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

November 30, 2020

Kasim Alfalahi
Founder & CEO, Avanci
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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.