How technology standards power new entrants and market opportunities

Oct 2024/ Posted By: Liren Chen, President and CEO, InterDigital

Open and collaborative technology standards such as 5G, Wi-Fi and advanced video compression, which are underpinned by related standard essential patents (SEPs), are the cornerstone of today’s connected world. These standards bring significant benefits but, above all, they provide new market entrants with access to ready-made technologies that open up new market opportunities and decrease the barriers to entry in hypercompetitive markets, which benefits billions of consumers worldwide.
One of the defining trends of the smartphone market over the last 15 years has been the emergence of a group of Chinese device manufacturers who now dominate smartphone manufacturing, holding seven out of the top ten positions, globally.
Where once the top ten was populated by manufacturers from the U.S. and Europe, it is now China that leads the way with many of the country’s OEMs dominating the top ten alongside Apple and Samsung.
I would argue that the success of Honor, Huawei, Oppo, Vivo, Xiaomi, and, more recently, Transsion, is not simply down to their ability to bring great handsets to market but also because of the very clear benefits they derive from standardized technologies.
Take Xiaomi for example, which has emerged over the last decade as one of the top-three global smartphone players and the manufacturer of a growing range of connected devices.
Fortunately for Xiaomi it has not had to invest hundreds of millions or even billions of dollars in R&D to develop its own version of Wi-Fi or 4G and 5G before it could bring a handset to market. Xiaomi combines cutting-edge product design with savvy marketing and competitive pricing to challenge the likes of Apple and Samsung.
Thanks to the decades of research that have gone into each generation of cellular wireless and because of the open, global standards system, 4G and 5G technology is readily available for a manufacturer like Xiaomi. This means that Xiaomi, and future new entrants like it, can focus on what they do best – offering consumers the latest cellular technology at attractive prices.
Through its journey into the smartphone big leagues, Xiaomi has trod a familiar path. Almost all of today’s major players have emerged relatively rapidly over the last 20 years and have taken market share from incumbents like Nokia, Sony, Ericsson, and Blackberry. We have also seen the likes of Huawei and ZTE emerge as some of the leading contributors to standards, becoming significant owners of SEPs in areas like 5G.
Without global standards, developed by engineers at companies like InterDigital, these rapid market changes would not have been possible. This is particularly worth noting given that this week we celebrate World Standards Day.
It’s not just in the smartphone space where companies like Xiaomi benefit from standards. In consumer electronics, where Xiaomi is a top TV vendor, it also benefits from standards such as Wi-Fi and advanced video compression like the HEVC standard. In automotive, where Xiaomi made a splash earlier this year with its first electric vehicle, it can also benefit from cellular technologies as cars become more and more like “smartphones on wheels.”
So, as Xiaomi’s experiences demonstrate, standards not only power new market entrants, they also enable incumbents in sectors such as smartphones, to develop new connected devices in other verticals that use the same standardized technologies.
While much attention is focused on cellular and the latest 5G standard, video technologies are only becoming more important as we continue to consume a growing amount of video and we see the proliferation of streaming services. Without advanced video compression such as the HEVC standard, modern networks would not be able to cope with the sheer volume of video data that is transmitted every day.
Thanks to the same kind of open global standards system that has given us 5G, device manufacturers, such as Xiaomi, and streaming companies, can benefit from a suite of video codecs without plowing billions of dollars into their own R&D.
On average it takes around ten years for a standard to move from the initial stages of research to the rollout of early network infrastructure and for the first consumer devices to implement the new standard. Engineers from companies such as InterDigital play a central role in standards development but there is no guarantee that our engineers’ innovations will be incorporated into a standard like 5G.
I know that our engineers are some of the best in the world at predicting and anticipating where innovation in cellular or video is headed, but we don’t get it right 100% of the time. It’s only by filing for patent protection on our technologies, that we can have some assurance that we can recoup a fair and reasonable return on our inventions by licensing our patents to implementers. This enables us to continue to make risky long-term investments in R&D for the next generation of technology.
Each year we invest around half of our recurring revenue into R&D and portfolio development, and we pride ourselves on the quality of our innovation and the depth and strength of our patent portfolio. In recent reports LexisNexis has ranked our 5G and video portfolios among the top-five worldwide when ranked on both quantity and quality. Without our commitment and the commitment of other standards researchers, companies such as Xiaomi may not be able to rapidly gain market share in such a competitive market.
That is why the balance between innovators and implementers is so important to ensure that we continue to invest in standards-based technologies and that consumers benefit from a range of more sophisticated devices. The important role of standards in driving today’s connected world is worth remembering, particularly as we celebrate World Standards Day.

Delivering tangible results for this year’s World IP Day

Apr 2024/ Posted By: Liren Chen, President and CEO, InterDigital

This week we’re marking both Earth Day and World IP Day. The latter this year is focused on the world’s efforts to reach the United Nations’ Sustainable Development Goals (SDGs) by 2030, which means that both days provide an opportunity to stop and reflect on how we’re working towards a more sustainable future.

Intangible assets, including intellectual property, have become the most important drivers of the world’s economy. IP has formed the foundation of the defining shift in many countries over the last 50 years as they have moved from manufacturing-based to knowledge-based economies. According to one analysis, intangible assets now account for 90% of the market value of the S&P 500 – up from 80% in 2015 and 17% in 1975.

These assets, including patents, trademarks, trade secrets and copyrighted works, not only add value to existing businesses but also provide inventors and creators with the incentives to keep innovating and, in the process, to further economic development and tackle some of the most serious challenges that the world faces.

As well as focusing on humanity’s efforts to fight climate change, the SDGs cover a range of challenges that we face, including improving health and education, lifting more people out of poverty, and fighting the effects of climate change. Unfortunately, there is still work to be done if we want to hit these goals by 2030; one recent study shows that we’re on track on just 15% of the SDGs.

But we should also recognize that innovation, supported by the incentives and protections provided by IP, have a crucial role to play if we are to have a realistic chance of reaching these goals by 2030.

As Darren Tang, the Director General of the World Intellectual Property Organization wrote recently, “To deliver [on the SDGs], we need to harness the innovation and creative potential of humankind, with intellectual property critical to making this happen. IP incentivizes innovation, rewards creativity and brings new technologies, ideas and concepts to the market.”

At InterDigital we combine a passion for innovation with a long history of changing the way that people connect. More than half of our employees are engineers, more than 90% of whom hold advanced degrees and are named inventors.

Through our research in wireless, advanced video and AI, and through our support of an open, collaborative system for the development of global standards such as 5G, we’re passionate supporters of innovation’s power to open up new opportunities around economic development, improve human life, and fight some of the most challenging threats that we face, such as climate change.

In our Video Lab we have a dedicated team of world leaders in energy aware media. Part of their work is focused on how we can mitigate the energy impact of the billions of hours that people spend streaming video content. At Mobile World Congress earlier this year we showcased a technology that uses AI to lower the energy consumption of a TV or video display without any significant loss in picture quality.

We have also played a leading role in global standards organizations, such as the International Telecommunications Union (ITU), in ensuring that energy consumption and sustainability are considered in the development of technology standards.

Last year a report from LexisNexis recognized our leadership in sustainable innovation and included InterDigital among the top 100 companies whose patented innovations are most focused on SDG-relevant technologies.

As we continue our more than 50-year history of foundational research, licensing our patent portfolio to implementers enables us to keep investing in the kind of research and technology leadership that can play a part in guiding us to a more sustainable future. This would simply not be possible without robust IP protections around the world.

So, it should be of concern that some parts of the world do not clearly recognize the role IP plays in supporting innovation and, in some cases, are taking steps to diminish IP rights, particularly around standardized technologies. This is a clear mistake.

In a global economy that is increasingly driven by intangible assets, we need fair and balanced IP systems to help deliver tangible results in fighting some of the gravest challenges we face.

Unlocking the Sustainable Power of Standards

Oct 2023/ Posted By: Liren Chen, President and CEO, InterDigital

World Standards Day on October 14th gives us plenty of opportunity to celebrate the many benefits of technology standards such as 5G. Standards enable interoperability between devices; they allow product manufacturers to benefit from considerable economies of scale; they ensure there is a high level of safety and reliability in technologies; and they give R&D specialists an opportunity to focus on their strengths in developing foundational innovation while OEMs can focus on making great devices.
However, with sustainability a big focus for World Standards Day, I would argue that the benefits that standards bring to the global efforts to work towards a more sustainable world, particularly in terms of economic development and climate change, are not well understood.
In many parts of North America, Europe and Asia, we often take for granted the kind of connectivity that we have enjoyed from 1G all the way through to today’s 5G and from every version of the WiFi standard. But, in other, less economically advanced regions, connectivity can help change people’s lives by giving them access to much-needed services.
According to the GSMA’s <a href="https://www.gsma.com/betterfuture/resources/2023-mobile-industry-impact-report-summary"> 2023 Mobile Industry Impact Report</a>, 1.5 billion of the world’s poorest people use mobile internet, 2.3 billion use mobile to access educational information for themselves or their children, and 2.6 billion use mobile financial services.
None of this would be possible without the foundational innovation and standards development that companies like InterDigital carry out and which connects our devices to global 5G, WiFi and other networks.
But standards don’t just drive sustainable development by enabling economic growth and opening up new opportunities for underserved communities. They can also make a significant contribution to lowering energy usage in many of the smartphones, consumer electronics devices and other connected products that we use today.
Some key stakeholders have recognized the role that standards can play. For instance, as part of its <a href="https://single-market-economy.ec.europa.eu/single-market/european-standards/standardisation-policy/standardisation-strategy_en#:~:text=The%20strategy%20proposes%20a%20series,democratic%20values%20in%20technology%20applications.">standardization strategy</a>, the European Commission has highlighted the importance of standards in supporting the continent’s substantial investments in its transition to a greener society.
At InterDigital, our engineers are acutely aware of the need for more sustainable innovation as we face the challenges of a warming planet and I am proud of our leadership in the development of more energy efficient technologies.
For example, in recent years, engineers from our video research lab led an effort to ensure that energy consumption is considered when distributing video content. While the impact of the full digital video distribution chain is mainly driven by consumers, it is important for InterDigital to take a lead in educating the wider video ecosystem.
This is why our engineers initiated work in high-level standards such as ITU, ATSC, DVB as well as more technical standards such as MPEG. At the International Telecommunication Union (ITU) we have contributed to reports and recommendations in the areas of video and program production. In MPEG we have led the MPEG green effort for transmitting information all along the video chain to make energy reduction feasible. Our engineers have also developed Pixel Value Reduction (PVR) solutions which can help reduce the energy consumption of video screens by intelligently optimizing pixel brightness for screens.
Our leadership has not gone unnoticed. Earlier this year InterDigital was <a href="https://ir.interdigital.com/news-events/press-releases/news-details/2023/InterDigital-named-one-of-the-Top-100-leaders-in-sustainable-innovation/default.aspx">recognized</a> by LexisNexis as one of the top 100 companies whose innovation is helping progress towards achieving the United Nations’ Sustainable Development Goals (SDGs).
By making considerations such as energy usage a key part of the standards development process, we can make a powerful impact on the tech industry’s and the world’s broader sustainability targets. I would also argue that a company like InterDigital, one that is purely focused on research and not biased by trying to advance technologies for the benefit of a specific product, plays a particularly important role in ensuring that standards are developed with sustainability firmly in mind.
But it is also clear that more needs to be done. The GSMA’s report shows that the mobile industry’s contributions to achieving the United Nations’ Sustainable Development Goals by 2030 became stalled in 2022. The lingering effects of the COVID-19 pandemic, the war in Ukraine, and other developments have halted progress, according to the GSMA.
Mobile is just one part of the standards-based ecosystem but the wireless space is an excellent example of where innovation can contribute to hitting sustainability targets.
That is why I firmly believe that now more than ever, stakeholders should do all they can to protect and promote global, standardized technologies. If we are to fully meet the very grave sustainability challenges that we face, then the kind of collaborative, consensus-based innovation which characterizes standards development, surely offers one of the best paths forward.
We don’t have time to waste.

Recognizing the power of role models on this World IP Day

Apr 2023/ Posted By: Liren Chen, President and CEO, InterDigital

Today we mark World Intellectual Property Day, an important moment to reflect on the importance of strong IP protections in the modern innovation economy. At InterDigital we know better than most businesses about the crucial role that intellectual property, especially patents, can play in the success of a company, and our broader ecosystem as a whole.
In many ways, our patents are the products that we take to market. They are the culmination of years of painstaking research by our engineers which provides benefits to billions of consumers thanks to the way our innovation delivers new experiences in wireless and video.
This World IP Day’s theme of “Women and IP: accelerating innovation and creativity” also gives us an opportunity to explain why more must be done to increase the number of female innovators and bolster the number of women who contribute to and benefit from the global IP ecosystem.
It is clear that our industry is still falling short. According to a March 2021 <a href="https://www.wipo.int/women-and-ip/en/news/2021/news_0002.html#:~:text=In%202020%2C%20women%20inventors%20filed%20international%20patent%20applications,and%20third%20highest%20shares%20%2817.4%25%20and%2016.5%25%20respectively%29.">report</a> by the World Intellectual Property Organization (WIPO), only 16.5% of inventors named on international patent applications in 2020 were women. While the proportion has steadily increased compared to previous years, progress is slow: at current rates, gender parity will not be achieved until 2058.
In the United States, the picture is no better: a recent <a href="https://www.uspto.gov/sites/default/files/documents/oce-women-patentees-report.pdf">report</a> from the U.S. Patent and Trademark Office (USPTO) found that women made up just 13% of all inventor-patentees in the United States. The report cited research that, if women were to patent at the same rate as men, commercialized patents could increase by 24% and per capita GDP by 2.7%.
To maximize the potential of IP and innovation, more needs to be done to promote diversity throughout the innovation ecosystem. This will require a big effort throughout all facets of society, from supporting women to engage in and study STEM subjects at school and college, to being open-minded in recruitment and promotion, and overcoming economic obstacles to career progression.
At InterDigital, we recognize the importance of having a diverse workforce in helping us to stay at the forefront of developing cutting edge technology in wireless and video. This helps to promote equal opportunities and it also enhances research by bringing new perspectives to technical challenges.
According to our latest data, 28% of our submitted invention disclosures include a named female inventor, as did 34% of our live patents and applications. While these figures put InterDigital ahead of market trends - according to a 2020 USPTO <a href="https://www.uspto.gov/ip-policy/economic-research/publications/reports/progress-potential">report</a> 21.9% of US patents included at least one female inventor - we recognize there is still a long way to go to reach gender parity.
As USPTO Director Kathi Vidal has <a href="https://www.uspto.gov/about-us/news-updates/latest-uspto-report-finds-32-increase-number-us-counties-where-women-patented">made clear</a>, increasing the number of women inventors on patents is “critical for job growth and economic prosperity.” I couldn’t agree more, and I applaud Director Vidal for the leadership she has shown in this area.
We also know the importance that role models play in encouraging women and underrepresented groups to pursue careers in industries that suffer from a lack of diversity. As the activist Marian Wright Adelman said, “you can’t be what you cannot see.” That’s why, this week, as we mark World IP Day, we’re highlighting several of our female engineers and innovators from our world-class research and innovation team who are helping to shape what is possible for the future.
These outstanding women, Diana Pani and Catalina Mladin from our wireless lab and Valerie Allie and Gaëlle Martin-Cocher from our video lab, are respected innovators who are recognized by their colleagues and industry peers as leaders in their respective fields. But their impact is even greater by the example that they set for other women to follow as they consider careers in engineering.
We know that more needs to be done to grow diversity in IP, but we should also take this opportunity to celebrate our role models and the trails that they have blazed for so many more brilliant, innovative minds to follow.

E Pluribus Unum – How Standards Drive the World Around Us

Oct 2022/ Posted By: Liren Chen, President and CEO, InterDigital

As we mark this year’s <a href="https://www.worldstandardsday.org/home.html">World Standards Day</a>, it is worth celebrating the crucial role standards play in facilitating the global spread of advanced technologies and new devices while continually laying the groundwork for what comes next. By ensuring interoperability, standards provide the bedrock for entire technology ecosystems, on top of which trillions of dollars of economic activity might be built.
The importance of standards is only growing. We are sitting on the cusp of a fourth industrial revolution during which we expect to see rapid advances in the digitalization of broad swaths of the global economy from manufacturing to healthcare, and from transportation to energy. This shift will be enabled in large part by the ongoing advances being made in the standardized technologies in cellular wireless, WiFi, and in video.
At a time of heightened geopolitical tensions, it is also worth stressing that standards are a byword for global cooperation. Companies, academia, and other stakeholders cooperate with each other at the technical level in order to advance the best solutions for each design requirement. This process is highly competitive and only the best advances make the grade.
Of course, participants are not just participating for personal glory. Standards thrive because of commercial incentives and the promise of advancing existing markets or developing new ones. That’s true for device manufacturers but also for those companies that invest heavily in associated R&D, engage in the standards process, and then license their related standard essential patents to OEMs.
At InterDigital we have been carrying out scientific research in standards-based connected technologies on a commercial basis for the majority of our 50-year existence. Many of our engineers have held leadership positions in various SDOs and our years of research have helped us build a portfolio of more than 28,000 patents. Today the company is recognized as one of the principal contributors to standards in a broad range of connected technologies.
InterDigital's business model is built on investment in foundational scientific research, active participation in standards development organizations worldwide, and the licensing of the company’s innovation to companies that implement this tech in their devices, such as smartphones, laptops and TVs.
Recently this work has been given even greater significance as governments around the world have emphasized the importance of standardized technologies.
In the U.S., the Director of the U.S. Patent and Trademark Office (USPTO), Kathi Vidal, has been leading the charge in pushing American companies to be more closely involved in standards development. Recently she <a href="https://www.uspto.gov/blog/director/entry/advancing-u-s-interests-abroad?utm_campaign=subscriptioncenter&utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=">wrote</a> that the U.S. must, “Continue to encourage U.S. participation in standard-setting organizations and the efficient and effective adoption of those technologies by our industries, as part of our efforts to promote innovation in the standards space and drive sustainable, long-term growth in the U.S. economy.”
I couldn’t agree more. And to put that long-term growth into perspective, according to a recent <a href="https://www.interdigital.com/white_papers/state-of-5g-report-enabling-the-boundless-generation">report</a> from ABI Research, 5G is forecast to create $7 trillion in economic value in 2030 alone.
As a U.S. headquartered company, we at InterDigital understand the importance that standards can play in a country’s economic resilience. But we also appreciate that standards contribute the most to the world economy when they are global in scope and collaborative by nature. On this World Standards Day that is a message that’s worth reiterating.

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