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New licensing model seeks to eliminate IP suits

Posted: 23 Jan 2008     Print Version  Bookmark and Share

Keywords:IP usage  licensing model  online store 

Some big names in semiconductors are trying out a new licensing model that, if successful, promises to cut costs, expand market offerings and bring more openness to one of the electronics industry's most litigious sectors.

Starting this week, designers at chip and systems houses will be able to access valuable semiconductor intellectual property via a revamped online marketplace offered by IPextreme Inc., a specialist in the distribution of semiconductor IP to SoC designers. Freescale is making a version of its ColdFire core available on the online outlet, and a handful of others have cores listed on the site or have deals in the works with IPextreme.

Price, usage bickering
While IP licensing is as old as the industry itself, IPextreme hopes its approach will do away with third-party negotiations and backroom bickering over usage terms and pricing that have characterised the business.

The company also aims to reduce, if not eliminate, skirmishes over IP usage violations, which all too frequently land the warring parties in the courts, said Warren Savage, CEO at IPextreme.

"IPextreme handles all of the legal paperwork associated with these transactions; that is one of the values we offer the customer," Savage said. "It takes the industry to a level of having legal contracts that are fairly well proven."

IPextreme's online marketplace, dubbed the Core Store, looks to turn the IP licensing process on its head by offering an open system that is visible and equitable to all players. Vendors that work with the Core Store offer their IP to all interested parties for a fixed price, without having to conduct further negotiations or work through middlemen.

In a coup for the nascent service, Freescale Semiconductor Inc. has agreed to make its ColdFire V1 core available for licensing to other industry players through the Core Store. The transaction builds on an earlier deal with IPextreme, which last year won the rights to assist Freescale in marketing the ColdFire V2 through the traditional sales outlets.

'Most viable' model
Freescale is looking to attract new customers in emerging medical and consumer electronics markets while moving existing customers upward to its 32bit architecture from its 8-bitters, said David Niewolny, product launch marketing manager. The chip vendor considered the Core Store outlet the most viable and competitive IP licensing model for advancing its market push, he said.

For a fixed rate of Rs.3.95 lakh ($10,000) per single user?the highest currently charged on the Core Store?systems designers across a range of industry segments will be able to tap the ColdFire V1 for products including PC peripherals, hospital beds, electric wheelchairs, lighting control systems, bar code scanners and printers, security systems, access control panels, laboratory equipment, building and HVAC controls, and networking products.

Such IP would typically be made available to the market at Rs.39.48 lakh ($100,000) to Rs.1.18 crore ($300,000), Niewolny told EE Times.

"We are offering Cold-Fire at a very aggressive price point and at a significant reduction in the up-front NRE [nonrecurring engineering] cost," he said. "IPextreme is introducing a revolutionary way to purchase IP, and this enables Freescale to introduce our entry-level 32bit core into the marketplace at a very disruptive price. We are expecting to attract new customers, and that is the basis for lowering the price point."

Freescale "would love to move into consumer-type applications where cost is a concern," Niewolny added. "We see the IPextreme pricing model allowing us to break into this market. And you will be seeing many other partnerships between Freescale and IPextreme."

Tier clients
Cypress, Infineon and National Semiconductor also plan to feature IP on the Core Store, and Motorola Inc. is on board through one of its research divisions, IPextreme's Savage said.

"We have two other major semiconductor announcements lined up for the first quarter," he said. "We are focused on differentiated, proprietary types of IP that are just not available in the third-party IP market."

As attractive as the concept sounds, only a limited number of companies have signed on thus far, and many of those are offering tested but lower-end cores rather than their top-of-the-line IP.

Additionally, the IP suppliers are not directly involved in the licensing process and therefore have little to contribute in the form of additional design support to buyers of their products. It's a no-frills service.

- Bolaji Ojo
EE Times

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