STOCKHOLM/BERLIN – More than a dozen automobilemakers, including Toyota and Nissan (OTC NSANY ), signed up for a platform that allows patent licences to be issued by 51 tech companies. This platform aims to make wireless technology more accessible and to avoid expensive legal battles.
Conflicts resulted in part from differences among suppliers, carmakers, and tech companies over who should pay for licensing.
Independent licensing marketplace Avanci allows carmakers to access patents for 2G/3G and 4G technology from companies like Nokia in Finland (NYSE: NOK), Ericcson in Sweden, and Acer in Taiwan. This includes everything from navigation systems and sensors for automated driving.
Related: According to the Nikkei, Aplpe intends to use TSMC’s latest chip technology in its iPhones and Macs.
Avanci charges $20 per car for a flat fee, up from $15 previously. The money is divided among patent holders. In an interview, Mark Durrant, Avanci vice-president, stated that the new signings also include Honda (EPA: RENA), Stellantis and Honda. This means that 80-85% of 2G-technology cars are licensed through Avanci.
This model avoids the royalties battles that occurred between smartphone manufacturers such as Apple (NASDAQ : AAPL), Samsung (KS : 005930), and telecoms companies. These companies negotiate one-on-1 for licenses. According to an industry source, “The auto market is too fragmented for it to make sense for patent owners to negotiate individually with each player.” It’s all about efficiency.
Mercedes-Benz, then Daimler (OTC DDAIF), settled a long-running dispute with Nokia over its patent use in the last year. After being forced to pay, Acer sued Volkswagen (ETR VOWG_p), for using its 4G technology in a way that was not permitted by the licence. Avanci was the company that signed the March contract with Volkswagen (ETR:a data-pairid=”22402″ href=”https://www.investing.com/equities/volkswagen-vz”>VOWG_p) to settle a lawsuit by Acer for using its 4G technology without obtaining the appropriate licence.
According to an industry source, while suppliers have paid historically for patent licences in areas such as engine design, tech companies would prefer to deal directly with carmakers rather than telecoms patents.
Related: 5G technology will be available in Pakistan next year
The person who refused to be identified said that suppliers usually handle patents during the development process, but telecoms is one area in which they don’t. Avanci is currently working with companies to create a contract that covers 5G patents. This would likely be more costly than the existing patent portfolio.
