Last month capped a big year for Avanci, the platform dedicated to licensing wireless SEPs to connected vehicles and other Internet of Things (IoT) verticals. As this blog reported on the company’s first agreement (with BMW) and its disclosure of royalty rates topping out at $15 per car for 4G, we also noted that the newest member of the alliance was IP Bridge, Japan’s sovereign patent fund.
I recently caught up with IP Bridge executive vice president and CIPO Duke Ogata and we talked through the fund’s decision to throw its lot in with Kasim Alfalahi’s team, and how it fits into their long-term strategy. He was very clear about what signal the decision should send to the market, both inside Japan and outside: “IP Bridge has always tried to promote innovation in the Internet of Things. We don’t want to be an obstacle to spreading or disseminating IoT technologies. That was our motivation to join”.
IP Bridge looks after three key portfolios – one in semiconductors, one in wireless SEPs and a slightly smaller collection of HEVC video codec SEPs. In 2017 the company publicly announced two ‘major’ licencees to the wireless SEP portfolio, though it did not disclose their identities. Ogata says that the team’s efforts have focused on manufacturers of mobile devices thus far, and efforts to do deals with automotive suppliers had not yet begun in earnest.
Turning that task over to Avanci was a simple practical choice that will reduce transaction costs on all sides, Ogata says. The team at IP Bridge largely derives its expertise from the wireless industry, not the automotive world, and they will continue to focus their efforts on device makers. Avanci, by now, has been in at least preliminary discussions with most of the big players in the vehicle sector. Its announcement of a licence with BMW shows that that effort is bearing fruit – Ogata notes that negotiating a wireless patent licence directly with a carmaker rather than a supplier would have been “unthinkable” not so long ago.
The patent policy apparatus in Japan is very focused on wireless SEP issues right now, with the JPO preparing guidelines on FRAND licensing for release in 2018. Most industry insiders say the JPO’s concern over SEPs mirrors that of the country’s formidable auto sector, which was evidently the driving force behind an effort to bring in a compulsory licensing system for SEPs last year. IP Bridge’s sign-on to Avanci alongside compatriots Panasonic, Sharp and Sony is a signal to policymakers that another big component of domestic corporates see potential for achieving efficient FRAND outcomes through an industry-led platform effort. European Commission regulators appeared to endorse this type of approach in their recent communication, and smart money now says Japanese authorities will too.
NTT DoCoMo and NEC are two of the major Japanese players missing from the Avanci roster. IP Bridge’s arrival represents not just inroads in Japan, but also in the non-operating sector. In a recent iRunway analysis, IP Bridge was the third biggest player in 4G-LTE SEPs after InterDigital and PanOptis. The former was an early Avanci adopter and the latter is now part of the broader Marconi Group.