From our fourth to fifth year, and from 4G to 5G

As we pass the fourth anniversary of announcing our first Avanci licensee, it seems appropriate to reflect on how much has changed, for Avanci and the auto industry, during the last four years.

We launched Avanci in September 2016, as an independent marketplace with a vision to transform how patent licensing is done. In previous roles and at other companies, our team had experienced the ‘smartphone wars’ and believed things should, and could, be different for the burgeoning Internet of Things industry. It was a lofty ideal, building a more efficient approach to licensing essential connectivity patents for an era which would see the convergence of several different industries, including automotive and telecommunications. But we also believed that we had the right team of experienced, industry professionals to make it happen, and were encouraged by feedback from patent owners and auto makers alike.

The inclusion of 4G connectivity to vehicles has benefitted both consumers and automakers. For the consumer, this incredible technology powers their vehicle’s infotainment and emergency call systems. For the vehicle maker, the technology enables wireless diagnostics, data collection, and over-the-air updates to the vehicle’s systems. Automakers can also offer a range of connected services which can enhance their customer experience while earning them incremental revenue. Connected vehicles are an undeniable win-win for consumers and OEMs and serve as the precursor to tomorrow’s autonomous vehicles.

All of these connected features are underpinned by communications standards such as 3G, 4G and soon, 5G. These open standards are the result of billions of dollars invested in research and development over many years by dozens of innovative companies, largely from the telecommunications sector. They contribute their inventions to the standardization process to enable the widespread adoption that we have already seen in the smartphone world. In return, they seek a fair return from companies which utilize those standards in their products and who reap further benefits from that groundbreaking R&D. Automakers and others have then been able to create their own innovations, leveraging the communications technologies but without having had to invest in the R&D to develop them.

When BMW became our first licensee in December 2016, we had 11 patent owners in the Avanci marketplace and we published our fixed licensing rates of $15 per car, a one time payment for the lifetime of the car, to cover all of the current and future  2/3/4G essential patents of all of the patent owners in the marketplace.

Since then, I’m pleased to say that much has changed for Avanci. We’ve grown to have 25 automotive brands under license for their connected vehicles, which include not just cars but trucks, buses and even construction equipment. Our original patent owners have expanded their portfolios, and more patent owners have joined our marketplace, which now spans 47 patent owners, collectively responsible for the vast majority of 2G, 3G and 4G essential patents.

But over those years, one thing has remained constant. The 4G licensing rate of $15 per vehicle, paid once for the lifetime of the vehicle. Avanci’s value proposition is as straightforward now as it was then, but arguably even more compelling. An independent, one-stop marketplace for standard essential 2G, 3G and 4G connected car patents from many of the world’s most innovative companies, made available efficiently under one license at a low, fixed prices. Already, automotive brands responsible for more than 25 million connected vehicles have taken an Avanci license, recognizing the value the technology brings and the efficiency and affordability of the Avanci model.

It’s important to note that the Avanci rate represents a market driven solution, the result of lengthy engagement between patent owners and auto makers when we established the marketplace. Unlike a traditional licensor-run pool which typically sets rates unilaterally, Avanci worked with both licensors and licensees to arrive at its rates. I suspect that if we asked some of our 47 licensors, they might say that $15 is a little too low, and perhaps some of our 25 licensed brands would say the price is a little high. But, having been involved in hundreds of deals and many mediations, I can tell you that when both sides acknowledge that compromises were indeed made, the sweet spot has been found.

We now stand on the brink of 5G in the auto industry, which will ensure that drivers will have an even safer and more enjoyable driving experience. For automakers, 5G will unlock new revenue streams, create a closer connection to their customers, and allow them to stay ahead of their competitors as the automotive industry increases its focus on mobility rather than machines. As we continue discussions with a range of parties and prepare to launch our next program, licensing 5G connectivity for connected vehicles, we’d encourage all parties to talk to us about our solutions.

Licensor Spotlight: CICT Mobile embraces 5G opportunities with innovation

In the first of a series of articles, we spotlight the innovation of one of the patent owners in our Avanci marketplace, Datang Mobile (a subsidiary of CICT Mobile). This has been translated and adapted from an original article published by in China.

Avanci platform licensor CICT Mobile (a subsidiary of CICT Group) is a key force for 5G technology and industry in China and has been engaged in 5G research since 2012. Working with a range of industrial partners, CICT Mobile has targeted 5G application in industries including media integration, smart education, smart tourism, intelligent security, intelligent connected vehicles, smart manufacturing, smart power, smart healthcare, smart cities and smart industrial parks, as well as customized end-to-end 5G solutions. The company also works with leaders in relevant vertical industries and telecom operators to promote the rollout of popular 5G applications.

In a recent interview with Chinese media, CICT Mobile scientists Gao Xuejuan and Xing Yanping shared their views on 5G innovation, how they have contributed to the development of the telecom industry and how the Avanci platform is supporting the innovation process.

According to Gao, her achievements at CICT Mobile are down to the company’s development philosophy of building a “wireless communications engine” and its corporate values of innovation, market, integrity and responsibility. “I have been at CICT Mobile for 12 years, working on physical layer protocols since day one. I participated in the research and standardization of the LTE protocol versions ranging from R10 to R15. I’m currently researching 5G NR and have filed 260 patent applications as the first inventor.”

Xing shared that, “I joined CICT Mobile after graduating in 2007 and have been working on the standardization of the physical layer of mobile communications systems since then. I have participated in the standardization programs of several international and domestic standardization organizations, such as 3GPP and CCSA (China Communications Standardization Association).” She added that “CICT Mobile has innovation in its DNA. We recognize the important role of innovation in the development of the company and the entire industry, and we strive to create an environment that’s conducive for innovation.”

Back in the early days of 3G standardization, CICT Group, supported by industry authorities, drew on its years of research to present its proprietary TD-SCDMA technology, making it one of the three mainstream 3G standards, a breakthrough in mobile communications standards. This approach has also promoted the continued innovation, improvement, and standardization of 3G’s successors, 4G and 5G. To turbocharge the development of 5G in China, CICT Group has actively engaged in the formulation of global 5G standards. From the beginning of 3GPP’s 5G standardization work from 2015 to 2020, the company has submitted more than 10,000 technical documents on 5G technology and played a leading role in the approval of many important projects in 3GPP’s standardization efforts.

Datang Mobile (a subsidiary of CICT Mobile) has been working with Avanci’s IoT licensing platform since 2019. Commenting on Avanci, Gao said, “As an automotive licensing marketplace, Avanci provides a one-stop solution for telecom companies and automakers. It can further fuel the wide adoption of wireless communications technology in the auto sector. The cooperation between Datang Mobile and Avanci plays an exemplary role in the application of 5G standard technology in the IoT field. I think other IoT fields can also draw on this model.”  Xing added, “With its innovative approach to patent licensing, Avanci has attracted dozens of domestic and foreign telecom companies. It offers a one-stop solution for them and automakers, providing a great model for the application of cellular technology in IoT. This allows telecom companies to focus more on the development of the telecom technology itself. The implementors find it extremely inefficient to work with each telecom company separately. In fact, Avanci addresses the pain points of both sides. I think this is exactly why it can attract people to get on board. It can also fuel the wide adoption of wireless technology in the automotive sector.”

The industries and fields for vertical applications may be new to many telecom companies. If you want to go it alone, you will need to invest a lot of time and effort researching, negotiating and communicating. However, the Avanci marketplace resolves this problem for many telecom companies, acting as a bridge between them and automakers, which appeals to vendors in the communications field.

What will 5G mean to automakers?

5G is here and has the potential to provide as much or more value to automakers than to their customers.

Those putting 5G at the top of their intentions and investments will reap the rewards because it will unlock new revenue streams, create a closer connection to their customers, and allow them to stay ahead of their competitors as the automotive industry increases its focus on mobility rather than machines.

Analyst firm McKinsey estimates that mobility and data-driven services such as shared mobility, apps and navigations could create around $1.5 trillion of extra revenue, or a 30 percent boost, in 2030 compared to 2016. Ford and Google’s six-year partnership announced this week, which will see Google assume responsibility for all connectivity, from infotainment to AI in Ford cars, is testament to this.

Crucially too, it’ll allow automakers to have an enhanced and lasting connection to their customers, beyond just the point of sale, giving them the option to offer drivers features such as remote diagnostics, predictive maintenance and online service scheduling.

As cars become more connected as a result of 5G, they will generate and handle mass amounts of data. Data is key and car makers must ensure they can generate the same amount of data that technology companies such as Uber and Lyft do in order to compete as the industry transitions to providing mobility rather than vehicles.

5G is no longer the next big thing. It’s arriving in the auto industry this year and its importance will continue to grow. In the not too distant future, the majority of vehicles will have 5G connectivity on board, with analyst firm Gartner predicting that by 2023 the automotive industry will become the largest market opportunity for 5G IoT solutions.

Avanci is now the go-to global licensing platform for connected vehicles and other IoT devices, with 15 auto brands already on board as licensee and with 40 patent owners on board. More than 16 million connected vehicles on the world’s roads are already licensed through our platform. We’ve taken the complexity out of patent licensing so that automakers can focus on doing what they do best: building the next generation of connected vehicles. Please get in touch to find out more.

The impact that 5G will have on our driving experience

5G has arrived and will shape the future of connected cars, ensuring that drivers have a safer and more enjoyable driving experience. In fact, many major auto brands across the globe have already turned their attention to the design and manufacturing of new 5G-enabled models to offer a seamless driving experience, rich with new opportunities.

Improving the safety of travel

According to the World Health Organization, there are approximately 1.35 million fatalities each year as a result of road traffic accidents. But thanks to new 5G technology developed specifically for automotive applications – such as the introduction of vehicle to everything (V2X) communications – road safety is expected to be vastly improved.

V2X significantly improves the flow of information between vehicles, pedestrians, and road infrastructure through the creation of ultra-reliable, high bandwidth, and low-latency data links that were not possible in the past. These V2X communication links enable data to be shared instantaneously, giving vehicles the capability to “sense” danger and take preventative measures to avoid collisions faster than a human driver could react. In fact, auto manufacturer Seat estimates that 68% of accidents could be avoided by using 5G technology combined with cameras, sensors, and beacons as part of city infrastructure.

Many of the features of V2X technology will increase safety on our roads. One example, vehicle-to-vehicle (V2V) communication, allows vehicles to communicate directly with one another without traversing any other network nodes. This advance allows one vehicle to issue warnings to other vehicles on the road, which can help to avoid collisions, avoid road hazards, and manage traffic congestion. Another example, vehicle-to-infrastructure (V2I) communication, creates communication channels between a vehicle and nearby infrastructure. The technology will be used, among other things, to sense an upcoming red light, and then adjust the vehicle’s rate of travel to maximize fuel economy or even automatically slow down or stop the vehicle if the driver fails to do so.

Improving the driving experience

Critically, 5G’s enhanced connectivity and higher data rates will also enhance the driving experience. Many of today’s drivers and passengers are looking for cars to keep pace with other parts of their digital lives. According to McKinsey, 40% of consumers would change car brands just to gain more connectivity within their vehicles, rising to 61% for drivers in China alone. User demand for connectivity is only increasing, as drivers seek to unlock new benefits that make driving more comfortable.

As the 5G Automotive Association points out, 5G technology will enhance any journey by powering real-life traffic information to optimize a driver’s trip, for example, with the ability to find the closest free parking space or enabling predictive maintenance to save drivers both time and money.

But 5G won’t just benefit drivers, it will benefit passengers too. As Christoph Voigt, head of connectivity at Audi put it, “the trip will be considerably more entertaining” with the introduction of connected cars. That could mean being able to, in just a few seconds, download and start streaming content during the ride or join a video call.

A recent study from Nokia found that the majority of vehicle owners are interested in enhanced connectivity in the car, with improved navigation and safety features the lowest-hanging fruit. It’s clear that drivers want a vehicle to do more than just get them from A to B. With wireless technology under the hood, vehicles can stay in sync with information over the web, the cloud and whatever comes next.

5G – along with autonomous driving and electrification – is one of the most exciting technological innovations to happen to vehicles. Automakers that tap into this opportunity will enable their customers to benefit from a number of unique advances and position themselves to meet the growing demand for cars that keep pace with consumers’ digital lifestyles.

Stay tuned for more!

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!