Getting Up to Speed on 5G—A Brand Owner’s Guide

Brand owners should expect some changes with the rollout of the fifth generation of cellular wireless technology—or 5G. 5G is engineered to greatly increase the speed and responsiveness of wireless networks. With substantially higher download and upload speeds, lower latency, and more connection density, the 5G revolution is expected to generate a variety of new applications (apps), uses, and business cases.

Just as the introduction of 4G led to the creation of entirely new industries and companies, like transportation network companies (ride-sharing), the advent of 5G represents the next wave of opportunities, not least for brand owners, in an ever more connected world.

5G’s Potential Impact on Consumer Behavior

While consumers may generally embrace 5G’s promises of higher speeds and otherwise enhanced capabilities, what does this really mean and how does it impact individuals and organizations?

A look back at 5G’s predecessors may help shed some light on what consumers could see:

• 1G made phones mobile for a small group of early adopters in the analog world of the 1980s;
• A decade later, the digital wireless capabilities of 2G increased voice capacity and began delivering mobile services to the masses;
• 3G surfaced in the early 2000s, advancing mobile data capabilities; and
• Another decade later, 4G emerged with higher speeds that stimulated a new era of mobile technologies.

With this evolution, smartphones became mainstream and monumentally changed the way consumers interact with mobile devices. To illustrate this scale, Newzoo’s 2020 Global Mobile Market Report reveals there were more than 900 million smartphone users in China, more than 400 million in India, and more than 250 million in the United States. Smartphone adoption has risen notably in just over the past decade. For example, according to a study by the Pew Research Center, the share of Americans who own a smartphone increased from 35 percent in 2011 to 85 percent in 2021. Alongside the widespread uses of smartphones came the influx of mobile apps offering experiences and tools/services for photos, videos, social media, ride-share services, games, dating, e-commerce, and more.

The impact of 4G on consumer behavior is significant and may suggest that many consumers are more inclined to embrace new digital experiences and more connectivity to people and devices with the arrival of 5G and its even further enhanced capabilities. Consumers are still showing an appetite for more emerging technology built on the foundation set by 4G’s capabilities, and 5G brings forth many opportunities for further innovation. For example, more consumers may adopt augmented reality and virtual reality experiences with the increased availability of 5G mobile technology, although its capacity to fully support the fast-developing metaverse is yet to be seen. In addition, smart home devices may be more reliable and thus desirable for consumers seeking better access to video or other data from their homes through mobile devices running on 5G networks.

Another area that could see significant developments with 5G technology is the autonomous vehicle industry as demonstrated by the numerous companies invested in pushing the self-driving car market forward. As consumers have adapted to and empowered innovation tied to 4G and its predecessors, various industries have embraced the demand for more products and services that were unimaginable without the connectivity technology of the times.

In essence, 5G allows a network meant to connect practically everyone and everything. This can mean connecting new industries and creating new consumer experiences. Thus, consumers may also expect more regarding data privacy and product reliability from companies that provide products and services in this space. These companies are also brand owners and, as in any other industry, rely on consumers’ positive associations with their brands and products/services to build goodwill.

What Does This Mean for Brand Owners?

While the interplay between intellectual property (IP) and 5G is constantly evolving, brand owners should consider some key issues when engaging with 5G technology.

IP Enforcement

One obvious aspect of IP enforcement in this area is the ability of owners of patents in relation to 5G technology to enforce their rights against entities who use 5G technology without seeking a proper license. Licensing mechanisms for 5G technology may differ from industry to industry. While in the smartphone industry it may be easier to identify patent holders for 5G technology, and consequently seek a license, in other industries such as an Internet of Things (IoT) industry it may not be so easy. According to the Oxford Dictionary, the IoT is “the interconnection, via the Internet of computing devices embedded in everyday objects, enabling them to send and receive data.” In an IoT industry, for example, identifying the correct patent holder or licensor may not be so straightforward.

Patents connected to 5G technology will also, in all probability, qualify as standard essential patents (SEPs). A SEP is a type of patent which claims an invention that must be used to conform to a technical standard. This raises questions and concerns around FRAND principles (fair, reasonable, and non-discriminatory royalty rates) for SEPs for 5G technology. It is almost impossible to have a one-size-fits-all approach to licensing issues around 5G technology, which only seems to raise more questions. Brand owners seeking licenses to use 5G technology may be well advised to carry out their appropriate due diligence in identifying the patents involved and their holders of the patent, and, thereafter, engaging with the patent holder on the terms of license and royalty rates.

Companies also have a real concern when it comes to 5G technology about keeping trade secrets safe and preventing data theft. How does this affect brand owners? The concern arises when more and more devices are added to the 5G network, thereby enabling other 5G vendors to gain access to data.

For example, a company on the 5G network was able to illegally obtain more than 100,000 files, including source codes, software, algorithms, and manuals, from a company in another country. This resulted in a three-year protracted litigation for the brand owner engaging against the company that stole the data. Actions like this are often done to duplicate the technology and confuse consumers into thinking that the product or service originates from the third-party company. It also diverts sales to the third-party company and can result in significant losses for a brand owner.

Many countries do not have suitable generic laws governing data theft, which also affects IP enforcement. Brand owners, therefore, should ensure they have adequate mechanisms in place to prevent theft of their valuable trade secrets and data.

The need for more and stronger IP protection and enforcement capabilities for brands and content may be another implication of innovation, particularly in a more connected world. With more interconnected devices and continuous product developments, 5G may further complicate matters for brand owners, not only from a cybersecurity standpoint but also from a counterfeiting and piracy perspective.

False Advertising Claims

In a few recent instances, brands engaged in doing business with 5G technology have made claims regarding their 5G services, which have been challenged for misleading consumers.

In essence, a brand owner should be careful not to make false advertising claims about the use of 5G with its products. For example, a brand owner was accused of allegedly making misleading and deceptive claims about the speed and coverage of its 5G network in its advertisements. See Verizon Communications, Inc. (T-Mobile 5G), NAD Case No. 6991 (Oct. 2021). One of the claims was that the 5G service was widely available throughout a country when, in fact, its range was limited and was also easily blocked. The same company also made inaccurate representations about the speed of its 5G network.

The lesson here is that while brands may promote and market the speed, coverage, and efficiency their 5G-enabled services provide, they should be careful to ensure that any claim or statement they make is accurate and capable of being substantiated. Consumer watchdogs around the world, and indeed business rivals as well, have been proactive in holding brand owners accountable for misleading claims and statements regarding their 5G services.

Another aspect of advertising that brand owners need to be careful about is to not denigrate the 5G services of a competitor. Brand owners should be careful in crafting their claims and statements of their 5G services, ensuring there is empirical backing for them.

Brand Reputation

The issues and challenges discussed above highlight the importance of the reputation carried by a brand in the market.

A company should be particular in its branding surrounding the promotion of 5G. The trademark should not allude to the fact that the 5G aspect of the product provides standards which the product cannot meet. If a company is forced to stop using such branding, this can shake consumer confidence in a brand.

A brand owner that can secure its trade secrets and data, and stave off cyberattacks, will be able to enhance and augment its business and reputation. Customers and vendors are bound to ask serious questions of owners that either have had data stolen, made misleading claims regarding their 5G services, or get embroiled in licensing disputes.

Consumers and brand owners alike may benefit from embracing the 5G revolution and recognizing how the array of enhanced technological capabilities is poised to elevate experiences with the digital world. With the unprecedented connectivity of people and things, 5G’s development presents both opportunities and challenges, but perhaps also signals a future of at least worrying less about being wireless.

Although every effort has been made to verify the accuracy of this article, readers are urged to check independently on matters of specific concern or interest. 

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