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Patent platform Avanci has announced the launch of its 5G Connected Vehicle Program. This program includes 58 Standard Essential Patent (SEP) licensors and its first named licensee, Mercedes-Benz. The program has been highly anticipated in the market, with Avanci hinting at its launch in early 2022. The list of SEP licensors is extensive and includes notable company Huawei, which is considered one of the largest cellular SEP holders and a supplier for the auto industry. Huawei’s decision to join Avanci indicates a move towards a one-stop shop for SEP licensing. Oppo, another participant in Avanci’s 4G program, has not yet joined the 5G program.

The Avanci 5G program holds a significant number of patents, with an estimated share between 80% to 83% of all 2G-5G granted and active patents. This data, gathered from the IPlytics Platform, demonstrates the program’s potential to become a comprehensive solution for licensees in need of access to relevant SEPs. However, it should be noted that there are still some patent owners, such as Oppo/Vivo, Xiaomi, Apple, ETRI, and others, not included in the Avanci program who may potentially enforce their patents through Patent Assertion Entities (PAEs).

The launch of the 5G program is a positive development, but it brings challenges. The new royalty rate for automotive OEMs joining the program will be the biggest hurdle to overcome. If OEMs join within the next six months or before shipping their first 5G vehicle, they will receive a discounted rate of per vehicle. After six months, the rate increases to per vehicle. While the automotive industry will benefit from the program’s high SEP market share, the new royalty rates may spark controversy.

Avanci’s success is evident, having started with only seven licensors and a SEP share of under 30% in its initial 4G program. With an increased number of SEP owners and a share of declared patent families exceeding 80%, the price increase for the 5G program can be justified. However, it remains to be seen how quickly Avanci can attract the automotive industry to join before the rate for new licensees increases on February 16th, 2024.

Overall, Avanci’s launch of the 5G Connected Vehicle Program is a significant milestone, and its success will undoubtedly shape the SEP licensing market for both licensors and licensees in the automotive industry.

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