The convergence of technologies in
autonomous vehicles is driving licensing tensions between
automotive companies and connected-tech suppliers with standard
essential patents (SEPs), according to telecoms and automotive
In-house sources explain that while automotive companies
have developed a culture of wanting to buy components from
suppliers that are free from third-party rights, telecoms firms
and some other SEP owners have traditionally filed infringement
actions against parties at the end of a value chain.
"Driverless car makers are now in a situation where they
could be attacked for patent infringement because their
suppliers did not get a licence for the technology, and they
have never really had to worry about third-party rights
before," says the IP manager of a car parts
He adds that this clash of cultures has led to conflict over
who should be the party to take out a licence in the chain
– which could be a problematic confrontation for all
stakeholders. While car companies do not want to be sued, most
SEP owners do not want to stall the flow of royalties in these
highly lucrative projects.
self-driving vehicle applicants
at the EPO 2011-2017
and self-driving vehicles report
"The problem we have at the moment is that infringers or
potential licensees are in a favourable position," explains the
head of transactions at a global telecoms company. "They can
stall and wait until they’re compelled to take a
licence and then only have to pay what they would have if
they’d taken it when it was first offered."
He adds that companies do not want this same situation for
the driverless car market that emerged in the telecoms sector
in cases such as Unwired Planet v Huawei.
Beyond this challenge, automotive companies are also
compelled to consider future licensing tensions and those that
arise from the creation of cross-collaborative projects.
The clash has come about because of the sudden influx of new
players into the automotive industry to meet the demand for
technologies needed to build driverless cars – from
radars and ultrasonic sensors to artificial intelligence
software and 5G systems.
As well as big players in the software and telecoms sectors
such as Intel or Qualcomm, car companies are working with
hundreds of thousands of SME or start-up companies with
specialisms in tech specialities such as AI to develop these
Statistics on top patent filers for driverless car
technologies released by the European Patent Office this month
illustrate the number of different companies and sectors in the
market and their stake in it. Out of the 25 top European patent
filers, only nine were automotive companies and only one of
those ranked in the top five.
Who should drive?
Automotive company sources argue that their companies should
not be the ones to take out a licence because of a potential
lack of expertise in various driverless car components.
The automotive parts IP manager points out that car makers
could always look to a patent claim to determine if they were
infringing a patent in the past. But because of the convergence
of unfamiliar telecoms technologies in driverless cars,
determining infringement of an SEP and working out a licence
agreement is much more challenging.
"When Apple and Qualcomm, for example, get together to
license a communication patent, each side has people that will
be familiar with the technology," he says. "But when it comes
to driverless cars, automotive firms could have no idea whether
they’re using a patent or not."
The senior patent manager at a global car manufacturer says
that a good solution may be to have module manufacturers take a
licence because they are in a better position to identify
He adds that automotive companies are trying to convince
courts and politicians to give suppliers a right to request a
licence – which is not happening at the moment because
an SEP holder can choose who to license to in the supply
The fact that automotive companies have such large supply
chains for driverless cars, he points out, also raises the risk
of a supplier taking a licence without the company knowing
about it and leading to 'double dipping’.
In-house counsel at telecoms companies may be less
convinced. The head of litigation at a global telecoms company
says automotive businesses have an obligation to develop their
expertise in the technologies that form their autonomous
"I do believe when they say they have no idea –
they have to face the fact that if they enter a new market they
have to learn the skills," he says. "If I become a doctor I
should learn how to do surgery or else not enter the
"There are enough people around who can give legal advice
– car companies have IP departments of 30 or 40 people
and should be able to do this."
Christine Maury-Panis, general counsel and security at
Viaccess-Orca, a subsidiary of Orange, says that as this
tension develops, the industry will likely see large car
companies swallow up SME and start-up firms to bring the
necessary expertise of telecoms modules in house.
"Yes I think that merger and acquisition will happen," she
says, adding that the trend is coming.
Road to valuation
A lack of expertise in driverless car components would also
make it difficult for car manufacturers to determine how much a
licence would be worth, according to in-house sources.
The head of licensing at a global car manufacturer (the same
company as the senior patent manager) points out that, due to
exhaustion issues and other rights, the value of a licence
should cover that of the entire supply chain.
But that is a particularly difficult prospect for automotive
companies that have huge supply chains that provide unfamiliar
"If you think about 5G, which will require a larger spread
of tech, there will be many more modules with different
capabilities that need different patents, which will come with
"And if you have hundreds or thousands of SMEs producing
products for connected tech, it is unlikely that many will have
the technical expertise or patent or IPR knowledge to really
negotiate licence agreements - and it is going to be a
nightmare if we do not find a way of streamlining these
The telecoms head of litigation says telecoms companies
could smooth this valuation process by making their rates more
transparent and easily accessible.
"I think for example, if every SEP owner had a standard rate
and made it public – via a patent pool such as Avanci,
for example – it would streamline the process."
But should automotive firms and current SEP owners bury the
hatchet in the near future, that result might not mean the end
for licensing tensions in the industry. The number of parties
that automotive companies have to deal with when it comes to
SEPs and the clash of licensing cultures may increase as the
products become more sophisticated.
The IP adviser of a global car manufacturer points out
regulatory bodies could begin to have more of a say over how a
driverless car should operate, and may force companies to
collaborate on and license their inventions.
That raises a new challenge for automotive companies that
they need to work with traditionally aggressive licensors and
litigators, such as Google or Apple, when they’ve
traditionally taken a more lenient approach.
Maury Panis at Viaccess-Orca agrees, and adds that we may
see an industry trend of different players with different
licensing habits working together, where perhaps one is used to
monetising assets for large amounts.