Automakers tackle patent hurdle in search of in-car tech

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By Victoria Waldersee and Supantha Mukherjee

STOCKHOLM/BERLIN (Reuters) – More than a dozen automakers, including Toyota and Nissan, have signed up to a patent licensing platform from 51 technology companies, aiming to simplify access to wireless technology and avoid costly legal battles.

Conflicts stem in part from differing views of automakers, suppliers and technology companies about who should bear the licensing costs.

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

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Avanci charges a flat fee of $20 per car, increased this month from $15 earlier, with the money divided among patent holders. The new additions – which also include Renault, Stellantis and Honda – mean that 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 royalties battle that took place between smartphone makers such as Apple and Samsung and telecom companies, who negotiate licenses one-on-one. “The auto market is just too fragmented to be worth the effort for patent holders to negotiate with each individual player,” said an industry source, who declined to be named due to contractual agreements. “It’s a matter of efficiency.

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Mercedes-Benz, then Daimler, ended a years-long dispute over the use of patents with Nokia last year after it was eventually forced to pay. Volkswagen was sued by Acer for using its 4G technology without the proper license. The automaker signed with Avanci, which covers Acer’s patents, in March to reach a settlement.

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

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“Usually suppliers handle patents in the development process – telecom 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.

(Reporting by Victoria Waldersee and Supantha Mukherjee; editing by Emelia Sithole-Matarise)

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