Battles unfolding on several continents over who profits from connected cars, smarthomes, and robotic surgery may dwarf the size and scope of the tech industry’s first worldwide patent war -- the one over smartphones.
Automakers are now in court fighting some of the same companies that phonemakers such as
“So many different types of companies have to find a way to get these deals done,” said
The value of standardized technology was a key issue in the smartphone wars that pitted the developers of wireless technology, like Nokia, Qualcomm and Motorola Mobility, against then-new entrants into the handset market, such as Apple and
The new disputes are potentially more lucrative as sales of devices using 5G is forecast to grow to $668 billion globally in 2026 from $5.5 billion this year, according to
Courts in the U.S. and Europe have in the past few weeks
Those rulings have already favored the telecoms in cases brought by the automobile industry in Europe and the U.S. over the current wireless standards
In the past few weeks, judges in Germany
That pool, Avanci LLC, handles licensing patents owned by Qualcomm, Nokia,
“Patent owners want to get paid because they are proud of what they created and continue to innovate,”
Automakers typically leave patent issues to their parts suppliers, who pay any needed royalties and indemnify the automakers against lawsuits. Mercedes-Benz maker Daimler is chafing at the way the telecom industry handles licensing, saying the patent owners should deal with the suppliers like everyone else.
Continental said it was willing to pay royalties, but Avanci will only deal with the automakers so it can collect more money. Royalties should apply to the $100 part that allows connectivity, not a $50,000 car, the parts maker said.
In a letter to the U.S. Federal Trade Commission, Daimler and
“The fact that more and more industries are going to start incorporating technology that has to be standardized means it’s going to be even more important to resolve these issues,” said Katie Coltart, a patent lawyer with
Industry standards are necessary to ensure devices can talk to each other and companies that develop those standards promise to license relevant patents on fair, reasonable and non-discriminatory terms -- known as FRAND. But the standard-setting boards have purposefully never defined that phrase to avoid in-fighting that could hobble the ability to create the standards.
“You’ve got a handful of companies that are investing billions of dollars in research,” said Mark Snyder, deputy general counsel for Qualcomm. “In a functioning market, you want people to engage in earnest negotiation. FRAND is a two-way street.”
The fight between Avanci and Daimler notwithstanding, Siino said patent pools give firms access to large swaths of patents needed to comply with the wireless standards. They can be a “safe haven” that limit the number of negotiations needed and take the dispute out of the trade wars that pit country against country, he said.
Still, there are potentially thousands of patents that aren’t part of the pools and aren’t encumbered with FRAND obligations, said Craig Thompson, general manager of Unified Consulting, which helps companies analyze patent portfolios.
The American and European telecom companies have found their biggest
The rulings indicate a “pro-innovation understanding of the law” and are important for “competitiveness of the U.S. technology market but more importantly, innovation internationally,” Delrahim said at a Sept. 10 LeadershIP 2020 conference in Washington.
There’s no guarantee it will be smooth sailing for the patent owners. A Chinese court has issued an order that would limit InterDigital Inc.’s powers in a royalty spat with handset maker Xiaomi Corp., even though the legal fight is in India. And judges in Dusseldorf indicated they want the
The concern is that if there isn’t enough money for patent owners, they won’t work together to develop a single system that can be used for anyone. Too much money, though, means manufacturers will increase their prices or opt to pass on using the latest technology, said Mauricio Uribe, a patent lawyer with Knobbe Martens in Seattle.
“Neither extreme is good for consumers,” he said.
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