Carrier Grade Standard Essential 4G Patents on the Open Market

Raze Technologies, formerly WestEnd Broadband, Inc., was founded in late 1999 with the purpose of developing a last mile access system that would allow service providers to offer both broadband data and high quality, fully featured voice services to residential and small business customers. The result was the development of a turnkey, end-to-end, carrier-class, and scalable platform. It was capable of terminating voice and data traffic and their associated protocols at a center office, and provided all the necessary transport and remote management capabilities to the customer’s premises.

In August 2002, Raze suspended its development operations and focused its remaining resources on the prosecution of its patent portfolio. Over time, as most if not all of the other innovative start-ups in the space have gone the way of the dinosaur, Raze has managed to accumulate a foundationally important patent portfolio relating to standard-related innovations surrounding mobile network infrastructure technologies that relate to 4G/LTE, which is the next generation wireless standard. Indeed, one of Raze’s seminal innovations related to the use of 2 tiered wireless networks with a broadband connection to a WiFi connection in order to increase building penetration and the utility of service. These concepts are among those patented by Raze and are today known as mobile hotspots and tethering.

The Raze 4G/LTE patent portfolio, which includes patents having priority filing dates all the way back to April 2001, is currently for sale and could well fetch a handsome sum even given downward pressure in the market created by some unfortunate recent Supreme Court decisions (more on this later). The sale is being brokered by ICAP Patent Brokerage via a private sale.

Mobile Data Explosion

Many forecasts relating to mobile data usage will discuss what is known as the mobile data apocalypse, which refers to the outrageous growth seen with respect to global mobile data traffic. According to Cisco’s Global Mobile Data Traffic Forecast Update, 2013-2018, global mobile data traffic grew by 81 percent in 2013, reaching 1.5 exabytes per month by the end of 2013, which is up from 820 petabytes per month at the end of 2012. Perhaps even more staggering is the fact that during 2013 there were some 526 million mobile devices and connections added.

Not surprisingly, smartphones accounted for most of the new account additions, contributing 77 percent of the growth, or in real numbers 406 million net smartphone account additions in 2013. Given the power and popularity of smartphones, people are downloading content in unparalleled volumes, which is putting significant stress on networks worldwide. In fact, I have frequently noticed myself that when I am in the San Francisco area, networks are so clogged at times that a smartphone is practically useless.

But the Cisco forecast doesn’t see any lessening in popularity or demand over the near term. According to the report: “By the end of 2014, the number of mobile-connected devices will exceed the number of people on earth, and by 2018 there will be nearly 1.4 mobile devices per capita.”

As more and more users flock to bandwidth-consuming applications such as YouTube and Netflix, operators will continually be searching for technologies to stay ahead of the ever growing demand. Undoubtedly, 4G will be a big part of that solution. Again, according to the Cisco report: “By 2018, 4G will be 15 percent of connections, but 51 percent of total traffic. By 2018, a 4G connection will generate 6 times more traffic on average than a non-4G connection.”

In it’s conclusion, the Cisco report explains: “The next 5 years are projected to provide unabated mobile video adoption despite uncertain macroeconomic conditions in many parts of the world. Backhaul capacity must increase so mobile broadband, data access, and video services can effectively support consumer usage trends and keep mobile infrastructure costs in check.”

In a nutshell, the Raze patents should be extremely attractive because they embody technologies that will have to be relied upon to provide a solution to the significantly increasing level of data consumption. Moreover, the patent technologies (discussed more below) represent innovations currently being adopted in the U.S. and used extensively throughout the world.

Inside Raze Technologies

Skip Hynek, an early investor in Raze Technologies and later joined the company as CEO, shared with me some of the frustrations, perils and pitfalls that are so common with a start-up technology company in a sector where there are a number of dominant companies who no longer innovation. “There are companies that are making billions and billions of dollars on technologies they didn’t invent at all.” Hynek was referring to the fact that early on in the development of 4G the innovation was driven by smaller technology companies, which is typically the case. Sadly, the larger companies typically bully smaller companies and push them out. “I can’t think of one smaller technology company that benefitted, “ Hynek said.

Most, if not all, of those other early stage innovative start-up companies that were pushing the big companies on the research and development side are all gone. The Raze Technology patent portfolio is one of the few in this space that remains available, and one that touches on core aspects of the wireless and wireline communications networks currently forming the basis for 4G/LTE, including smartphone, handsets, infrastructure, wireless networking products and mobile service providers in the mobile telecommunications market. In short, this portfolio covers standards-essential patents and other fundamental solutions currently employed in the mobile marketplace today.

“I was personally there when the technology was being developed,” Hynek explained. “I started as an outside Director, but when we structured the company I came in as CEO and I was there 14 to 20 hours a day, 7 days a week, 365 days a year, even Christmas.” Hynek explained that this level of dedication was commonplace throughout the company, and that Raze was fortunate to have a dedicated team who worked for pennies compared to what they could have made at larger companies.

In fact, as this home grown technology was being put together Hynek told me that it was a daily event to watch a line of cars lining up in the evening, coming to say goodnight. “They would go out and spend 15 minutes with their kids, come back in and work until 1 or 2am, and then be back at it first thing in the morning.”

According to Hynek, the unique thing that his dedicated team at Raze was working on was the development of the first wireless, cost-effective solution to provide broadband data and toll quality voice, which means they wanted to provide a seamless integration to what people had grown accustomed to and expected when using a land line. “At the time people weren’t all the interest in acquiring data, what was critical was to obtain a bundle that included high quality voice,” Hynek explained. “We knew we needed to provide both voice and data from the get go. It had to be scalable, reliable and redundant.”

The Patents

This 4G/LTE patent portfolio includes 18 issued U.S. patents and another 4 pending U.S. patent applications. Broadly speaking, these patents are applicable to several technology areas with the next generation wireless and wireline technologies, particularly wide-area networks, narrow-area networks and cellular traffic to network offloading. The patents have no encumbrances, have never been licensed and have all commonly owned by Raze Technologies since the development of the underlying innovations.

The patent assets owned by Raze can be broken down into several different categories:

1. Air interface encompassing the physical RF interface, access mechanism, routing within the network. (U.S. Patents 6,804,527, 6,859,655, 6,891,810 and 7,173,916)
2. Supporting quality of service (QoS) and prioritization of traffic including critical voice calls (such as 911 service) and service level commitments. (U.S. Patents 7,031,738, 7,035,241, 7,274,946 and RE42242)
3. Additional system capabilities to extend rage, improve coverage, and increase capacity, which cover beam forming, mobile hotspots and tethering. (U.S. Patents 6,947,477, 7,075,967, 7,230,931 and 7,346,347)
4. System design including edge routing and a grooming aggregation point that was used to effectively work with the Internet connection but also to filter and terminate a number of extraneous broadcast data packets that can and would be terminated ahead of the wireless network, which is now included in all 4G base station systems. (U.S. Patent No. 6,564,051)
5. Hardware configuration and design, innovations that were designed to protect the hot swap and redundancy capability built into the system. (U.S. Patents 6,925,516, 7,002,929, 7,065,098, 7,069,047 and 7,099,383)

What About Alice?

Whenever any high-tech patent or portfolio comes up for sale, or will be litigated, any prudent due diligence would consider whether the Supreme Court’s recent decision in Alice v. CLS Bank would mean that the claims obtained are likely invalid and, therefore, the patent not attractive for purchase. If you take the time to look at the patents listed above and review the claims you will find that these assets overwhelmingly cover hardware. There are several patents with method and systems claims, but the bulk of the claims obtained by Raze relate to various defined apparatus’, such as a time division duplex (TDD) frame transmission synchronization apparatus (for example see the ‘929 patent), or an apparatus for interconnecting a plurality of communications mediums (for example see the ‘051 patent), or an apparatus for facilitating radio communication with a mobile state (for example see the ‘347 patent) or a profile-creating apparatus (for example see the ‘477 patent).

Furthermore, the way the majority of the claims are drafted the preamble should be easily able to overcome any abstract idea challenges because the claims are specifically tailored to a particular implementation. For example, in the ‘655 patent, claim 1 starts: “For use in a wireless access network, a TDD FDD system comprising…” In another example, in the ‘967 patent, claim 1 starts: “For use in a base station (BS) of a fixed wireless network capable of communicating with a plurality of subscriber transceivers via time division duplex (TDD) channels, a BS transceiver comprising…”

Given the fact that the vast majority of the claims in this portfolio are directed to devices, which are a category of invention specifically mentioned in 35 U.S.C. 101, and further given the specific context limitations, there seems little risk that these claims would be found to be patent ineligible even under the most expansive reading of Alice.

Additional Information

Anyone interested in the Raze patent portfolio can contact Michelle Tyler of ICAP Patent Brokerage at (650) 741-4117 or via email at [email protected].