Daily Management Review

Automakers Battle Patent Obstacles To Advance In-Car Technology


Automakers Battle Patent Obstacles To Advance In-Car Technology
A platform for patent licenses from 51 tech companies has over a dozen automakers, including Toyota and Nissan, signed up with the goal of streamlining access to wireless technology and avoiding pricey legal disputes.
Different opinions among automakers, suppliers, and tech companies about who should pay for licensing have contributed to conflicts.
Carmakers can access 2G, 3G, and 4G patents from companies like Finland's Nokia, Sweden's Ericcson, and Taiwan's Acer for everything from navigation systems to sensors for automated driving through the independent licensing marketplace Avanci.
Avanci charges a flat fee of $20 per car—up from $15 last month—with the proceeds going to the patent holders.
According to Avanci Vice President Mark Durrant, 80-85% of vehicles with 2G technology or higher are licensed through the platform as a result of the new signings, which also include Renault, Stellantis, and Honda.
The model enables automakers to avoid the royalties disputes that occurred between telecoms companies and smartphone manufacturers like Apple and Samsung, who bargain one-on-one for licenses.
"The auto market is just too splintered for it to be worth it for patent owners to negotiate with each individual player," said an industry source, who declined to be named because of contractual agreements. "It's a matter of efficiency.
Last year, Mercedes-Benz, then Daimler, and Nokia reached a settlement following a protracted legal battle over the use of their respective patents.
Acer filed a lawsuit against Volkswagen for utilizing its 4G technology without a valid license. In order to settle, the automaker signed a contract with Avanci in March that covers Acer's patents.
According to an auto industry source with experience in licensing negotiations, tech companies would rather work directly with carmakers over telecoms patents even though suppliers have historically paid for patent licences in fields like engine design.
"Usually suppliers handle patents in the development process – telecoms is the one area where they don't," the person, who declined to be named, said.
Avanci is also collaborating with businesses on a new contract that would likely cost more than the current patent portfolio to cover 5G patents.