Context: We are witnessing a SEPtacular period. There’s an unprecedented density of standard-essential patent (SEP) news over the course of just seven days. A half-dozen of major SEP disputes (Panasonic v. Xiaomi, Panasonic v. OPPO, InterDigital v. OPPO, Nokia v. HP, Access Advance licensors v. HP, Access Advance licensors v. TCL) settled out. A new one – between ZTE and Lenovo – surfaced. The UPC held its most important SEP trial to date: Huawei v. Netgear (October 30, 2024 ip fray article). And today, the European Commission’s Directorate-General for Competition (DG COMP) will participate, through outside counsel, in an appellate hearing in Munich (VoiceAge EVS v. HMD). All of the above is related to litigation. ip fray in fact strives to be the world’s leading patent litigation website and prides itself on being read by many judges and litigators around the globe. But most patent license deals, and particularly most SEP license deals, are still reached without any litigation. That applies, without exception, to each of the licensors mentioned in this very paragraph.
What’s new: Yesterday, Avanci announced the addition of electric-vehicle charger maker ADS-TEC Energy to its EV Charger program (October 30, 2024 Avanci press release). Not a single lawsuit related to that licensing program is known.
Direct impact: That program has attracted “four licensees and 46 licensors in less than a year from launch.”
Wider ramifications: The fact that this optional one-stop solution is increasingly adopted calls into question the criticism leveled by SEP devaluation advocates lobbying for legislative intervention or by less successful market actors who prefer to talk about the market landscape rather than disclose their own licensees, of which they would have plenty if their rates were as attractive as they claim.
The press release contains a quote from the latest Avanci EV Charger licensee:
Michael Rudloff, COO at ADS-TEC Energy said “Avanci has made it simple to license our connected chargers, allowing us to focus on delivering intelligent solutions for our customers.”
That is exactly what someone says after taking a license for convenience, not as a result of coercion. Avanci made his company an offer, and the value proposition was more attractive than dozens of bilateral license agreements.
ADS-TEC joins its competitors GARO, Easee and Eaton in taking this pool license.
Avanci sponsored an article by EV marketing consultant Bill Pierce, How Cellular Connectivity Is Helping to Transform EV Charging (link to article). The article mentions that in the National Renewable Energy Laboratory’s (NREL) estimation, the United States will need about 28 million charging ports by the year 2030, much of which demand will be met by private chargers such as at single-family homes.
If an EV charger is used only by its owner, there is no need for cellular connectivity. If, however, a charger is made available to third parties, then it must be able to charge not only the car but also the customer. And that’s where data must be transferred. In the vast majority of situations, a fixed-line internet connection is not the most cost-effective solution. 4G is usually the sweet spot at this point.
Consultants Robert Pocknell and Graham Bell recently wrote a 16-page paper on Electric Vehicle Smart Charging and Standard Essential Patents (SEPs). Their objective: persuade policy makers to regulate SEP licensing and weaken SEP enforcement to help small and medium-sized enterprises (SMEs). In order to make that point, they try to make up serious issues facing EV charger makers and to portray the state of affairs as a threat to the transition to the green energy.
Can they point to any SEP assertions against EV charger makers? No.
They talk about license fees and suggest that those render it impossible to profitably make EV chargers. But it’s a vibrant marketplace. The authors focus on the allegedly low cost of an EV charger compared to a car so as to suggest that EV chargers should be licensed at a lower cost. They miss an important point: as stated further above, an EV charger doesn’t need cellular connectivity except for billing. But if cellular connectivity is used for billing, then there are significant revenues generated over that wireless connection, and the alternative (a fixed-line connection) would almost always be more expensive. Wherever fixed-line connectivity is available at a low cost, everyone remains free to make use of it and then doesn’t need an EV charger with wireless connectivity.
Their focus on Avanci is probably due to the fact that they don’t have any other data points. Avanci publishes its rates and lists its licensors as well as its licensees. No one should be blamed, or picked as a target of misplaced criticism for being transparent.
That also applies to what other pool administrators say in public. It is a bit odd that Sisvel, which actually licenses its own cellular SEPs through Avanci’s automotive licensing program, describes its own cellular IoT licensing terms as a “good deal” based on a comparison to Avanci’s rate (October 16, 2024 Sisvel corporate blog post). If one reads the article closely, it actually makes it clear that Avanci and Sisvel operate rather different IoT pools that can’t be compared. And in any event, neither could be used as a substitute for the other: the alternative to either one is that an implementer enters into a bilateral license agreement with each and every licensor. Some limited overlap among licensors doesn’t help, and it’s actually (as Sisvel’s article acknowledges in the fine print) meaningless if their technical fields of use are different.
Sisvel ignored the old adage that you can’t argue with success. Unlike Avanci, which announces its licensees (such as ADS-TEC Energy), Sisvel rarely ever names them. It’s hard to come up with a good reason for it. The plausible explanations are negative in different ways. Is it because they don’t want to be transparent? Or because they don’t have enough and it would reflect poorly to admit it? If a pool never names any licensee, it can’t even be ruled out it doesn’t have any. That’s why they should focus on talking about their licensees rather than other pool administrators with apples-to-oranges comparisons that prove nothing and only raise the question of whether someone’s feelings have been hurt by the fact that a much younger player is now so much more successful and influential, and has been so extremely good at attracting an all-star team of high-profile licensing executives.