Automakers face a patent hurdle when looking for in-car technologies

A view of cars on the road during rush hour traffic, California government officials are expected to introduce a plan to ban the sale of new gasoline-powered cars by 2035, local media reported in San Francisco, California, U.S., Aug. 24, 2022. REUTERS/Carlos Barria

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STOCKHOLM/BERLIN, Sept 21 (Reuters) – More than a dozen automakers, including Toyota ( 7203.T ) and Nissan ( 7201.T ), have signed a platform to license patents from 51 technology companies, aiming to ease access to wireless technology. And avoid costly legal disputes.

Conflicts stem in part from differing views among car manufacturers, suppliers and technology companies over who should bear the costs of licensing.

At independent licensing marketplace Avanci, carmakers get patents for 2G, 3G and 4G technology from companies such as Finland’s Nokia ( NOKIA.HE ), Sweden’s Ericsson ( ERICb.ST ) and Taiwan’s Acer ( 2353.TW ) to everything from navigation systems. Sensors for automatic driving.

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Avanchi charges $20 per car, up from $15 earlier this month, with the money split between patent owners.

The new signings — which include Renault ( RENA.PA ), Stellantis ( STLA.MI ) and Honda ( 7267.T ) — mean 80-85% of cars with 2G technology or more are licensed on the platform, Avanci vice president Marc Durant said in an interview. Lai said.

The model allows automakers such as Apple ( AAPL.O ) and Samsung ( 005930.KS ) and telecom companies to avoid battles over royalties that are negotiated one-on-one for licenses.

“The auto market is so fragmented that it’s not worth it for patent holders to negotiate with every player,” said one industry source, who did not want to be named because of contractual agreements. “It’s a matter of efficiency.

Mercedes-Benz ( MBGn.DE ), then Daimler, ended a years-long dispute with Nokia last year after it was finally forced to settle a patent dispute.

Volkswagen ( VOWG_p.DE ) has been sued by Acer ( 2353.TW ) for using 4G technology without a license. The automaker signed a deal with Avanci in March to cover Acer’s patents. Read more

While suppliers have historically paid for patents in areas such as engine design, tech companies prefer to deal directly with automakers on telecom patents, according to an auto industry source with experience in licensing negotiations.

“Usually vendors take ownership of the development process – that’s one area where telecoms don’t,” said the person, who did not want to be named.

Avanchi is working with companies on new contracts to cover 5G patents, which will likely be more valuable than its current patent portfolio.

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Reporting by Victoria Waldersee and Supanta Mukherjee; Editing by Emelia Sithole-Matarise

Our Standards: The Thomson Reuters Trust Principles.

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