48 telecommunications technology companies, including Finland’s Nokia, Japan’s NTT, and US chipmaker Qualcomm have asked that Toyota, Honda and Nissan pay them patent fees for the components they use to link automobiles to the internet.
The development demonstrates the competitiveness of digital businesses entering the automotive market and may result in greater expenses for automakers building next-generation linked technologies for their vehicles. These three Japanese automakers will now have to reconsider their patent tactics in the future.
The U.S. business Avanci, which is responsible for negotiating patent fees on behalf of the LTE (4G) communication standard, is proposing the three main Japanese automakers to pay $15 per vehicle in return for full usage of associated patents held by companies like Nokia and Qualcomm. Even if drivers never use the communications technology, they will still have to bear the patent fee.
Avanti streamlines automakers’ connection offerings by combining the licensing rights to all the necessary cellular standard essential patents into one deal. According to their website, over 25 million connected vehicles are presently licensed via the Avanci marketplace throughout the world.
Avanci gathers all related patents into what are known as “patent pools” in order to conduct collaborative negotiations on behalf of its telecom’s clients. In addition to Nokia, additional worldwide corporations such as Sweden’s Philips, Ericsson, and Japanese firms such as Sharp, Panasonic, NTT and Sony Group, are participating, bringing the total to 48.
The 48 corporations control nearly 70% of the standard patents that constitute the foundation of 4G communications technology. They are regarded as fundamental patents required for the development of internet-connected automobiles.
Nokia, for example, excels in communication infrastructure like base stations, but Qualcomm has a large number of essential semiconductor-related patents.
According to Nikkei, the inventions to be licensed include techniques for sending and receiving radio waves using in-vehicle communication devices, as well as the sequence of operations for gadgets. Avanci is prepared for similar discussions on 5G-related patents as the car sector prepares for the upcoming introduction of 5G technology.
It’s not clear if the three automakers are going to agree to pay a fee for the patents, including splitting the bill with their suppliers. If that’s the case, the royalty is expected to range from billions of yen to almost 20 billion yen