For a long time, Qualcomm had kept a surprisingly low profile in the automotive patent wars. But it was always active behind the scenes. The San Diego-based chipmaker is a member of some of the same lobbying groups as Nokia and Ericsson. And more recently, Qualcomm has been lobbying the European Commission and the German government directly in order to garner support for an automotive standard-essential patent (SEP) licensing proposal that must be rejected all the way.
The exact political dynamics aren't clear, but it is disconcerting that Germany's Federal Ministry for Economic Affairs and Energy will host a closed-door workshop on November 17 to discuss Qualcomm's proposed memorandum of understanding (MOU). There is a possibility that the German government is simply doing a favor to the epitome of incompetence in the SEP policy context--EU internal market commissioner Thierry Breton, who wasn't his country's first choice for the job and recently made himself totally ridiculous by repeating himself like a broken record that European companies' leadership in 5G "is a fact" (when even the only report that ever said so has been corrected in that regard). It might also have helped Qualcomm that the ministry is advised by a (non-cellular) SEP troll--Fraunhofer--in the patent policy context. In any event, Germany's automotive industry is no match for Qualcomm when it comes to IP-related lobbying.
There are several structural issues with Qualcomm's proposed MOU. I'll just highlight the three that I consider to be the most fundamental flaws:
Just like Nokia's recent and comparably deficient proposal, Qualcomm's proposed MOU would extend licenses only to tier 1 suppliers (which sell telematics control units (TCUs) to car makers), not to tier 2 (network access device, or connectivity module) and tier 3 (baseband chipset) suppliers. But the higher up you go, the more likely those companies are to hold cellular SEPs that enable them to cross-license with the likes of Qualcomm and Nokia.
Another Qualcomm-Nokia parallel is that the proposed MOU wants an entire car to be the royalty base, as opposed to the smallest salable patent-practicing unit (SSPPU). That means Qualcomm and Nokia seek to overcharge. And it's economically prohibitive to TCU makers, given that those TCUs sell at not much more than what, for instance, the abusive Avanci pool tries to charge car makers for its patents (up to 4G and not even including 5G, which will be several times more expensive).
Qualcomm is also attempting to derive non-monetary value from the MOU by having companies support its own self-serving (mis)interpretation of ETSI's FRAND policy (giving SEP holders the choice at what level of a supply chain they grant a license). Qualcomm would likely leverage that in its efforts to get the IEEE to revise its SEP policy.
Also, some of the leading 5G SEP holders are actually tier 2/3 automotive suppliers and therefore unlikely to be willing to accede to the MOU. That's just another reason for why this is a non-solution.
Qualcomm's initiative started earlier this year as far as I've been able to find out. At this point, however, part of the agenda appears to be that Qualcomm--just like Nokia--would like to dissuade the Dusseldorf Regional Court from referring to the top EU court a set of key legal questions concerning component-level access to SEP licenses. But Qualcomm's proposed MOU doesn't obviate the need to have questions clarified on which even some German courts (Mannheim/Munich and Dusseldorf) agree. The referral, which is still expected to happen on November 12, would resolve the question with respect to all levels of the supply chain. If anything, the fact that Qualcomm and Nokia are now trying to somehow distinguish tier 1 from tiers 2 and 3 underscores the need for judicial clarification.
My advice to the German automotive industry would be to decline to participate in the November 17 event as Qualcomm's proposed MOU is simply not a constructive contribution to the debate. Qualcomm has opposed component-level licensing for a long time because it's "humongously more lucrative" (as Qualcomm once told the IRS) to license only end-product makers.
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