Avanci just announced that "Samsung Electronics has become a licensor for several of its licensing programs, including Avanci Vehicle 4G, Avanci Aftermarket and Avanci Broadcast." IAM has already reported (paywalled).
The part about Avanci Broadcast already became known last month (Avanci announces patent pool for ATSC 3.0 (aka NextGenTV) broadcasting standard that is ubiquitous in U.S. and South Korea: initial licensors hold more than 70% of SEPs). What's new and incredibly significant is that Samsung has now also joined Avanci's automotive pools. Avanci's 4G pool has license agreements in place with virtually the entire automotive industry. In February, Avanci also announced a pool for aftermarket devices (trackers, toll collection, monitoring systems) that are not pre-installed in cars.
Samsung is the largest purely defensive holder of cellular standard-essential patents (SEPs). Despite holding one of the leading cellular SEP portfolios, it has never sued an implementer proactively, and has only countersued over SEPs for retaliatory purposes on two occasions (Apple, Huawei). This is also the first time for Samsung to join a cellular patent pool. The Korean electronics giant has been participating in video codec pools for a while (first MPEG LA, then Access Advance), but has not been among pool licensors who went out to sue unwilling licensees.
In February 2022, LG Electronics--another Korean electronics maker--already joined Avanci. The two factors that made LG such an important addition to Avanci's licensors apply to Samsung as well:
portfolio size (Avanci already covered a solid majority of all 4G SEPs before Samsung joined, but is even stronger now and gives licensees more value without a rate increase)
and
automotive supplier status:
Samsung's Harman subsidiary (operating as Harman Becker in Europe) makes network access devices (tier 2 of the supply chain) that are incorporated into telecommunications control units (TCUs; tier 1 of the supply chain), which are then incorporated into cars. With most of the world's automotive brands having taken the Avanci license, the vast majority of cellular SEPs being in the pool, and with two major tier 2 suppliers on board, it looks like resistance to Avanci's model comes down to only a few tier 1 suppliers such as Continental, whose litigation went nowhere but which continues to engage in Avanci-bashing at conferences.
Samsung's decision to join Avanci is meaningful in so many ways. Given that Samsung is one of the world's largest implementers of cellular SEPs, its conclusion that the pool rate is fair, reasonable, and non-discriminatory (FRAND) serves as further validation. If Samsung had joined on the basis of a deal that gives it cheaper access to other companies' patents for its own devices while nominally charging everyone a higher rate, that would be different--but Samsung makes phones and tablets, not cars.
It also means that Samsung expects to be compensated for the use of its IP. No more free lunch for car manufacturers and those who make connectivity-based aftermarket products.
This also has a policy dimension. The European Commission's draft SEP regulation and the draft version of the impact assessment that will accompany the legislative proposal reflect an about-face on the question of patent pools. Today's news, however, shows that pools can streamline the licensing process, while the Commission's ideas would have the opposite effect.
Everyone interested in the subject of cellular SEP licensing wants to know who the initial licensors of Avanci's upcoming 5G pool will be. Today's announcement does not mention 5G, but why would Samsung join only the 4G pool if the 5G pool could be announced anytime? We will see, but my guess is they will be involved in that one, too. This here looks like a strategic decision.
Samsung's main rivals are Apple and Xiaomi. Apple is lobbying aggressively for that EU regulation, hoping to slow-roll and complicate SEP enforcement. Most of the cellular SEPs that Apple owns are not "homegrown" patents, but were acquired from Nortel and Intel. Xiaomi has a growing SEP portfolio, and is also working on an electric vehicle. Neither Apple nor Xiaomi are Avanci licensors as we speak. But there was a time when Samsung also didn't seem to have the profile of an Avanci licensor, and now it has become one, which demonstrates Avanci's integrative force.
