patents essential to nano-SIM, provided that Apple's proposal is adopted as a standard and that all other patent holders accept the same terms in accordance with the principle of reciprocity."





    What does the bolded language mean? What will the "other patent holders" need to do?
  • Reply 4 of 51
    Quote:
    Originally Posted by I am a Zither Zather Zuzz View Post


    What does the bolded language mean? What will the "other patent holders" need to do?



    Basically, it means that everyone is free to use their patents in the standard all they want so long as they contribute any required patents to the same licensing.



    So, for example say the nano-SIM is ratified as a standard. Anyone using the standard must use 20 patents. 10 of those are belonging to Apple, 10 are belonging to Motorola. Anyone and everyone is allowed to use Apple's patents freely, except Motorola. Motorola can only use Apple's patents freely so long as everyone else is able to use Motorola's relevant patents freely as well.
  • Reply 5 of 51
    john.bjohn.b Posts: 2,742member
    Quote:
    Originally Posted by I am a Zither Zather Zuzz View Post


    What does the bolded language mean? What will the "other patent holders" need to do?



    It means what it says it means.



    Companies that try to withhold standards-essential FRAND patents (in violation of prior licensing agreements and EU anti-trust law) wouldn't be licensed to use this. Yes, that would include your buddies at Motorola and Samsung. Based on Motorola's recent legal shenanigans, I think all FRAND patent agreements in the future will have similar language.



    What's good for the goose is good for the gander.
  • Reply 6 of 51
    Quote:
    Originally Posted by John.B View Post


    It means what it says it means.



    Companies that try to withhold standards-essential FRAND patents (in violation of prior licensing agreements and EU anti-trust law) wouldn't be licensed to use this. Yes, that would include your buddies at Motorola and Samsung. Based on Motorola's recent legal shenanigans, I think all FRAND patent agreements in the future will have similar language.



    What's good for the goose is good for the gander.



    I wonder what FRAND encumbered SIM card patents currently exist? I wonder how much companies are currently asking and getting for royalties?



    Is Apple offering something that nobody wants, in exchange for getting currently valuable patents for free?
  • Reply 7 of 51
    Quote:
    Originally Posted by I am a Zither Zather Zuzz View Post


    I wonder what FRAND encumbered SIM card patents currently exist? I wonder how much companies are currently asking and getting for royalties?



    Is Apple offering something that nobody wants, in exchange for getting currently valuable patents for free?



    Your words are self-contradictory. The only patents they'd be getting for free are those involved with the SIM standard - ones you just questioned the existence of.
  • Reply 8 of 51
    Quote:
    Originally Posted by mbarriault View Post


    Your words are self-contradictory. The only patents they'd be getting for free are those involved with the SIM standard - ones you just questioned the existence of.



    I don't know what sort of patents are shared or under what sorts of royalty schemes. If any of them are currently valuable, would Apple get them for free?



    That's what I'm wondering: What's in this for Apple? How big a burden is this proposal for the current patent holders?



    My guess is that Apple will be getting more than it gives. Otherwise, I don't understand Apple's incentive. If Apple wanted to unilaterally start using a smaller SIM, it would just do so. Why do they want it to become a new standard, and what are they getting in return?
  • Reply 9 of 51
    Quote:
    Originally Posted by John.B View Post


    ...Based on Motorola's recent legal shenanigans, I think all FRAND patent agreements in the future will have similar language...



    The FRAND patent policies of all the major standardization bodies already imposes such expectations on their signatories, and they have done so since long before this most recent spat of smartphone patent lawsuits.
  • Reply 10 of 51
    Quote:
    Originally Posted by lfmorrison View Post


    The FRAND patent policies of all the major standardization bodies already imposes such expectations on their signatories, and they have done so since long before this most recent spat of smartphone patent lawsuits.



    There is no current expectation that patent holders will contribute their work for free. FRAND encumbered patents are licensed to others for royalties. My guess is that some of the royalties are big profit centers for those who hold valuable patents.



    In the SIM card standards, what are the relevant patents that other companies need to license for free if they accept Apple's deal?
  • Reply 11 of 51
    drdoppiodrdoppio Posts: 1,132member
    I thought Nano-SIM already existed:



    http://en.wikipedia.org/wiki/Subscriber_identity_module



    Or is this an alternative nano-SIM (considering the claim that it's thinner)?



    Anyway, the consensus from a previous discussion seemed to be that a smaller SIM is a nuisance, as it lacks severely in convenience of handling while providing negligible size advantages.



    The problem I anticipate with a potential embedded SIM is something of the sort:



    Message when you enter your soft-SIM number in your phone:



    "Your device is not licensed to operate on our network. Please contact the nearest vendor for our selection of newest compatible models"...



    Or, even worse:



    "Another device has been registered to this Subscriber identity module. In order to activate a different phone to use with your subscription, please: a) come to our service center to register; b) pay a fee; or c) ugh, no, you can't do anything."



    Knowing how American telcos operate, I'd expect some bullsh*t of the sort exemplified above...
  • Reply 12 of 51
    Quote:
    Originally Posted by I am a Zither Zather Zuzz View Post


    There is no current expectation that patent holders will contribute their work for free. FRAND encumbered patents are licensed to others for royalties. My guess is that some of the royalties are big profit centers for those who hold valuable patents.



    In the SIM card standards, what are the relevant patents that other companies need to license for free if they accept Apple's deal?



    Granted, most bodies don't stick their oar into price specifically (except for the notion that the price must be fair)...



    But the concept of reciprocity most definitely is central to the patent policies of all the major standards bodies. It is at the very core of FRAND licensing in general.
  • Reply 13 of 51
    Quote:
    Originally Posted by lfmorrison View Post


    Granted, most bodies don't stick their oar into price specifically (except for the notion that the price must be fair)...



    But the concept of reciprocity most definitely is central to the patent policies of all the major standards bodies. It is at the very core of FRAND licensing in general.



    So that again brings up the question of the amount of royalties that others will need to give up in order to use the new size card that Apple is proposing.



    Who holds the current patents? How valuable are they?
  • Reply 14 of 51
    gatorguygatorguy Posts: 24,278member
    Quote:
    Originally Posted by John.B View Post


    It means what it says it means.



    Companies that try to withhold standards-essential FRAND patents (in violation of prior licensing agreements and EU anti-trust law) wouldn't be licensed to use this. Yes, that would include your buddies at Motorola and Samsung. Based on Motorola's recent legal shenanigans, I think all FRAND patent agreements in the future will have similar language.



    What's good for the goose is good for the gander.



    It's been an understanding for years that if you license FRAND essential tech, your patents that build on it are cross-licensed back to the licensee(s). That's part of the "FAIR" in FRAND. Otherwise a competitor could license your essential patents that may have taken years of investment and inventiveness, improve on them to the point they become the new industry preference and lock you out of the market that you made possible to begin with by not giving you access to the improvements. That wouldn't be FAIR would it? That's something Florian Mueller knows but neglected to emphasize if he mentioned it at all.



    In this particular case tho I believe the bold text that was questioned actually means that others contributing to the standard agree to make the IP royalty free too. If not then Apple reserves the right to ask for a royalty or not contribute to the standard.



    FWIW it's appeared to me that Apple has been the one trying to change the accepted rules and not cross-license their own applicable patents when negotiating FRAND royalties. Good to see them take the initiative on this one.
  • Reply 15 of 51
    Quote:
    Originally Posted by I am a Zither Zather Zuzz View Post


    So that again brings up the question of the amount of royalties that others will need to give up in order to use the new size card that Apple is proposing.



    Who holds the current patents? How valuable are they?



    In practice, presumably this means that handset manufacturers who do not own any patents at all can license Apple's patents on Apple's terms -- for free -- and license all other patent holders' patents at the rate that the other patent holders see fit.



    On the other hand, handset manufacturers who also happen to hold relevant patents would need to either also give them away for free, or else separately negotiate with Apple to find a mutually agreeable price to license Apple's technology, and vice-versa.



    This outcome, if adopted, would constitute a perfect example of the principle of reciprocity at work.
  • Reply 16 of 51
    gatorguygatorguy Posts: 24,278member
    Quote:
    Originally Posted by I am a Zither Zather Zuzz View Post


    There is no current expectation that patent holders will contribute their work for free.



    Only partially true. Cross-licensing the patents that apply to the FRAND-encumbered licensed IP is expected within the industry. Apple has apparently tried to avoid that, which was part of the problem with Nokia last year. To settle the suit Apple did finally cave and agree to some IP cross-licensing with them. They'll likely agree to the same with Motorola at some point IMO. But the IP that Apple or anyone else agrees to share isn't free. The value of IP that a company licenses back is considered when royalties are negotiated on the standards package.
  • Reply 17 of 51
    drdoppiodrdoppio Posts: 1,132member
    There is a reasonable suspicion that one or more of the involved companies have ulterior motifs, since this technology seems to fix something that isn't broken.



    Let's hope that it will be for the benefit of the end user. If not, we can always refuse to buy any devices using the new standard, right?
  • Reply 18 of 51
    Quote:
    Originally Posted by Gatorguy View Post


    . But the IP that Apple or anyone else agrees to share isn't free. The value of IP that a company licenses back is considered when royalties are negotiated on the standards package.



    Here, though, apple is proposing royalty-free licenses, in exchange for others to give away their licenses for free? Is that right?



    So how valuable is Apple's size patent compared to the technical patents held by others?
  • Reply 19 of 51
    milkmagemilkmage Posts: 152member
    Quote:
    Originally Posted by I am a Zither Zather Zuzz View Post


    I wonder what FRAND encumbered SIM card patents currently exist? I wonder how much companies are currently asking and getting for royalties?



    Is Apple offering something that nobody wants, in exchange for getting currently valuable patents for free?



    if I owned the FRAND patent on the blue thing, people pay me for using it... Apple's proposing a red thing. Who's going to pay me for the blue thing if everyone has switched to red and Apple licenses red for free.



    and it's not like "nobody wants it" - "Apple has the support of "most of the European operators", according to the FT."
  • Reply 20 of 51
    Quote:
    Originally Posted by milkmage View Post


    if I owned the FRAND patent on the blue thing, people pay me for using it... Apple's proposing a red thing. Who's going to pay me for the blue thing if everyone has switched to red and Apple licenses red for free.






    Presumably, Apple would need lots of patents owned by others in order for anybody to use the red thing.



    The question that keeps nagging me is how much the current royalties are, and whether they are more valuable than Apple's potential royalties on a new size?



    ISTM that if Apple's patent were valuable, and the other patents were not so valuable, Apple would not offer their tech for free. If Apple's proposal makes sense for Apple, then they would be getting more than they give. How much more?



    And which companies currently own the most valuable SIM patents? Nokia? Motorola?
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