A few months ago, the Avanci patent pool announced that its 4G program had licensed most of the industry. This year, the world's car makers will have to upgrade their cellular standard-essential patent (SEP) licenses from 4G to 5G. Will that transition go smoothly? I think it should, but it's too early to tell.
In the first part of this post I'd like to draw your attention to an interesting automotive IP conference that will be held in Munich on March 1-2; subsequently I'll also share a few observations on IPlytics' efforts to market their services to the automotive sector in ways that may raise false hopes.
Auto IP & Legal World Summit (Munich, March 1-2, 2023)
Last April, conference organizer Ardensi held its Auto IP & Legal World Summit in Frankfurt, and it was a very interesting event in terms of attendees and content. This year's edition will take place in Munich on the first two days of March (click on the image to enlarge):
The conference covers a broad range of auto IP topics. The first part is about the ramifications of the Unified Patent Court (UPC), with speakers from industry players Thyssen Krupp and ABB, the EPO's Michael Froehlich (whom I remember from his days as Germany-based IP in-house counsel of BlackBerry), and two lawyers from well-known firms: Meissner Bolte's Philipp Rastemborski, who also spoke at last year's Auto IP Summit and now heads his firm's litigation practice, and Powell Gilbert's Rajvinder Jagdev, whose list of key cases is truly impressive.
A panel discussion FRAND litigation, negotiation, and dispute resolution promises some rather lively debate: Continental's Michael Schloegl ("Schlögl" in German) and the Fair Standard Alliance's Secretary General Evelina Kurgonaite will represent implementers in a debate with Avanci's Senior VP Laurie Fitzgerald and the head of Huawei's European IP department, Xiaowu (Emil) Zhang. As I wrote earlier this month, Huawei--which has recently signed up a number of car makers as licensees--has become an "accidental" net licensor, but remains a major implementer, too.
In a way, Conti and the FSA--represented at the conference by speakers who do not shy away from controversy--will have to argue with success: Avanci works. Huawei's licensing program works. But the FSA has members such as Apple and Continental who have a different vision for how they would like wireless SEP licensing to work.
One of Conti's key competitors, TomTom, will give a presentation on the changing licensing landscape.
Upon my request, the organizers provided the following short description:
The Annual Auto IP & Legal World Summit discusses the most pressing challenges faced by the global auto industry. Every year attendees from leading companies like Continental, VW, Bosch, BMW, Volvo, Mercedes Benz, Schaeffler and more gather to talk key issues, potential solutions surrounding IP risks, SEPs & FRAND negotiations, UPC, technology and more through panels, presentations and roundtable discussions. Join 100+ attendees and 30+ speakers from 01-02 March 2023 at the Hilton Munich City, Munich, Germany. Contact Vaishali on vaishali.popat@ardensi.com to get involved in the Summit.
IPlytics claims to speak for the automotive industry, favors complications over simple solutions
Patent database services are useful or certain purposes, but what I take issue with is when those offering them overstate the reliability of their results or the impact their tools can make.
A few days ago, IAM published an op-ed by IPlytics' founder, Auto industry demands a fresh SEP/FRAND focus in 2023. What does this mean? Has IPlytics become a lobbying front for the automotive industry? What mandate does Tim Pohlmann have to speak for an entire sector?
The automotive industry wants smooth and efficient solutions. But if things go too smoothly and efficiently, that industry may not have much of a need for patent analytics services. In that indirect sense, IPlytics definitely is an automotive stakeholder...
The previous day, IPlytics hosted a webinar, How to gain the competitive edge for V2X technology. Can a patent analytics firm really give innovators and implementers as "competitive edge"? You be the judge.
Back to the IAM op-ed. I disagree with the suggestion that something disruptive is needed: we're just talking about an upgrade from 4G to 5G. I also disagree with some specific statements.
Mr. Pohlmann says "[car makers' buying] power is so significant that most suppliers include indemnification provisions in their contracts." But in the Continental v. Avanci dispute (which ended last year when Conti finally stopped throwing good money after bad) Conti was unable to establish injury, and a key reason for that was that it couldn't point to any actual indemnification claim. Almost the entire automotive industry has the Avanci 4G license by now, but no indemnification claim by any of those licensees against any of their suppliers has become known to date.
The traditional allocation of liability in the automotive industry is indeed that suppliers are responsible. But by now that industry has accepted to take licenses at the end-product (i.e., car) level, which eliminates the need for indemnification clauses.
The following suggestion of a causation makes no sense to me:
"A battle of where to license in the value chain was fought in US courts between automotive supplier Continental, and Avanci and Nokia. Much of the heat dissipated from the dispute when Daimler opted to take a licence from Avanci."
Conti filed its U.S. complaint (in the Northern District of California, from where it was transferred at Avanci's request to the Northern District of Texas) in 2019. Daimler initially took a car-level license from Nokia, which was announced on June 1, 2021. But Continental's federal lawsuit had been dismissed (with prejudice) approximately nine months earlier: on September 10, 2020--and it took well over a year from that dismissal until Daimler took an Avanci license (December 2021).
A few months later, the Fifth Circuit affirmed the dismissal. My article on the initial panel opinion has since been nominated for the Antitrust Writing Awards by Concurrences and George Washington University.
The chronology of events renders IPlytics' theory implausible. If there was any causation, it was the opposite: the fact that Conti failed with its U.S. litigation may have persuaded not only Daimler but also other car makers that taking an Avanci license was a pragmatic choice.
After Daimler took not only the Nokia but ultimately also the Avanci license, Conti still brought two petitions for rehearing en banc with the Fifth Circuit. The only thing Conti did not try was to appeal the case further to the Supreme Court, presumably for lack of support from potential amici curiae who didn't deem such a weak case the right vehicle to push for an obligation to license SEPs at the component level.
No one stands to gain anything from fighting the lost war over component-level licensing again in connection with 5G, other than litigation firms and other service providers, such as IPlytics.