Context: Earlier this month, Huawei announced a standard-essential patent (SEP) license agreement with global smart meter market leader EDMI, which had previously also taken a license from the Avanci Smart Meter pool (April 11, 2024 ip fray article). Such license deals are important not only in commercial but also political terms, as the emergence of IoT is used as an argument for legislative intervention concerning SEPs.
What’s new: On Linked, Avanci today announced a license agreement with Diehl (April 22, 2024 LinkedIn post by Avanci). On its corporate website, Diehl describes itself as “a globally active German technology enterprise headquartered in [Nuremberg] … [w]ith approx. 16,600 employees worldwide [and] annual sales of 3.5 billion euros.”
Direct impact: With two officially announced licensees (both of them very significant players in the smart meter industry), while no other joint licensing program serving that industry has announced even a single license agreement, Avanci may have taken an early lead in the field (also considering that it has more than 40 licensors). Bilateral licensing has also produced some results already.
Wider ramifications: Policy makers should take note of the fact that SEP licensing in the IoT space is working while litigation is hard to come by. It is definitely appropriate to keep an eye on the field such as to identify potentially abusive practices (such as imposing supra-FRAND royalties on small and medium-sized enterprises). But there is no evidence, for now, of an acute IoT SEP crisis.
Those calling for transparency in SEP licensing often suggest (at least between the lines) that SEP holders and pool administrators don’t want to disclose, when in reality it is often the licensees who insist on confidentiality. In fact, a licensor or pool typically stands to gain more from an announcement.
With EDMI and Diehl, Avanci Smart Meter has so far announced two licensees: the smart meter market leader and a second fairly large player. While the number of potential licensees is obviously far larger, those two announced licensees are enough to make Avanci Smart Meter an early leader in the field. There is a narrowband IoT pool run by another administrator, and it hasn’t announced a single licensee to date (instead, at least one smart meter maker, EDMI, bypassed that pool by taking a bilateral license from Huawei).
If two or more pools seek to serve a certain group of implementers, and one announces its licensees while the other one doesn’t, the more transparent one gets the benefit of coming across as a winner.
Assuming that Avanci Smart Meter is indeed the only cellular IoT pool to have entered into license agreements with implementers (at least with respect to small IoT devices, as connected vehicles or EV charging stations are arguably also IoT products), this also raises the question of whether the market is more interested in full 4G licenses than in narrowband IoT. But that is not certain yet, given that the announcement of Huawei’s license agreement with EDMI mentioned three narrowband standards.
It’s still early in the game. There may be a trend, but a sample size of two is not yet statistically reliable.
The numbers are far higher when it comes to Avanci’s automotive SEP pool. As an Avanci executive announced a few days ago on LinkedIn, the original 4G pool is now approaching 100 licensees. Iseki, a Japan-based manufacturer of farming and landscape machinery, licensed both Avanci 4G and Avanci 5G.