Car Manufacturers Agree to Pay Patent Licenses from 51 Technology Companies to Avanci

JAKARTA - More than a dozen car manufacturers in the world, including Toyota and Nissan, have registered with the platform for patent licenses from 51 technology companies. This is aimed at simplifying access to wireless technology and avoiding costly legal battles.

The legal conflict stems in part from differing views among automakers, suppliers and technology companies over who should bear the licensing fees.

Through Avanci's independent licensing marketplace, the automaker gains access to patents for 2G, 3G and 4G technologies 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 USD 20 per car. This amount has increased this month from the previous USD 15, which was distributed among patent holders.

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

This model allows automakers to avoid the battles over royalties that take place between smartphone makers like Apple and Samsung and telecommunications companies, which negotiate one-on-one for their licenses.

"The auto market is too fragmented to make it feasible for patent owners to negotiate with each player," said the industry source, who declined to be named because of the contract agreement. "It's a matter of efficiency."

Mercedes-Benz, later Daimler, ended a years-long dispute over the use of its patents last year with Nokia after being forced to pay royalties.

Volkswagen was also sued by Acer for using its 4G technology without the appropriate permission. The automaker in March also signed a contract with Avanci, which includes Acer's patents, to complete it.

While suppliers have historically paid for licensing patents in areas such as engine design, according to auto industry sources with experience negotiating licenses, tech companies prefer to deal directly with automakers rather than telecommunications patents.

"Usually suppliers handle 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 the company on a new contract to cover 5G patents, which will likely cost more than the current patent portfolio.