How the introduction of “Always Connected” computers gives LTE-centric patent owners more room to run

“… the introduction of Always Connected computers will only serve to increase the available target set and potential damages for LTE-centric monetization activities.”

 by: Adam Saxon | June 15, 2018

Since the Long-Term Evolution (LTE) standard was finalized and commercially adopted almost a decade ago, there has been no shortage of patent infringement cases brought worldwide involving accusations by the patent owner that some product device–in most cases a mobile phone, but sometimes a cellular base station as well–infringes the asserted patent through the device’s use of LTE communication protocols and functionality.  These infringement cases have been brought by operating companies against other operating companies (often the parties being a who’s who of global telecom players, e.g. Blackberry’s 2017 infringement case filed against Nokia in Delaware) as well as by non-practicing entities (NPEs) against operating companies (this latter list of cases being too numerous to summarily recount).

Though almost all of these infringement cases accused mobile phones, the infringement allegations almost never touched traditional computer products (e.g. laptops).  This is likely about to change, however, with the introduction of “Always Connected” (Microsoft’s marketing term) laptops that, for the first time in mass production, incorporate a LTE cellular modem that will allow the laptop to maintain “always on” LTE connectivity (just like the LTE mobile phones that we are all familiar with).  Microsoft believes that adding LTE connectivity to laptops (and similar form factor devices) is a big deal–just last week the International Business Times reported that a Microsoft executive in China told an audience that he “expects LTE to eventually become an integral part of notebook computers.”  To this point, Qualcomm is working hand-in-hand with Microsoft to push “Always Connected” computers, with Qualcomm having recently announced the Snapdragon 850 platform, which is a version of its current flagship system on a chip for mobile devices (the Snapdragon 845) that will only be used for Always Connected computers.

This is all very good news for owners of patents that read on certain LTE functionality, as the introduction of Always Connected computers will only serve to increase the available target set and potential damages for LTE-centric monetization activities.  This is especially true with respect to device companies that manufacture both LTE mobile phones as well as the new Always Connected computers (such as, for example, Samsung and ASUS, the latter having recently announced its new NovaGo Always Connected laptop).  Moreover, since the Always Connected computer is a new product category that is being positioned to take advantage of the approaching rollout of 5G cellular services, Always Connected computer devices will only become more prevalent in the coming years, with products from all of the traditional computer makers (as of this writing, ASUS, HP, Lenovo, and Microsoft have all announced new Always Connected laptop models that already are or will be available in 2018).  Another benefit the Always Connected computer product category offers plaintiffs asserting LTE-centric patents is that such plaintiffs can attempt to apportion a greater share of implicated product device revenues when formulating plaintiff’s damages case.  For example, whereas consumers may base a traditional (non-LTE) laptop purchasing decision on CPU performance, the amount of RAM installed, and the computer’s display properties, going forward consumers interested in purchasing an “Always Connected” computer will now have to consider the type of LTE modem used by the computer, and that consideration may weigh quite heavily depending on how the consumer intends to use the Always Connected computer.  The greater the importance that a consumer places on the Always Connected computer’s LTE modem, the better that is for the plaintiff bringing a LTE-centric assertion against a manufacturer of said computer.

The developments discussed above will likely result in the Always Connected computer manufacturers being faced with two situations.  First, device companies that manufacture both LTE mobile phones (and tablets) as well as the new Always Connected computers (e.g. Samsung and ASUS, to use the examples from above) will have to deal with more of their products being accused (i.e. laptops, as well as phones) when facing LTE-centric patent infringement lawsuits.  While these defendant companies will likely defend the technical merits of the case in the same manner relative to both their accused phone and laptop products, as discussed above the defendant’s damages exposure will be higher due to the inclusion of the accused Always Connected computers in the case.  On the other hand, device companies that do not traditionally manufacture LTE mobile phones, but will manufacture Always Connected computers (e.g. HP and Lenovo) will now have to contend with LTE-centric patent lawsuits, something which these companies may not have had to deal with previously.

Though the predictions above may not be generally observable until 2019, at which time more Always Connected computers will have been introduced and the sales performance of such computers during the 2018 holiday season can be observed, it does not take great imagination to understand the significant monetization opportunity that the introduction of Always Connected computers presents to owners of LTE-centric patents.

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