Mission accomplished for Avanci: virtually entire automotive industry licensed to 4G standard-essential patent portfolios of 51 licensors--now on to 5G

Reuters just reported that the Avanci patent pool has concluded 4G (including 2G and 3G) standard-essential patent (SEP) license agreements with several major Japanese and European car makers: Toyota, Nissan, Honda, and the Stellantis group (Fiat Chrysler, Opel, and other brands). Litigation by Avanci licensors was pending only against Nissan and Stellantis (in Munich, the world's #1 SEP enforcement hotspot), and will now obviously be withdrawn.

If a pool sets out to provide a one-stop licensing solution for a given industry, and then reaches the point at which its licensors own the vast majority (80% or so) of all patents essential to the standard(s) in question and where virtually all implementers in that industry (80-85% according to Reuters) have taken that license, then that's what's called "mission accomplished."

It appears that Avanci's "final boarding call" (as I dubbed it) has been heeded: various automakers preferred to take a license now over possibly paying $20 (instead of $15) per car later. The first automaker that became known to have taken an Avanci license after that final boarding call was the Hyundai-Kia group.

Let us now look past 4G and on to 5G, which thanks to higher throughput and (which may be even more important) lower latency is going to be at the heart of increasingly autonomous driving technologies. I have a lot of faith in Avanci being able to determine, once again, a sweet spot at which most patent holders and most implementers will determine that licensing is more efficient than litigation. What that rate will be remains to be seen. Who the initial licensors and licensees will be is also going to be interesting. Last time, BMW was an early adopter, and others were slow followers.

What do the critics say? Let's make a distinction between people being entitled to their own opinion (as we all are) and some believing they're entitled to their own facts (which we are not). Continental's Michael Schloegl ("Schlögl") in German claimed at a Frankfurt Auto IP conference less than five months ago (the next edition of which will be held in Munich by the way) that Avanci's license fees were rejected by the automotive industry. At the time, Avanci already had quite some significant market penetration, but by now, Mr. Schloegl's position is indisputably untenable. No wonder Conti's U.S. litigation failed at all levels.

It is not unreasonable for car makers to argue that they'd rather have their suppliers (tier 1 suppliers make telematics control units, tier 2 suppliers make network access devices, and tier 3 suppliers make chipsets) take patent licenses. That's how the automotive industry apparently has been handling patent licensing in other fields for a long time. But in telecommunications, the end product is typically the licensing level, and with the vast majority of connected vehiclse in the world now being licensed to the Avanci pool, no one can reasonably claim anymore that end-product level licensing isn't workable. It clearly is--otherwise we'd have heard about problems with the performance of all those license agreements.

I voiced criticism as well, but realized that Avanci was unstoppable after Daimler's settlement with Nokia last year, which showed that in the end it was just about money, not principle. Apparently a few others don't have the same degree of flexibility to adjust their positions to reality. They may ignore their customers' decisions to take car-level licenses and prefer to throw good money after bad on the litigation front and on policy initiatives.

With what Reuters has just reported, there can be no doubt that there would have been a lot more 4G SEP litigation targeting automakers if the Avanci pool option had not been created. If dozens of car makers had been sued by dozens of patent holders, that would have meant hundreds of patent infringement disputes--some of which would likely have been far more protracted.

That's why my advice to the automotive industry is the following:

• Set the right priorities. Understand the difference between fundamental threats and a mere cost of doing business. SEP licensing is the latter; Apple's and Google's schemes to take control over the most lucrative revenue streams are what you should really be concerned about. If you want to spend money on lobbying, by all means, fight for such important goals as making sure that map services will fall under the Digital Markets Act's search engine rule. You're not going to make much headway devaluing SEPs: that's Apple's agenda, and let them rely on their astroturfers.

• Support Avanci's 5G efforts because the alternative will almost certainly be costlier.

  A few years ago, some people in the automotive industry appeared to blame Avanci for the problem the pool firm was simply trying to solve efficiently. Would car makers have gotten a free ride if Avanci had not been around? Obviously not. In the aggregate of those 51 patent holders, the sum of license fees and transaction costs would most likely have exceeded (even by far) $15 per car. It's not unreasonable for patent holders to seek a higher royalty for 5G--even Avanci's 4G rate increased to $20 per car this month.

  In the end, Avanci is just a platform bringing two sides together, but the two sides determine what happens. Automakers have the opportunity to indicate a willingness to pay a 5G pool rate that will make the pool attractive to 5G SEP holders large and small. If they complicate the process despite the lessons learned from 4G, they have no one to blame but themselves.

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Tesla, Toyota, Honda finally file correct amicus brief--which doesn't say that Tesla is presumptive Avanci licensee

Just a quick follow-up to my previous post, which was about Tesla, Toyota, and Honda's failure to file their own amicus curiae brief (in support of Continental's petition for rehearing en banc of the dismissal of its "antitrust" case against Avanci, Nokia, and others), and also addressed the fundamental shortcomings of some other filings.

Tesla, Toyota, and Honda have meanwhile been allowed to submit a brief, and they finally uploaded their own brief as opposed to Thales's (this post continues below the document):

22-04-20 Tesla Et Al. ACTUA... by Florian Mueller

What the brief doesn't say is that Tesla is an Avanci licensee. Now, I don't have definitive knowledge of that. But IAM deduced from the near-simultaneous voluntary dismissal of multiple U.S. patent infringement lawsuits by Avanci licensors against Tesla that those cases were all settled in one fell swoop by taking a car-level 4G license from Avanci. The parallel German cases were also dismissed. And since then, no infringement action by any of Avanci's licensors (a total of 49 companies) against Tesla has become known. As an Apple lawyer once famously said, "I'm old enough not to believe in coincidences anymore." It's not impossible, but practically inconceivable, that Tesla wouldn't have taken an Avanci 4G license--that just hasn't been publicly announced, and all 49 Avanci licensors have apparently honored the NDA that is presumably in place.

It's somewhat strange that Tesla files an amicus brief against a patent pool from which it has a license--a license that bailed it out of multiple infringement actions. Tesla would have been free to pursue bilateral licensing instead.

The arguments in the brief add nothing to what the other amici had said before.

That's not the only mystery related to the amicus briefs filed in that case. A group of professors--including some I actually respect a great deal--made a filing one day ahead of the deadline, but should actually have taken that time to correct some typos and other mistakes that come across as hasty, if not sloppy, making me wonder whether the academics even knew what they were signing (this post continues below the document):

22-04-19 Professors' Ac... by Florian Mueller

The heading of the first section is... well... creative:

"ALL IMPLEMENTERS OF STANDARDS THAT THE RELEVANT SSOs PROMOLGUATE ARE INTENDED THIRD PARTY BENEFICIARIES OF THE SSO MEMBERS' FRAND COMMITMENTS" (emphasis added)

There's also a redundancy between the first two footnotes:

"1 Undersigned counsel for amici curiae certify that this brief was not authored in whole or in part by counsel for any of the parties. No party or party’s counsel contributed money for the brief. No other person contributed money that was intended to fund preparing or submitting the brief." (emphasis added)

"2 This brief is submitted under Federal Rule of Appellate Procedure 29(a). This brief was not authored in whole or in part by counsel for any of the parties. No party or party’s counsel contributed money that was intended to fund preparing or submitting the brief. No other person contributed money that was intended to fund preparing or submitting the brief." (emphasis added)

They also say the brief was "opposed" without stating who opposed it (there are multiple appellees here) and why...

The professors' brief does Conti the favor of elaborating on something that footnote 1 of its petition already stated briefly. The professors seek to reinforce Conti's point with the following passage:

"Moreover, based on a review of ETSI public records, Continental Automotive GmbH (CAG), the parent company of Plaintiff-Appellant, is a full member of ETSI and a CAG representative currently serves on ETSI’s Board of Directors. While CAG is not the named Plaintiff-Appellant in this case, Plaintiff-Appellant is ultimately owned by CAG. Thus, for all practical purposes, Plaintiff-Appellant is a member of at least one relevant SSO."

In antitrust cases it's key to pick the best plaintiff from the start. Footnotes in en banc petitions and amicus briefs don't make a party a plaintiff at this stage of proceeding.

I was wondering from the start how Conti seriously thought (and I'm also saying this with a view to its Delaware case against Nokia) that a U.S. subsidiary could somehow secure a global license for a Hungarian Conti subsidiary. Conti's corporate structure is a jungle of nth-degree subsidiaries. If they think that's cool or smart (as opposed to just unnecessary bureaucracy), that's their choice. But they have to streamline things in antitrust enforcement or they'll run into standing issues like here.

The professors' footnote 15 also makes a point that doesn't withstand scrutiny: with respect to the panel's mentioning of Broadcom being a Qualcomm competitor when those two companies had their seminal FRAND dispute, they say "at least one licensor member of Avanci (LG Electronics) is a direct competitor of Continental in the market for TCUs." But LG joined Avanci only a couple of months ago, making it an irrelevant fact in this case, which they conveniently (euphemism intended) omit.

Even if one took that fact into consideration now, it actually serves to show that even automotive suppliers believe that car-level licensing is workable and that Avanci's terms aren't an issue. Chances are that Conti itself would be an Avanci licensor if it had invested in the kind of research and development that is required to build a SEP portfolio. But Conti's management lacked the competence and foresight to make that investment while there was a window of opportunity with a view to (for instance) 4G. Instead, they wanted to free-ride on other companies' R&D spend. LG has the benefit of being not only a licensee but also a licensor of SEPs. Avanci itself is not a cross-licensing club, but LG can sometimes cross-license directly with other companies, and for the purposes of its internal financial planning LG can offset some of its automotive division's inbound licensing costs with revenues from outbound licensing. But that's not the result of foul play. It's because LG invested in that area, unlike Conti, a company that is more than 150 years old and better at making tires than at contributing to telecommunications standards, so it's trying to devalue other companies' SEPs instead of respecting them.

The Fifth Circuit will almost certainly figure out what's going on. The question is just whether those alarmist amicus briefs by automotive companies and "Apploturfers" will result in the waste of time that a rehearing en banc of that fatally-deficient "antitrust" case would represent.

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#FAIL: Tesla, Toyota, Honda file WRONG amicus brief as auto industry, Apploturfers urge Fifth Circuit to resuscitate Continental's 'antitrust' case against Avanci, Nokia, others

Before I forget, let me remind you of next week's Frankfurt Auto IP conference where various of the players mentioned below will be present, some of them even as keynoters and panelists.

Oh my. Tesla, Toyota, and Honda wanted--but failed miserably--to submit an amicus curiae ("friend of the court") brief in support of Continental's petition for rehearing en banc (full-court review) of a panel decision not to revive Conti's self-described 'antitrust' action against the Avanci patent pool and some of its licensors, most notably Nokia. The deadline was a couple of hours ago (midnight Central Time).

The problem is that instead of filing a Tesla-Toyota-Honda brief, they actually attached to their motion a brief that was separately submitted by French industrial conglomerate Thales (this post continues below the document):

22-04-20 Tesla Honda Toyota... by Florian Mueller

The first seven pages of the PDF are Tesla, Toyota, and Honda's motion for leave to file an amicus brief. And then, starting on page 8, there's a "Brief of amicus curiae Thales in support of Plaintiff-Appellant's petition for rehearing en banc" (which Thales filed in its own name, too). Conti itself also misfiled because it failed to comply with the Fifth Circuit's rules (for example, it forgot to provide a statement of facts).

Not only is it uncertain whether the Fifth Circuit will mercifully allow Tesla and its allies to correct their oversight, but there is a serious issue here that cannot be undone:

This misfiling exposes that what was meant to look like broadbased support for Conti is nothing but a coordinated ploy at worst, or an echo chamber at best. The amicus briefs submitted in support of Conti's petition--which would be duplicative enough even without Tesla and its Japanese friends inadvertently having refiled Thales's brief--can be traced back to orchestration by the automotive industry on the one hand and organizations funded by Apple (to advocate the devaluation of standard-essential patents (SEPs)) on the other hand.

Auto + Apploturfers. That's quite an unholy alliance. By "Apploturfers" (Apple astroturfers) I mean essentially the same bunch of Apple-bankrolled organizations that launched the Save Our Standards campaign (they couldn't come up with a more alarmist name, could they?). I recently exposed SOS's highly deceptive advocacy: they sponsored an "interview" with one of their member companies that untruthfully claimed to be a small app developer having issues with SEP owners, when in reality that company never implemented a standard itself, thus never had to license a SEP!

This has become absurd. They keep making themselves ridiculous. And it's not just because of misfilings and astroturfings. The real issue relates to the substance of this (or lack thereof).

Conti's petition and the amicus briefs filed in its support urge the Fifth Circuit to rearrange deck chairs on the Titanic. All that brouhaha about the alleged need for automotive suppliers like Conti to secure exhaustive component-level patent licenses aside, the Fifth Circuit--one of the nation's busiest appeals courts--would just be wasting its time on a rehearing because Conti's complaint is ripe for dismissal on multiple grounds.

The case has had problems from the start. Judge Lucy Koh in the Northern District of California (now, thankfully, on the Ninth Circuit) denied an antisuit injunction and disposed of that case by dumping it on the Northern District of Texas. There, a very experienced judge--Chief United States District Judge Barbara Lynn--dismissed it for two reasons, any single one of which is sufficient in its own right: lack of antitrust standing, and no Sherman Act claims (neither Section 1 nor 2). Conti apparently didn't fully believe in its appeal as it started a parallel and partly duplicative action in Delaware (Chancery Court). After the Fifth Circuit's panel decision, the complaint is even "deader" than before. As I explained, the panel majority held that Conti didn't even have basic Article III standing to begin with. The single judge in the minority joined the majority for what was a unanimous dismissal, but clarified in a footnote that he'd have simply upheld Judge Lynn's decision.

This means that for Conti even to be allowed to conduct discovery, the judges who have previously looked at the matter would have to be overruled in three ways:

1. Article III standing

2. antitrust standing

3. actionable claims under Sherman Act 1 and/or 2

Even if all of that happened (which would frankly amount to a long shot), does anyone seriously believe that Conti could ultimately win this? That a court would ultimately find that Avanci is responsible for most SEP holders declining to grant a certain type of license to component makers, when the key players among them already had that policy long before Avanci was created and--which makes Conti's case completely meritless--Avanci's contracts don't in any way restrict its licensors' ability to extend such licenses? In fact, some Avanci licensors (Sharp, Conversant) have demonstrably granted exhaustive component-level SEP licenses.

Conti is desperately trying to explain with a conspiracy theory what can be adequately explained with long-standing industry practice.

The en banc petition and the amicus briefs place the emphasis on how certain FRAND licensing pledges should be interpreted for all sorts of reasons. But that's the wrong focus.

I've been watching and criticizing this dumpster fire of an "antitrust" case for almost three years. Conti had some contract law claims based on those FRAND declarations. Judge Lynn declined to entertain them after the federal antitrust claims had died. The 5th Cir. panel's casual remark about Microsoft being a member of the relevant standard-setting organizations (SSOs) in its landmark FRAND case against Motorola and about Broadcom being a Qualcomm competitor in another historically important case doesn't change the fact that Conti failed to establish antitrust, not contract law, standing.

If Conti wants to make a contract-law argument, it can do so in that case it brought in Delaware (and which hasn't been a particularly productive effort either, at least so far).

But where's the antitrust injury? How come none of the five judges who have dealt with the case so far--all five of them being really distinguished federal judges--found Avanci's licensing terms quite as outrageous as Conti and its auto-and-Apple amici claim?

There won't be any such harm until some Avanci licensors prevent Conti from supplying its component to its car-maker customers. But they all leave Conti alone. If they ever were to sue Conti, Conti could raise all sorts of defenses. If Conti's customers are licensed (as some of them like Daimler and Volkswagen are), or can elect to take a license, the whole argument comes down to a conclusory allegation that car makers end up paying more--for the same patents used in the same end product--than component makers. Not only is that (as I said) conclusory, but it wouldn't mean Conti gets treated worse than other suppliers, so if anyone had a problem here, it would be the car makers, and patent law provides ways to defend oneself against excessive royalty demands. If amici like Tesla want to pay less, they have every opportunity in their own cases to dispute the reasonableness of certain royalty rates.

Conti has always just talked about indemnification claims in the abstract. It still can't point to a case where a car maker actually had Conti pick up SEP license fees.

The question of whether Conti lacks Article III standing or "only" antitrust (Sherman Act) standing is really academic. Even whether Conti has any kind of standing is not going to make a difference. The petition and all those amicus briefs fail to convince me that Conti could ever win. On one basis or another, that complaint belongs on the federal judiciary's dustbin.

Automotive suppliers are not even consistent when it comes to their stated desire to secure component-level licenses. Case in point, Thales--which is pursuing its own ill-conceived case against Avanci (in Munich)--points in its amicus brief to its litigation with Philips, which is an Avanci licensor. That dispute is not specific to connected vehicles. And that dispute actually shows that Philips wants Thales to take a license, just that Thales isn't prepared to pay what Philips demands.

The Fifth Circuit panel was pragmatic, and that's what I strive to be, too. Avanci has signed up dozens of SEP holders and has licensed dozens of automotive brands. I was skeptical a few years ago, but in the end you can't argue with success. It works. Has the world descended into chaos as a result of this? The automotive industry has its problems. It has to deal with the transition from combustion engines to electromobility, and with a chip supply shortage. SEP licensing is a non-issue for car makers. Some of them just don't like to pay.

At least one of those amicus briefs stresses the enormous economic importance of 5G. And the Save Our Standards brief (ACT | The App(le) Association, CCIA, and HTIA) states how many patents the members of one of those organizations own. When it comes to 5G patents, Avanci has most of the major contributors--with Huawei and Samsung being the only heavyweights missing from the list (for now)--on board. Those who seek to bring down SEP royalty rates and facilitate hold-out by unwilling licensees may very well be innovative in other fields and own a lot of patents. But their contribution to 5G is either next to nil (automotive industry) or very limited (Apple mostly just acquired such patents from the likes of Intel and Nortel) compared to what those Avanci licensors like Ericsson, Qualcomm, Nokia, and that rising star named OPPO--have brought and continue to bring to the standard-setting table.

If the Fifth Circuit figures out that those amicus briefs are just a campaign that doesn't make Conti's case any more meritorious, then it's possible that the court won't even have to hold a vote.

While this is also unrelated to the merits, I did want to mention something in closing. The Alliance for Automotive Innovation, which claims that its members make 98% of all cars sold in the United States, and the German VDA (Association of the Automotive Industry) submitted a brief that lists one of this blog's recent articles in its Table of Authorities. Below you can find a screenshot of that passage followed by the actual document.

22-04-20 VDA AllianceAutoIn... by Florian Mueller

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Neo Wireless expanding patent enforcement campaign to automotive: actions filed against Ford, Honda, VW, Nissan, GM, Tesla, Toyota with five U.S. district courts

This is the third standard-essential patent (SEP) post in a row. The previous ones discussed patent assertions by some unnamed MPEG LA licensors against their former partner Samsung and some rather interesting developments surrounding Nokia v. OPPO/OPPO v. Nokia.

Non-practicing entity Neo Wireless LLC put itself on the map of U.S. patent litigation through its mid-January filings against Apple, LG, and Dell. As Apple Insider reported, the infringement allegations in the complaint against Apple alleged that Neo Wireless held patents essential to the 4G/LTE and NR/5G cellular telecommunications standards.

Neo has now filed a slew of lawsuits against car makers:

• Eastern District of Texas

  • General Motors Company

  • Tesla

  • Toyota

• Eastern District of Tennessee: Volkswagen Group

• Middle District of Tennessee: Nissan

• Southern District of Ohio: Honda

• Western District of Missouri: Ford Motor Company

The Eastern District of Texas has tremendous expertise in adjudicating patent disputes; the other districts--with the greatest respect--don't. It will be interesting to see whether any venue transfer motions will succeed and/or whether any of those cases will get consolidated.

Neo is not an Avanci licensor, and will likely seek damages that on a per-patent basis dwarf the cost of Avanci license. Some automakers already have that problem with Intellectual Ventures, which is asserting a mix of standard-essential and non-standard-essential patents (1, 2).

Only one of the defendants is a publicly-known Avanci licensee: Volkswagen. Tesla has been rumored to be one ever since multiple enforcement actions by Avanci licensors were withdrawn near-simultaneously in different jurisdictions. The other defendants are presumably among the companies Member of the European Parliament Alfred Sant had in mind when he asked the European Commission three questions concerning the distortion of competition because of some car makers having taken an Avanci license while their competitors from outside of Europe largely haven't.

The asserted patents largely overlap between the different cases, but are not always the same. For example, four of the six patents-in-suit against Toyota are also among the five patents asserted against Apple, but two are not.

The claimed inventions were apparently made by Chinese individuals, but Neo Wireless is a U.S. entity. There was or is another company named Neocific that temporarily owned some or all of those patents.

Finally, here are two sample complaints: the E.D. Tex. one against Toyota and the W.D. Mo. lawsuit against Ford.

22-03-29 Neo Wireless LLC v... by Florian Mueller

22-03-29 Neo Wireless LLC v... by Florian Mueller

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Japan's IP Bridge--an Avanci licensor--is suing Volkswagen in Munich while Japanese car makers run PR campaign against Avanci's patent licensing terms

A spokeswoman for the Landgericht München I (Munich I Regional Court) has just confirmed to me that Volkswagen will have to defend itself in that court on November 10, 2022, against patent infringement case no. 7 O 16858/2 (Presiding Judge: Dr. Matthias Zigann) over EP2294737 on "control channel signalling for triggering the independent transmission of a channel quality indicator."

EP'737--which has been declared essential to the 4G/LTE standard--was originally filed by Panasonic and assigned to Japan's national patent licensing entity IP Bridge, which previously brought cases against other companies over this patent, all of them in Munich:

• Daimler would have had to defend itself later this month, but took an Avanci license, which presumably put that dispute to rest.

• In October I found out about an IP Bridge v. Ford Munich case over this patent.

Volkswagen has a 3G Avanci license for its volume brands (and 4G only for premium brands like Porsche, Audi, Lamborghini). In Volkswagen's own country, 3G has already been switched off. Acer sued Volkswagen in the Eastern District of Virginia (traditionally a "rocket docket" for patent cases) because a 3G license is not a defense to 4G infringement any more than you could buy the cheapest Golf, return to the store, and steal an ID4. Now, with IP Bridge suing Volkswagen in Munich, the pressure is increasing on Europe's largest automotive group to upgrade its license.

This newly discovered litigation once again confirms that Munich is the automotive patent enforcement hotspot: just yesterday I reported on a couple of Sisvel v. Ford cases in Munich (Sisvel, too, is an Avanci licensor). Mannheim continues to be a major automotive patent venue, where almost-wholly-owned Volkswagen subsidiary Audi is being sued (in case no. 7 O 132/21; Presiding Judge: Dr. Peter Tochtermann) over German Patent DE102009060504 on "a circuit and method for adjusting an offset output current for an input current amplifier" with parallel litigation pending in the U.S., also against parent company Volkswagen).

About ten years ago, when European policy makers were discussing where to set up the different appellate divisions of Europe's Unified Patent Court, it was part of the consideration that Munich might be a suitable venue for automotive patent cases. At the time, however, different types of patents than cellular SEPs were on the agenda.

Japanese companies like Sony, NTT, and Panasonic hold a significant number of cellular SEPs, and seek compensation from car makers, particularly through the Avanci pool which provides a one-stop solution: a license to roughly four dozen SEP portfolios. But Japanese car makers Toyota, Honda, and Nissan still appear to be adamantly opposed to the Avanci licensing model, despite car makers in other countries increasingly having embraced the pool licensing option.

On Tuesday, Nikkei Asia published an article with the headline Qualcomm, Nokia demand patent fees from Toyota, Honda and Nissan, but mentions right below the headline that "48 companies including [Japan's own] Sony, NTT join move to seek $15 for each connected car."

The following passage on Toyota is...well, interesting:

"Toyota aims to sell 10.29 million vehicles across the group in the fiscal year ending March 2022. If all of its cars were equipped with communication devices and used the patents, it will have to pay about 18 billion yen, or 0.7% of its expected consolidated net profit for the same period."

This makes it sound that the end of profitability justifies the means of patent infringement. Patent license fees are a small part of the cost of making cars, while the value of connectivity to drivers as well as the industry itself (maintenance etc.) increases almost evey day. If Toyota has a profitability issue with a $15 license to four dozen SEP portfolios, it might have to look for other ways to increase its margins.

Daimler wasted millions and millions defending itself against patents it could have licensed at a fairly low cost. That Nikkei article appears to indicate that Japanese car makers have not learned a lesson from the outcome of Daimler's efforts. As long as they aren't licensed, the likes of Toyota will at some point be slapped with SEP infringement actions in Munich, too. That's just the way it goes.

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Intellectual Ventures predicted 'IP reckoning' for auto sector, then filed patent suits against General Motors, Toyota, Honda in Texas--even involving a former Daimler patent

This is the third post with an automotive industry topic in a row. On this occasion, I'd like to mention that I plan to attend the afternoon panels of the Auto IP Europe conference hosted by IAM in Munich on November 2, and point you to my two previous automotive posts:

• EU competition chief's tough talk on cartels doesn't bode well for automotive SEP licensing negotiation groups

• L2 Mobile Technologies claims Qualcomm chips in Ford, Lincoln cars infringe 3G standard-essential patents originally obtained by ASUSTeK

The automotive industry must license more patents. Some patent holders are patient because they recognize that car makers are relatively new to the wireless patent licensing business--but that doesn't mean everyone will wait forever. On October 13, IAM published an opinion piece by Arvin Patel, the COO of non-practicing entity Intellectual Ventures ("IV"): "Why the auto sector is heading for an IP reckoning" (paywalled)

IV is not going to take the alleged wholesale borrowing of technology in the connected-car era anymore. On October 19, less than a week after that op-ed, IV filed patent infringement complaints against General Motor in the Western District of Texas (over 12 patents), and against Toyota and Honda in the Eastern District of Texas (over 11 patents each).

Let me show you the GM complaint as am embedded document (ths post continues below the document):

21-10-19 Intellectual Ventu... by Florian Mueller

I've also uploaded the Toyota complaint and the Honda complaint to Scribd.

These are the patents-in-suit:

1. U.S. Patent No. 6,832,283 on a "method for addressing network components"; originally filed by Daimler; asserted against all three defendants

2. U.S. Patent No. 7,382,771 on a "mobile wireless hotspot system"; originally filed by In Motion Technology, a company that Sierra Wireless acquired in 2014; asserted against all three defendants

3. U.S. Patent No. 7,484,008 on a "apparatus for vehicle internetworks"; same family as '004 patent; asserted against Toyota

4. U.S. Patent No. 7,684,318 on "shared-communications channel utilization for applications having different class of service requirements"; asserted against all three defendants

5. U.S. Patent No. 7,891,004 on a "method for vehicle internetworks"; same family as '008 patent; asserted against GM and Honda

6. U.S. Patent No. 8,811,356 on "communications in a wireless network"; asserted against all three defendants

7. U.S. Patent No. 8,953,641 on "methods and apparatus for multi-carrier communications with variable channel bandwidth"; asserted against all three defendants

8. U.S. Patent No. 9,232,158 on "large dynamic range cameras"; asserted against all three defendants

9. U.S. Patent No. 9,292,475 on a "device, system and method for controlling speed of a vehicle using a positional information device"; asserted against all three defendants

10. U.S. Patent No. 9,602,608 on a "system and method for notifying a user of people, places or things having attributes matching a user's stated preference"; asserted against all three defendants

11. U.S. Patent No. 9,681,466 on "scheduling transmissions on channels in a wireless network"; from a patent family originally obtained by IPWireless, a company that General Dynamics acquired in 2012; asserted against all three defendants

12. U.S. Patent No. 9,934,628 on a "video recorder"; asserted only against GM

13. U.S. Patent No. 10,292,138 on "determining buffer occupancy and selecting data for transmission on a radio bearer"; from a patent family originally obtained by IPWireless, a company that General Dynamics acquired in 2012; asserted against all three defendants

I find it very interesting that even Daimler apparently divested IP assets to non-practicing entities. Daimler itself gets sued by NPEs all the time now, and can't credibly complain about any NPE's business model...

The complaints do not describe any patent as standard-essential. Reference to WiFI and 3GPP standards like LTE is made, and three of them have been declared essential to LTE according to IPlytics. For the vast majority of the patents-in-suit, standard essentiality can be ruled out just based on what techniques those patents cover.

Even though the profile of IV's patents-in-suit is, therefore, rather distinct from the types of patents in the Avanci pool, it is interesting that patent holders (SEP and non-SEP holders alike) appear less likely to sue Avanci licensees. IV is not an Avanci licensor, so it could even assert SEPs against Avanci licensees.

For SEP holders that are not Avanci licensors there is a serious issue if they sue Avanci licensees: those patent holders tend to seek far higher royalties relative to the value and size of their portfolios, and defendants would then point to the Avanci rate on a per-patent basis as a comparable license (the "ND" ("non-discriminatory") in "FRAND"). Anyone can point to Avanci's published royalty rates--but someone who doesn't even want to license patents at that rate just comes across as an unwilling licensee or even as an unrepentant infringer.

If a non-SEP case is put before a jury, U.S. judges might not accept a SEP pool rate as a relevant point of reference on patent valuation--but at a minimum the judges can see that the defendant is, in principle, a willing licensee. That, in and of itself, has value.

Another possibility is that companies with an Avanci license are also more likely to reach a negotiated agreement with other licensors.

I'll keep an eye on automotive patent infringement cases, and will pay attention to whether there is a pattern of Avanci licensees being sued less than non-licensees.

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