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At least 27 technology companies and carmakers have come together to write a letter to the European Commission (EC) urging it to redress the abuse of patents that, according to this coalition, is hampering the development of autonomous vehicles and other IoT (Internet of Things) devices.
According to the pertinent reports, Apple (NASDAQ:AAPL), Cisco (NASDAQ:CSCO), Daimler (ETR:DAI), BMW (ETR:BMW) and a host of other companies have asserted in the letter that they are being denied fair access to licenses for essential patents that form the foundation of communication between IoT devices. This obstruction, according to these companies, “increasingly undermines the competitiveness of these important highly innovative industries, and is already harming technological innovation in Europe”.
The letter, that has been dispatched to the EC President Ursula von der Leyen along with the commission members Margrethe Vestager and Thierry Breton, states that:
“The practice of some [standard essential patent] owners to grant licenses only to certain companies . . . prevents companies across the internet of things and related innovative technology industries from planning investments in R&D. This practice stifles innovation, discourages new market entry, and ties suppliers to established customers. As a result, European businesses and consumers may pay higher prices than they would pay in a more competitive market.”
The letter’s 27 signatories – that includes household names such as Ford (NYSE:F), Dell (NYSE:DELL), Lenovo (HKG:0992) and more – claim to have invested over €45 billion in research and development and collectively hold over 200,000 patents, including standard-essential patents (SEPs) as well as those pending approval.
It should be noted that access to standard-essential patents is considered a crucial requirement for technological progression and that regulators generally encourage their proliferation through fair, reasonable and non-discriminatory licensing in order to ensure that existing competitors, as well as new entrants, retain seamless access to these fundamental nodes of innovation.
According to these companies, they are being forced to pay hefty royalties for the usage of fundamental patents related to vehicle-to-vehicle communication, navigation and autonomous driving systems which form the backbone of the emerging trends in the electric vehicle and IoT industries.
Although the letter does not specifically name Nokia (HEL:NOKIA), the impetus for this step was provided by the Finland-based tech giant when it refused to provide patents pertaining to autonomous driving following a collective complaint lodged with the EC by Daimler, the German electronics company Bury Technologies, German automobile parts manufacturer Continental (ETR:CON), France’s Valeo (EPA:FR), and the chipmaker Gemalto against Nokia for demanding hefty fees for some of those patents.
As a refresher, Nokia already has a long-running dispute with Apple on this subject. The Finland-based company even sued the iconic iPhone maker in 2016 for 32 alleged infringements of its intellectual property. In retaliation, Apple ordered the removal of Nokia-backed Withings products from its online store.
The EC is currently conducting an investigation on this matter while Nokia, for its part, has dismissed these allegations. Perhaps anticipating an adverse decision by the EC, Nokia announced in November that it was working with Daimler and the other complainants to amicably resolve this dispute.
Who do you side with in this dispute? Let us know your thoughts in the comments below.