Orange joins Avanci, but the IoT patent pool has a tough ride ahead

The Avanci patent licensing group, originally founded by Ericsson, has announced that Orange has joined the pool, bringing the membership count to 31.

While the remit for Avanci was to make licensing of IoT technologies easier and less prone to litigation, a couple of years of malicious litigation have darkened the mood in the industry. When Avanci finally starts to swing the hammer, it could to be very poorly received.

Collectively, the 31 companies are contributing their intellectual property to a pool, and then working out how much each piece of IP is worth to any given technology. Then,  Avanci can pursue other companies for payments, distributing these earnings to the members according to that internal valuation breakdown.

Given that the emergence of mass market IoT has been so slow, the last thing this sector needs is Avanci opening legal hostilities against start-ups (restricting innovation) or even large corporations (long-winded trials which could slow the market further).

Hardware patents are one thing, but software patents are, on the whole, rather spurious. In an age where open source is surging in popularity, particularly in the networking and cloud computing sectors, a sufficiently litigious entity would push companies closer to these open source opportunities.

We have no way of scrutinizing the IP involved in this patent pool, and so for many, the first time they will be able to assess the validity of the patents may be when they are tested in a courtroom.

“Joining the Avanci licensing platform illustrates our desire to value all our investments, intellectual property included. In the development of 5G technologies to the closest industrial applications and their ecosystems, connected cars areas and IoT are among the most promising,” said Lyse Brillouet, VP of IP and licensing at Orange.

Avanci is billing itself as a marketplace – a one-stop shop where companies can pay to harness these valuable technologies in their own offerings. However, it is selling a licence to a group of technologies, rather than an actual commodity. Selling licenses to software-related technologies looks somewhat risky in this current climate.

Like most pools, the group claims that “by streamlining the technology sharing process, Avanci is accelerating the growth of the IoT, but providing IoT manufacturers with an efficient and transparent way to access the wireless technology needed to bring their products online”.

Surely charging no royalties or licenses would be a better way to accelerate the IoT? Avanci’s platform might indeed be a better way of licensing, but will its large members tie everyone up in embargos, injunctions, and hundreds of hours of very expensive lawyering? Nor is it clear how Avanci plans to settle disputes between its own members – many of which have already sued each other in the past over claims of patent infringement and intellectual property theft. How do those arguments get settled, and further, how do those parties put on a united front if Avanci decides to go after someone else for offering a similar-enough technology?

“Orange’s participation – along with the participation of eight more network operators in seven countries — demonstrates Avanci’s shared commitment with the telecom industry to simplify the patent licensing process for the automotive industry and make standardized technology more widely available,” said Kasim Alfalahi, founder and CEO of Avanci. “Our one-stop marketplace is transforming the licensing landscape by providing a solution that balances the interests of patent owners and automotive licensees. This makes licensing more efficient, increases transparency, fosters continued innovation, and streamlines technology sharing for everyone involved.”

Founded by Ericsson, and led by its former IP and licensing head, Avanci now consists of: Airscale, Asus, BlackBerry, BT, China Mobile, Conversant Intellectual Property Management, DT Mobile, NTT Docomo, Ericsson, Fujitsu, HPE, Intellectual Discovery, InterDigital, IS, IPBridge, KPN, NEC, Nokia, NTT, Orange, Panasonic, Panoptis, Qualcomm (very notable, given its historic tendency to license its IP outside of such pools), Sharp, Siemens, SISVEL, SK Telecom, Sony, T Mobile, TNO, Unwired Planet, Vodafone and ZTE.

Notably, Avanci lists some licensees now, all in automotive – Audi, Bentley, BMW Group (including Mini), Rolls Royce, MAN, Porsche, Saab, Seat, Skoda and Volkswagen.  Connected Cars was one area that Avanci set out to target, and so getting four customers there is a positive. However, the other targeted sectors are empty so far – which should be a big concern, given the relative maturity of smart metering and connected homes. At launch, Avanci talked of tackling these first before expanding into other IoT markets, but progress appears to have been very slow.

Similarly, the Chinese market was always a concern for Avanci, and China Mobile joining in March 2019 might have initially been an encouraging sign. But with no other Chinese members forthcoming, expansion into that territory could easily stall. This would leave Avanci looking to tackle smart metering and smart home vendors, and there are some pretty big names in those markets that won’t take too kindly to such strong-arm incursions.