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Automotive industry complaints on mobile communications patents

September 17, 2020

The integration of cellular mobile communication technology in today’s cars is causing several disputes between the automotive industry and companies holding patents based on such cellular mobile communication technology.

Those disputes have their origin in the way those patents should be licensed.

On the one hand, some of those patents are considered standard essential patents (“SEP”), and some companies license their patents through a collective licensing platform, Avanci, which offers licenses to multiple SEP patent portfolios from various owners.

Most of the major European car brands signed up to the Avanci program, but others, such as Daimler, declined to deal with SEP licensing themselves, preferring SEP owners to deal directly with their suppliers of components incorporating the technology. Daimler is involved in numerous lawsuits with Nokia, since the latter refuses to license the suppliers’ products directly. Nokia recently won one of those lawsuits in a German court, where the court said it had to side with Nokia because Daimler was unwilling to comply with the existing rules for SEPs. Daimler expressed its intention to appeal the decision.

On the other hand, in the United States, earlier this month, a federal appeals court reversed a lower-court decision against Qualcomm, which makes technology for connecting devices to mobile data networks, such as chips for 5G communications. The court also vacated an injunction that would have required Qualcomm to change its patent licensing practices, based on said, now reversed, lower-court decision which stated that Qualcomm’s practice of requiring phone makers to sign a patent license agreement before selling them chips “strangled competition” and harmed consumers.

Automakers have increasingly put such chips in vehicles to connect them to the internet. Companies had previously argued that connected cars prices could go up if Qualcomm won its case.

A group of those companies, tech companies and automakers, including Intel, Tesla, Ford, Honda and Daimler, urged the U.S. Federal Trade Commission (FTC) to seek an “en banc” rehearing of the case by the full appeals court. “If allowed to stand, the panel’s decision could destabilize the standards ecosystem by encouraging the abuse of market power acquired through collaborative standard-setting” the group said.

This fight between the automotive industry and owners of mobile communications patents is likely to have several future battles, the results of which will demarcate and stipulate more clearly who and how in the automobile manufacturing chain will have to pay for the licenses of those patents.

Article by Joaquim Ferrer.

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