July 13, 2022
Avanci, a patent pool focusing on the automotive and Internet of Things (IoT) space, said this week it plans to increase prices for its 2G, 3G and 4G licenses from $15 to $20 per vehicle starting in September. The move essentially represents a call to action to the other half of the global automotive industry that doesn't currently subscribe to Avanci's pool.
Avanci's announcement comes at a critical time in the global market for cellular patent licensing. First, Avanci itself has pledged to add 5G connected car options to its pool at some point in the future. But company officials suggested that such licenses ought to cost extra.
Figure 1: (Source: Rhea Eason/Alamy Stock Photo)
"As our rates are based on the value which the licensed technology brings to the vehicle, and 5G delivers significant benefits for drivers and OEMs [original equipment manufacturers], there will be a difference for 5G," Mark Durrant, VP of marketing and communications at Avanci, told patent-monitoring publication JUVE Patent.
A changing space
Beyond Avanci, the patent licensing landscape in the cellular industry is undergoing significant upheaval. In recent months, Via Licensing announced it will shutter its wireless patent pool, which stretched from 3G to 5G, after roughly a decade of work. The move leaves Sisvel as the last big remaining patent pool in the cellular industry.
Sisvel plans to release the details of its own 5G pooling plans by September.
Separately, the new Alium patent pool launched earlier this year in pursuit of roughly 100,000 essential patents for open RAN technologies. In June, the group announced that Acer, AT&T, Comcast, Meta, SK Telecom and Verizon are the companies that will contribute patents to its pool.
Meanwhile, massive 5G patent holders like Nokia and Ericsson are working to assert their licensing rates against some of the market's biggest phone makers. And they're making progress. For example, in recent days Nokia managed to convince a German court to ban the sale of Oppo smartphones in that country. And, separately, Ericsson managed to convince a Colombian court to ban the sale of Apple phones in that country.
To be clear, patent-licensing rates are subject to a wide variety of factors. For example, both Ericsson and Nokia believe they are owed several dollars for every 5G phone sold. Meantime, Avanci has been charging $15 per vehicle since the pool launched in 2016.
Of course, the differences between Avanci's $15 and the $5 Ericsson is pursuing from Apple are significant. Avanci's $15 offers a license for patents held by a large group of players, from Qualcomm to Ericsson to Nokia to, most recently, LG Electronics. But a direct license with Ericsson only covers that single company's patents.
So why does Avanci believe it should raise prices, particularly amid inflation and a looming economic recession? As Foss Patents noted, Avanci has made significant progress – both in terms of participating license holders and licensees ‐ since it first launched. Meaning, it's providing more value today than when it inked a deal with BMW in 2017. Further, Avanci has hardened its position through courtroom battles involving some of its participants.
"What I wouldn't doubt for a second is that 49 bilateral licenses [for Avanci] would end up costing more than the pool license, even more so if transaction and potential litigation expenses are factored in," according to Foss Patents.
However, it's unclear how Avanci might move into a 5G future; the company is planning to release its 5G program at some unspecified point in the future. Already many 2G and 3G networks are sunsetting, leaving only 4G patents relevant to its automotive customers. And though 5G networks are rolling out across the world, the 5G patent landscape remains under debate. It's still unclear which company commands a leading position in 5G patent ownership.
With patents, Nokia and Ericsson batter phone makers with sales bans Can Sisvel bring unity to the 5G patent landscape? Open RAN vendors cautious on Alium patent pool — Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano
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