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Last week's most read: Connected car patent pools are inevitable, say telecoms and automotive companies

Audi, Ericsson, Peloton and other industry stakeholders agree that patent pools are coming to the autonomous vehicles space, but say questions remain around pricing and which technologies will be pooled

Driverless-car companies believe autonomous vehicle patent pools will emerge because no one company has all the technology needed to keep a vehicle safely on the road.

These vehicles require different technologies such as inter-connected communication devices, sensor equipment, and safety technology to drive autonomously. Sources point out that licensing pools may be a simple one-stop solution for car manufactures to get everything they need in one place.
But they add that the emergence of such pools will raise questions about which technologies will be pooled and how they will be regulated.  
Efficiency is one reason for driverless car patent pools. Mathias Hellman, vice president for IPR strategy and portfolio management at Ericsson, says the autonomous vehicle supply chains are much more complex than those for traditional vehicles, and that patent pools are a very efficient means of getting access to all the required IP in one fell swoop.
He adds that having to negotiate numerous different agreements with suppliers would also raise considerable administrative costs.
“Cars are now essentially computers on wheels,” he says. “You used to have very isolated value chains with suppliers, and you didn't really have technology reliance on any other industry.
As things get digital all of a sudden you are dependent on ICT technology. When that happens you need a deal to handle the IP that concerns such technology.”
The efficiency wins introduced by patents pools would be particularly beneficial to start-ups investing in the autonomous vehicle space, say sources. Smaller entities often have smaller budgets and few, if any, in-house lawyers to help them negotiate multiple licences.
Rather than buying multiple licenses from different suppliers, a licensing platform would allow them to buy everything in one go and have one price for everything in their business model.
“If you are a start-up and your competitors are subscribing to the same pool, that levels the playing field,” says Hellman. “You wouldn't have to worry about being at a competitive disadvantage. Typically it's very inexpensive if you're a small player.”

He adds that small entities are sometimes not required to pay their way in patent pools.

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One of the most important elements in autonomous vehicles is the ability to coordinate with other driverless cars. Industry sources say the first technology that could be pooled, because of this fact, is that used in communication devices.
Matthias Schneider, chief licensing officer at Audi, says the internet of things will create a complex licensing landscape for SME driverless-car stakeholders that will need to implement inter-connected devices. He explains that many patent owners with communication devices do not have the capacity to license individually because of their small size and so a patent pool may be a solution to license their products more easily to car manufacturers.
Carlos Rosario, IP attorney at connected-vehicle tech company Peloton Technology in California, says: “We will see something like patent pools emerge for driverless cars. There will be a robust set of features in these products and you want them to be connected with each other – whether that’s by 5G or even a future 6G.”
Source say that the roll out of 5G technology makes patent pools for connected cars even more attractive. “My expectation is that the 5G patents needed for communication technology will be mostly licensed through pools in the automotive space,” says Schneider.
Patent pools have also already been established for communications tech because of the tensions surrounding fair, reasonable and non-discriminatory licensing in the telecoms sector, and it should not be too difficult to extent these platforms into driverless-car connectivity tech.

Last week’s decision by the European Parliament to adopt wifi as the standard for interconnect-ability, however, might delay the formation of licensing pools for connected car 5G technology.

Show me the money

Third-party rights for different autonomous-vehicle technologies can be hidden from car manufacturers, and sources say that this lack of transparency could also be solved by licensing pools.
Rosario at Peloton tells Patent Strategy: “The auto industry is not very vertically integrated. There are so many entities in the automotive space that could delay roll out of safer cars because of patent issues, and a patent pool would be a way to solve that.”
Sources add that rather than worrying about infringing on multiple patents, start-ups and automotive manufacturers can count on suppliers for all of their IP.
Counsel at a global telecoms company says: “The car manufactures typically get their suppliers to supply them with their tech. They don't want to deal with IP, they want their suppliers to deal with the licensing. They will not want to know about it and will want to be indemnified.”
He adds that the automotive industry might not be as familiar with the concept of fair, reasonable and non-discriminatory licensing as the telecoms sector, and that a patent pool would create a fairly simple way for manufacturers to tick off all the IP boxes without worry about being sued by third-part rights holders.
While patent pools may be attractive because they offer a one-stop IP shop, some companies may take issue with the associated costs.
He adds that any supplier downstream in the supply chain could potentially find a patent pool to be too expensive and prefer to be taken to court first rather than pay up front for any licences.
Schneider at Audi says that as the driverless car industry is relatively small, the likelihood of a patent pool forming will depend on how much money standard essential patent (SEP) owners feel they will get from licensing their products. He adds that it may be more advantageous for them to sell individually to different manufacturers in the complex supply chain than to pool together.

But the argument goes that patent pools could reduce the risk of litigation and the associated costs of a court case to car manufacturers. Rosario says: “One of the main objectives of a patent pool is to ensure that the company does not spend years tied up in litigation with a competitor.”

Safety first

According to Rosario, one of the first questions he is asked by transportation officials and regulators is about the future safety of driverless cars. With recent stories of crash tests hitting the news, regulators have become quite concerned about safety features that might appear in these cars.
Rosario says: “I imagine a solution to regulation will be patent pools. Public policy would not be served if they allowed safety to be held up by patent fights between self-driving cars.”
There is a precedent of forced licensing by government regulators with the e-call feature, which sends out a signal to emergency services, which must be in every European car sold after 2018. 
Sources say that regulators could step in to make sure that all driverless cars operate on a standard system. In such instances, patent holders would be obligated to licence their patents.
Driverless car stakeholders are convinced that patent pools are coming to the connected car space. These licensing platforms offer clear efficiency, cost-saving and risk-alleviating wins for traditional car companies and their tech suppliers.
Several patent pools already exist to alleviate the tensions of licensing SEPs in the telecoms industry, and they could be well-positioned to extend their reach to encompass connected vehicles.

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