The 5G Vehicle SEP Program – Episode 25
Watch on YouTube
Guest:
- Laurie Fitzgerald, Avanci Vehicle
Laurie has over a decade of experience working with patent owners and product developers, spanning licensing transactions, patent acquisitions and divestitures, portfolio strategy and valuation, and patent litigation. A regular conference speaker, Laurie features in the IAM Strategy 300 list of leading IP professionals and World IP Review’s Most Influential Women in IP. At Avanci Vehicle, Laurie has driven the platform’s expansion to cover more than 80 automotive brands and licensors responsible for most 3G/4G cellular SEPs. She is responsible for all aspects of Avanci Vehicle operations and is currently working to build its latest program to cover the next generation of connected vehicles. Prior to Avanci, Laurie led its affiliate Teletry, licensing BlackBerry’s extensive patent portfolio to smartphone and telecom infrastructure manufacturers.
In the podcast, Tim and Laurie enter a wide-ranging conversation about the latest 5G Vehicle SEP Program that Avanci has recently launched. With the 5G Connected Vehicle Licensing Program, Avanci announced the first licensee: Mercedes. A month later, the second licensee, BMW, joined, and Laurie promised that we should stay tuned for further announcements of new licensees to join. The program came with some delays but an impressive list of SEP licensors. Laurie elaborates on the complexities of the negotiations both with SEP licensors and the automotive OEMs. Here, the focus was to ensure that the new program was only launched when a critical mass of SEP licensors was confirmed. With Samsung and Huawei joining compared to the 4G program, everyone finally felt it was time to launch this.
Laurie went back and explained that Avanci had come a long way from the time during the 4G program when Avanci only had 11 SEP licensors, and BMW was the only automotive OEM who signed. Back then, the second automotive OEM joined only 16 months later, and it took Avanci a lot of convincing during that time. Today, presenting a total of 58 SEP licensors at launch, and as to the IPlytics estimation of a 3G, 4G, and 5G multimode SEP coverage of 80-85%, the Avanci offer looks much more convincing, and the second licensee, BMW already joined four weeks after launch when Mercedes joined. If OEMs join within the next six months (or before they ship their first 5G vehicle, whichever is later), they will get access to all members’ cellular SEPs for a discounted rate of $29 per vehicle. After the 6 months, the rate increases to $32 per vehicle for late joiners. The new royalty rates may be discussed with at least some controversy, however. Compared to the initial $15 for the 4G program, the new $29-$32 rates for 5G may seem like a stretch. Laurie, however, argues that they started off with $15 with only 11 SEP licensors and, as to the IPlytics estimation, only a share of about 30% of all SEPs back then. Considering the increasing number of Avanci members, SEP coverage, and adding 5G, a much more advanced technology to the program, the $29-$32 price looks more reasonable. Laurie further elaborates that the price is the outcome of her team’s negotiation with SEP owners and automotive OEMs over the past years. Again, critical voices say that such a rate is only reasonable for premium brands like Mercedes or BMW, who now also signed up first. Laurie, however, argues it’s only fair that everyone pays the same, we create a level playing field, and car makers with low-priced cars can always only select some of the low-priced options starting at 3$ for only eCall.
Joining the program early has not only the advantage Laurie says to guarantee the low rate at $29, but it also ensures to be protected early on as the Avanci license is sticky. Once you sign up with Avanci and the Avanci members sell their patents e.g. to Patent Assertion Entities (PAEs), these patents can not be asserted to anyone who was a member of Avanci when the patents were yet owned by one of the Avanci.
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