As wireless communication technology expands across industries, it is being utilized in various industrial applications such as connected cars and IoT. Accordingly, it is expected that consideration of standard essential patents (SEPs) in future product development and design will be important to prevent risks such as lawsuits and disputes.

Standard-Essential Patents (SEPs) are patents that have been registered for technologies related to standard-essential technologies that make it impossible to manufacture, sell, or service a product without using the technology. They are standard patents certified by international organizations such as the ISO (International Organization for Standardization), IEC (International Electrotechnical Commission), and ITU (International Telecommunication Union). The key is that it is impossible to design around the patented technology, making it impossible to produce related products without using the patented technology.

There is a problem with SEP, as there are quite a number of patent holders, that it is difficult to contact them individually and negotiate costs, etc. Accordingly, the number of cases of concluding SEP usage agreements through IP licensing platforms is increasing.

According to Avanci, which operates an IP licensing marketplace, there are over 100 million connected cars that use SEP-related communication technology through Avanci, and over 85% of all vehicles sold have been licensed.

The Avantchi platform formed partnerships with five major telecommunications technology companies, including Qualcomm and Ericsson, which possess 2G~4G communication SEPs, in 2016. Since then, domestic telecommunications companies, including LG Electronics, KT, and SK Telecom, which possess a significant amount of 5G technology, have also joined the patent pool, and currently, 52 licensors and more than 80 automobile brands are working with Avantchi.

“An integrated patent solution can provide cost visibility and predictability, prevent unnecessary disputes, and improve cost uncertainty and negotiation time/process efficiency in bilateral contractual relationships,” said Bing Zhao, AVANTI Asia PR Director.

Avantchi has set licensing costs at around $20 per connected car for 4G licensing using a flat-rate royalty calculation method, which simplifies the process by eliminating negotiations between the two parties and provides visibility and predictability.

Recently, the company signed a licensing agreement with Hyundai and Kia Motors in Korea, and in September of last year, it signed a licensing agreement with Honda of Japan, so it is evaluated that it has made significant inroads into the global automobile ecosystem.

Beyond connected cars, Avante plans to apply 5G and 6G communication technologies and enter the IoT ecosystem as its next steps. Bing Zhao, head of PR for Avanchi Asia, said, “We are in licensing discussions with patent holders to provide next-generation 5G patent pool services,” and “We are in discussions to provide solutions to IoT manufacturers.”

Meanwhile, Avant announced in August that it had appointed global IP leader Marianne Frydenlund to lead the development and implementation of new IoT-related programs. She is said to have previously worked as senior vice president of legal and compliance at Nordic Semiconductor, where she was responsible for managing patent licenses.