Avanci launches 5G standard-essential patent licensing program for the automotive industry

On August 16, 2023, the first patent pool for the next generation of connected vehicles capable of using 5G (“Avanci 5G Vehicle“) was launched.

With a significant number of 58 standard-essential patent (SEP) holders among the possible licensors since the launch, the program aims to simplify the licensing stage for the thousands of technologies required for the defined technical standard, so that companies in the segment are regularized, with just one license, to launch and operate these new products in the era of the Internet of Things (IoT).

The patents for 4G, 3G and 2G, as well as C-V2X (“Cellular vehicle-to-everything”)[i], which allows vehicles to communicate directly with cyclists, pedestrians, transport infrastructure and other vehicles, are also already included. Other licensors and SEPs may join the pool over the years.

As an illustration of the potential of the segment, the Avanci 4G Vehicle program has already been responsible for licensing more than 130 million vehicles from more than 80 companies[ii]. For 5G, the outlook of Roger Lanctot, director of Automotive Connected Mobility at TechInsights, is that “the share of 5G connected vehicles will grow to over 50% of new vehicle production in 5 years’ time“.

In Brazil, 227,900 vehicles were produced in May 2023 – 10.7% more than in May last year[iii]. Although the figures do not refer to connected vehicles, the statistic illustrates the strength of the Brazilian car industry and the prospect of exponential growth in this market as the technology becomes increasingly popular.

To encourage rapid adherence to the new pool and boost this forecast, Avanci has released a discounted early licensee price (US$29.00 per vehicle) for those who obtain a license before the sale of 5G connected vehicles begins or, in cases where sales are already taking place, until February 16, 2024. After these dates, the license fee will be US$32.00 per vehicle. For the Avanci 4G Vehicle, the current broader license costs US$20.00 per vehicle.

According to Avanci, the license obtained by a manufacturer will already allow its suppliers to research, develop and produce components that incorporate the technologies covered by the patents, without the need to obtain new licenses. Mercedes-Benz has already stepped forward and was the first company to license the Avanci 5G Vehicle. Among the licensors are Huawei, Qualcomm, Ericsson, Nokia, InterDigital, Samsung, LG and China Telecom, which is not among the holders in the 4G pool.

Avanci reinforces its commitment to the FRAND terms and shows confidence in the fair, reasonable and non-discriminatory conditions for balancing interests between implementers and technology investors.

If you are interested in more details about SEPs, the dynamics surrounding patent pool licensing or the requirements for negotiations on FRAND terms, especially in the context of the Avanci 5G Vehicle program, please do not hesitate to contact us at mail@kasznarleonardos.com.