Benchmarking the royalty rates for Sisvel’s POS patent pool
Data shows that POS devices with cellular capabilities command a premium and Sisvel’s pool rates fall within FRAND range
By Donald Chan
While a number of deals and disputes in the POS space have surfaced since 2024, no publicly disclosed POS royalty rates have yet emerged – whether from an announced licence or a court ruling.
This information gap is a contrast to product verticals (such as smartphones) and technologies (such as video codecs or Wi-Fi) in which SEP licensing is more established. The lack of public data points poses a challenge to both licensors and licensees attempting to navigate this market.
The formation of a POS patent pool is a significant step forward. Like all patent pools that adhere to transparency best practices, the Sisvel POS programme is helping to reduce information asymmetry in the market by making a large share of the relevant SEPs available through a transparent price structure.
To recap the pool’s progress so far:
In April we announced the programme with Huawei, LG Electronics and Nokia as founding licensors, inviting all interested cellular SEP owners to participate
The total number of licensors swelled to 44 over the next three months, and independent SEP data indicates that over 50% of cellular SEP families are now available via the pool licence
Two weeks ago, we published the royalty rates for the pool, as well as the template agreement setting out the full terms and conditions
Today, we have taken the further step of publishing a royalty analysis that contextualises the announced rates and situates them within a range of court-determined FRAND rates for cellular. The document is available here.
Here are a few highlights from the report’s findings:
POS devices are sold at a wide variety of price points.
Not all POS devices have cellular capabilities – but businesses pay a premium for those that do. Across the entire category, the average price difference between cellular and non-cellular models is 14%. For the POS sub-categories most geared towards mobility, the average price premium is up to 20%.
Our royalty tiers span four categories of POS devices. These do not map precisely onto the categories used in available POS market data – but an imperfect approximation allows us to estimate the aggregate royalty burden implied by our rates. For the lowest royalty tier (€1.20), this is 2.9%. For the highest royalty tier (€8.00), it is 6.6%.
The aggregate royalty burdens implied by each of our rate tiers – both in absolute and ad valorem terms – fall inside the range of values deemed FRAND in established court precedents for cellular technology.
Having published and explained our pool terms, we are now focused on bringing this offer to implementers. We hope our rate structure serves as a useful data point for all stakeholders in this market, whether or not they opt to pursue a pool licence.
Donald Chan is Director, FRAND & Royalties at Sisvel
