Automakers tackle patent hurdle in pursuit of automotive technology

The conflicts stemmed in part from differing views among automakers, suppliers and technology firms about who should bear the costs of the licenses.

More than a dozen automakers, including Toyota and Nissan, have signed up to a platform for patent licenses from 51 technology companies in a bid to simplify access to wireless technology and avoid costly legal battles.

The conflicts stemmed in part from differing views among automakers, suppliers and technology firms about who should bear the costs of the licenses.

Through Avanci’s independent licensing marketplace, automakers gain access to 2G, 3G and 4G technology patents from Finland’s Nokia, Sweden’s Ericcson and Taiwan’s Acer for everything from navigation systems to sensors for automated driving.

Avanci charges a flat fee of $20 per car, up from $15 previously this month, with the money split among patent holders.

The new signings — which also include Renault, Stellantis and Honda — mean 80-85% of cars with 2G technology or higher are licensed through the platform, Avanci vice president Mark Durrant said in an interview.

The model allows automakers to avoid the royalty battles that have taken place between smartphone makers such as Apple and Samsung and telecommunications companies, which negotiate licenses one-on-one.

“The auto market is too fragmented for it to be worthwhile for patent holders to deal with each individual player,” said an industry source, who declined to be named because of contractual agreements. “It’s a matter of efficiency.

Mercedes-Benz, then Daimler, ended a years-long dispute over the use of the patent with Nokia last year after it was eventually forced to pay.

Volkswagen has been sued by Acer for using its 4G technology without a license. In March, the automaker signed a deal with Avanci, which covers Acer’s patents, to get even.

While suppliers have historically paid for patent licenses in areas such as engine design, technology firms would prefer to deal directly with automakers over telecommunications patents, according to an auto industry source with experience in licensing negotiations.

“Vendors usually deal with patents in the development process – telecommunications is the only area where they don’t,” said the person, who declined to be named.

Avanci is also working with companies on a new contract to cover 5G patents, which would likely be more expensive than the current patent portfolio.