On the third anniversary of a groundbreaking deal between Avanci and BMW, three reasons why patent pools are now more important to the auto industry

Three years ago I signed possibly the most important deal of my career, when BMW Group became the first automotive licensee on our newly founded Avanci platform.

It was a major milestone in our mission to license the vast majority of 2G, 3G and 4G essential patents in a single license at a fair, flat rate.

Since that first agreement was signed, more than 16 million connected vehicles from 15 auto brands under license are on the road around the world, and we continue to welcome new patent owners and auto makers to the platform.

The success of Avanci has been based on a very simple but important principle: listening to and understanding the views of different groups with opposing views and interests.

For years, disputes over patent use and costs in the smartphone industry were fought out in long, expensive court cases, in which no-one emerged as the winner, apart from the litigators.

I knew it could be different for the automotive industry. There had to be a better, simpler and smarter way of doing business by talking and bringing people together, focusing on what was important – getting deals done and driving innovation together. That’s why I founded Avanci.

Once you’ve heard what people have to say, you can start looking for solutions and solving problems.

BMW had a number of things they needed from us to make it work for them, and we talked to them over many months.

We had to ensure the price we set was right for all parties. Our whole business is founded on relationships, trust and working in partnership with both licensees and licensors so we can find an agreement which works for all parties. It simply wouldn’t work if we didn’t invest time in this way.

There was definitely pressure on me to get the BMW deal done, and it was a challenging time.  It’s a bit like opening a restaurant. You can have the right ingredients, the right dishes and have done your market research. But you need customers to walk in and enjoy a meal together. Until you open your door for the first time, you don’t know if it will work.

There was also a lot of pressure after agreeing the deal, because I wanted to repay that trust they had shown in us and to exceed their expectations.

I remember having a celebratory meal with BMW Group’s General IP Counsel Josef Dirscherl and thanking him for the faith they’d shown in Avanci. And he replied: “no, thank you, this is an amazing deal for us too.” It made me really happy to realize that we both came out feeling like we’d succeeded. That’s exactly how it should be.

To mark that deal and all the benefits that have come from it, I asked my friend Josef, who has now retired, if he felt that deal is as important now as it was then. He gave me a simple answer, including three reasons why:

  • “My 32 years of experience in IP at BMW group made me a believer in pragmatism. Kasim and his experts gave the clout and contacts that helped me assure my board they would succeed. Three years later, though I have retired from the industry I keep close tabs on developments. Every technological trend and product development I see makes me more certain that our original deal with Avanci was a great step forward for the car industry. I believe that similar solutions are necessary for automotive companies to thrive in the next generations of connected cars. There are many reasons for this, but three in particular that I would encourage colleagues in the auto industry to reflect on: 
  1. Simplicity. Avanci transformed a situation where car industry IP professionals had to work with suppliers to deal with multiple IP owners where it was far from obvious how much was relevant for their products, into a one-stop-shop where Avanci worked with IP owners and auto makers to come up with a common solution and fixed price 
  2. Managing risks. Taking an Avanci license meant we could encourage other patent owners to join Avanci instead of seeking a direct license with us, and also provided a reference price to help provide create legal comfort in case they refused. Minimizing the risks of litigation freed time up for me and my team to support innovation in the company. 
  3. Efficiency. Dealing with a third party like Avanci made it possible to take a license to the patents of many patent owners without dealing individually with the patent owners. Having an experienced set of individuals who knew both auto and telecoms meant we were speaking each other’s language, and Kasim was able to get buy-in from all sides, succeeding where others had failed before. 
  • Josef Dirscherl, Former BMW Group General IP Counsel 

The last three years have been eventful but, standing as we are on the cusp of major technological change, I see the next three years being just as exciting. We recently launched our 5G automotive program, and as the car industry looks forward to the opportunities of electric vehicles, 5G connectivity, assisted and automated driving, the next generation of Avanci solutions will be there to make the route to licensing IP that much easier.

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Fresh thinking on the future of intellectual property

Every year, we see the pace of technological innovation increase. Whether in mobile communications, automotive, artificial intelligence, blockchain or pharmaceuticals, there seems no end to the opportunities which technology will bring.

As industries converge, there remain some imperatives to ensure that innovation can continue. Those who create products and services need access to the intellectual property – mostly patents – of those who have built the technologies, while those who have invented those technologies need a fair return on their investment in innovation, to ensure that the creative cycle can continue.

At Marconi, we work where these two worlds converge, at the forefront of technological innovation. As an expert organization, trusted by patent owners and product creators alike, we believe there are topics that all those involved in the business of innovation need to consider. Over the coming months, we’ll be writing on topics at the intersection of intellectual property and business; offering our thoughts on the future of the sharing of technologies.

But first, I wanted to tell you a little bit about Marconi. In 2017, we recognized the need for a new approach to how technologies were shared. In the past, those who created the technologies and those who implemented them would negotiate individual patent licenses, involving many lengthy negotiations and high costs.

As we move to a world where evermore companies are creating products and services; a new approach is needed, and we established Marconi to transform patent licensing across different technologies and products. We now have four different companies, united by that shared vision:

Avanci is focused on licensing cellular standard essential patents in the Internet of Things and automotive markets, offering a one-stop license at a fixed price to the patents of 39 licensors. Fifteen automotive brands are already under license, with more than 16 million licensed connected vehicles on the world’s roads. Earlier this year, the World Economic Forum awarded Avanci among its Technology Pioneers for 2020, recognizing its work in accelerating innovation for the Internet of Things.

Velos Media licenses essential patents for the HEVC video codec standard, from six patent owners responsible for many of the most significant HEVC innovations. Velos Media has around 40 licensees, covering a significant share of the markets for HEVC capable set-top boxes and televisions, as well as other categories of HEVC capable products.

Teletry is focused on licensing The BlackBerry patent portfolio, one of the most valuable in the wireless telecommunications industry, spanning more than 38,000 patents and patent applications around the world. Teletry unlocks opportunities and creates value for BlackBerry and smartphone companies.

Innovius creates new ways to share patented inventions. We develop solutions that provide value for both product innovators and patent owners, bringing together portfolios for licensing as well as negotiating and administering license agreements. Our goal is to simplify licensing for patent owners and enable manufacturers to offer their products with confidence and minimal disruption.

Marconi supports all of these companies with a team of world class licensing experts. Our leaders include the former heads of intellectual property at companies such as Ericsson, Google, Microsoft, Motorola, Nokia, Qualcomm and Texas Instruments. Eleven of our people were recognized amongst this year’s IAM Strategy 300, which identifies the individuals who are leading the way in the development and implementation of strategies that maximise the value of IP portfolios.

The topics we will write about reflect the diversity of innovation that has enabled this new approach to sharing IP. I do hope you will find them interesting, perhaps thought provoking, but above all, useful. Stay tuned!