Hello all,
For those who have been reading this column for a while, you know I often distinguish between what I call “retail licensing” and “wholesale licensing.” The retail side is where individual inventors and small patent owners try — often heroically and just as often in vain — to convince large implementers to take a license to their patents. A politely worded demand letter goes out, a politely worded rejection comes back (if anything comes back at all), and the patent owner is left with a stark choice — sue a company fifty times its size, or go home. It’s a bit like showing up to a poker game with your lunch money while the other side has a Bloomberg terminal and a team of lawyers who bill more per hour than you earn in a week.
On the wholesale side, you have the heavy hitters — Nokia, Ericsson, Qualcomm, Huawei, InterDigital — companies that have spent billions on R&D, contributed heavily to global standards, and built massive portfolios of standard essential patents (SEPs). These are the players who can afford to go toe-to-toe with anyone. And yet, increasingly, many of them are choosing not to go it alone. Instead, they are pooling their patents — literally — into collective licensing platforms. The question is: why would anyone with that kind of firepower voluntarily share the battlefield?
As usual, while I focus on the macro picture in this newsletter, I want to remind everyone that we track everything happening in this world. For those who need their regular dose of news, you can follow me on LinkedIn, where I post almost daily about the most newsworthy events. If you want to catch up on what grabbed my attention in recent weeks, you can access all my posts directly here.
Happy reading!
Louis
__________________
Tangible IP News
Louis Carbonneau will be speaking at IPWatchdog LIVE in Arlington, Virginia on March 22, 2026. Gene and Renée Quinn always put together a great event, and this year should be no different.
With a few more deals in closing, look for additional announcements in the coming weeks.
__________________
Featured Portfolio
Tangible IP is pleased to represent PlugShare LLC, in the divestiture of their 17 patent assets across four families each with a pending US Continuation in the electrical vehicle charging domain. This portfolio forms a cohesive suite of innovations centered on intelligent EV charging ecosystems including technologies of integrating vehicle-grid interaction, route optimization with inclusion of charging stations, payment interoperability, and home energy balancing.
Please reach out to erika@tangibleip.biz to receive the materials.
__________________
Navigating Patent Pools
As I mentioned earlier, I draw a sharp distinction between what I call “retail licensing” and “wholesale licensing.” Retail licensing is the familiar David-versus-Goliath scenario: individual inventors and small patent owners attempting — often courageously, and often unsuccessfully — to persuade large implementers to take a license. The Goliaths of the world often resort to another option: patent pools.
What Exactly Is a Patent Pool?
A patent pool is a collective licensing mechanism where multiple patent holders contribute their SEPs into a single platform, which then offers implementers a one-stop-shop license covering all contributed patents. Think of it as a buffet rather than ordering à la carte: one license, one fee, coverage for thousands of patents from dozens of owners. No individual negotiations, no separate invoices, no wondering if you missed someone about to serve you with a complaint in the Eastern District of Texas.
The best-known example today is Avanci, which started in 2016 with connected vehicles and has since expanded into IoT, broadcast (ATSC 3.0), and video streaming. Its 4G Vehicle program alone has licensed more than 130 million vehicles from over 80 automakers. Its 5G Vehicle program launched in August 2023 with 58 licensors on board, including Huawei, Qualcomm, Ericsson, Nokia, Samsung, and InterDigital. Mercedes-Benz was the first licensee (because of course it was). Sisvel is another major pool administrator, running programs for Wi-Fi, cellular IoT, smart grid, and audio/video codecs. And MPEG LA has been doing this since the 1990s — arguably the granddaddy of them all.
The model: the pool administrator evaluates contributed patents for essentiality using independent third-party evaluators, sets a single royalty rate offered on FRAND terms, then collects and distributes revenues based on each owner’s contribution. Simple, right? (If only.)
How Do Patent Pools Divide the Pie?
This is where things get more opaque, as you might expect when large sums are divided among parties with very different-sized portfolios. The methodology varies, but generally involves: the number of patents independently confirmed as essential, the geographic breadth of those families (20 jurisdictions beats one), and sometimes a quality factor. Avanci uses a “definitional approach” — the license covers all essential patent claims of its licensors, whether individually evaluated or not. Allocation then relies on independently verified patents weighted across the membership.
Net/net: more confirmed essential patents with broader coverage means a bigger slice. It is not a perfect science — critics argue these methodologies can undercount smaller contributors — but it has been transparent enough to attract the biggest telecom names and the blessing of the U.S. Department of Justice’s Antitrust Division. When the DOJ tells you your licensing mechanism is pro-competitive, that is about as close to a gold star as this industry gets.
Why Are the Big Players Jumping In?
Here is where I want to challenge my own premise — because intellectual honesty matters more than a catchy headline.
Large SEP holders have not abandoned bilateral licensing. Nokia, Ericsson, and Qualcomm still run massive bilateral programs for smartphones and other high-value devices where per-unit economics justify the effort. And there is one major advantage to going it alone: when you license bilaterally outside a pool, you are not necessarily bound by FRAND obligations — unless you have made such a commitment through a standards development organization. That freedom to set your own terms and play hardball is something the big players are not eager to give up where they have leverage.
Where pools have really come into their own is in new device categories where licensing infrastructure does not yet exist — connected cars, smart meters, EV chargers, IoT sensors, broadcast equipment. These are markets where implementers are often not legacy telecom companies (they are automakers and appliance manufacturers who until recently thought “SEP” was something you did on a dance floor), per-unit values are low, and the sheer number of manufacturers makes bilateral licensing about as practical as herding cats across a six-lane highway. Imagine Nokia negotiating individually with every smart meter manufacturer in Southeast Asia. The transaction costs alone would eat the royalties alive.
So pools are not replacing bilateral licensing — they are filling the gap in markets where it is economically unworkable. You contribute your patents once, the pool handles licensing and collection, and you receive revenue from markets you might never have reached otherwise. It is passive income from industries that would otherwise go entirely unlicensed — which describes most of the IoT world today.
The other driver is litigation fatigue. Even for well-funded SEP owners, global enforcement is expensive and unpredictable. Courts in different jurisdictions reach wildly different FRAND conclusions (I sometimes wonder if they are reading the same standard), and implementers have mastered delay tactics. Pools short-circuit this with a pre-set, publicly available rate that courts generally view favorably. When Avanci says 80–85% of connected vehicles worldwide are under its license, that adoption rate speaks for itself.
Can Small Patent Owners Join the Party?
This is the question I get asked most at Tangible IP. The short answer: technically, yes — practically, it depends. Most pools require at least one patent independently confirmed as essential. Avanci requires a claim chart accepted by an independent evaluator. If one claim is found essential, you are in.
But here is the catch. If you bring five or ten essential patents to a pool covering tens of thousands, your royalty share will be correspondingly modest. You are not going to retire to Tulum when splitting proceeds alongside Nokia and Qualcomm.
That said, you are going to get paid — which is more than many small SEP holders can say when they try bilateral licensing and get stonewalled by implementers who know a company with a $50,000 legal budget cannot sustain multi-jurisdictional litigation.
Patent pools democratize access to licensing revenues, but they do not equalize it. For an inventor or SME sitting on a handful of legitimately essential patents, it may be the best deal in town — certainly better than sending demand letters into the void.
Why Are Implementers Actually Paying?
After years of implementers treating patent licensing as something to be avoided or litigated into oblivion, pools are actually succeeding at getting companies to pay willingly. The reason: certainty and efficiency. One license, one known per-unit fee, and you clear the vast majority of the SEP stack — without negotiating with dozens of individual holders, each with their own terms and their own view of what “reasonable” means. For an automaker juggling thousands of suppliers and hundreds of regulatory requirements, the appeal is obvious. The alternative — a cascade of individual lawsuits, each carrying injunction risk — is a business risk no competent board would tolerate.
And when 80% of your competitors are already licensed, being the holdout is not a good look — not with your investors, and certainly not with courts. Nothing says “unwilling licensee” quite like being the last automaker standing without a deal.
The Bottom Line
Patent pools are not without critics. Some implementers argue that rates are excessive, governance lacks transparency, and aggregation gives pools outsized leverage. These concerns deserve scrutiny.
But the market is voting with its feet. The proliferation of pool programs — and the growing list of licensors and licensees signing on — suggests pools are solving a real problem that bilateral licensing could not. For large SEP holders, pools offer scalable monetization across fragmented markets. For small patent owners, they offer access to revenues otherwise completely out of reach. And for implementers, they offer predictability, simplicity, and the ability to budget for IP costs without fearing the next process server at the door.
Make no mistake: the patent pool model is no longer just an alternative licensing channel. For a growing number of industries, it is becoming the primary one. Whether that is a good thing depends on where you sit — but either way, the train has left the station.
Stay tuned.
Other Recent IP Developments
The Patent Tax That Wasn’t: Lutnick Backs Down
Remember the panic when reports surfaced last summer that Commerce Secretary Howard Lutnick was considering a “value-based patent tax” — charging holders 1%–5% of their patents’ estimated value? You can exhale. During a Senate Appropriations Subcommittee hearing on February 10, Senator Chris Coons pressed Lutnick, and the Secretary’s response was definitive: “That is not a plan. That is not going anywhere.” He conceded that the USPTO attempting to value individual patents would be unworkable — a point the entire IP community had been screaming for months. Coons agreed, calling it “a completely unworkable proposal.” For once, bipartisan consensus on IP.
The collective sigh of relief is justified. Patents are not real estate; their value swings wildly based on litigation outcomes, market shifts, and whether the claims survive their first encounter with the PTAB. Good riddance to this one — though some voices continue to argue that the fee structure needs modernization, just not this kind.
The UPC Is No Longer an Experiment — It’s a Juggernaut
For those still wondering whether the Unified Patent Court would amount to anything, the numbers are in. According to JUVE Patent, the UPC received 239 new infringement cases in 2025 — a 54% increase over the prior year. Total caseload reached 796 cases by year-end, with 158 appeals. Based on Bird & Bird’s analysis, just over 50% of infringement actions resulted in the patent being found valid and infringed, and roughly 65% of preliminary injunction applications were granted. For a court that did not exist three years ago, those are not just respectable numbers — they are the kind of trajectory that keeps national court judges wondering where their docket went.
Early 2026 has only reinforced the trend. Broadcom has emerged as the most prolific UPC litigant of the year, filing against Hyundai, Nissan, and Deutsche Telekom, settling with Telefónica, and — most dramatically — winning a Germany-wide SEP injunction against Renault on February 5. The Munich I Regional Court banned sales of Renault’s Clio and Mégane models across Germany over an Ethernet SEP, finding Broadcom’s royalty demand within the FRAND range and Renault’s counteroffer “clearly infra-FRAND.” That is the kind of ruling that concentrates minds in boardrooms from Stuttgart to Seoul. Meanwhile, the UPC’s Mannheim Local Division warned Amazon in writing to stop interfering in a pending InterDigital FRAND case — signaling this court is not shy about asserting cross-border authority.
For patent owners, the UPC is fast becoming the most attractive enforcement venue in Europe — fast timelines, pan-European reach across 18 member states, and meaningful injunctive relief. For implementers, the message is clear: ignoring European SEP obligations is no longer viable. As I have often said, nothing accelerates a licensing negotiation like the prospect of an injunction in a major market. The UPC is delivering exactly that.
Danaher Swallows Masimo for $9.9 Billion — Mid-Fight With Apple
In a deal that caught many by surprise, life sciences giant Danaher announced on February 17 that it will acquire Masimo Corporation for $9.9 billion in cash. For those following the Masimo vs. Apple patent battle — and if you haven’t, you have been missing one of the more entertaining IP grudge matches in recent memory — this adds a fascinating dimension.
Masimo has been locked in litigation with Apple over pulse oximetry technology in the Apple Watch, a dispute featuring an ITC exclusion order, a $634 million jury verdict in Masimo’s favor (on appeal), and Masimo’s colorful accusation last year that the Trump Administration cut a deal with Apple to undermine the ITC’s findings. Masimo’s shares jumped over 34% on the news. The question now is whether Danaher — with $24.6 billion in annual revenue and significantly deeper pockets — will prosecute the Apple litigation with the same fervor, or whether this becomes a catalyst for settlement. Either way, it is a reminder that the most consequential IP deals sometimes happen outside the courtroom while everyone is watching what is happening inside it.