Patent Guidelines Put Tech Firms, Carmakers on Collision Course

Rival proposals for European patent guidelines covering technology vital for building self-driving cars and Internet-linked vehicles have set tech firms and carmakers on a collision course.

The differences between firms such as Qualcomm and Nokia and vehicle manufacturers like BMW and Daimler over patent terms raises the prospect of legal challenges and antitrust suits, which have emerged in other industries that depend on access to technology.

In May, a US court told Qualcomm to overhaul its business practices for illegally suppressing competition in the smartphone chip market by threatening to cut off supplies and extracting excessive licensing fees.

Tech firms and carmakers have outlined their positions in two diverging sets of guidelines relating to the way licensing fees are calculated and the terms for using patented technology.

Both sets of guidelines have support from the European Committee for Standardization (CEN) and the European Committee for Electrotechnical Standardization (CENELEC).

Although any guidelines are voluntary, the lack of broad agreement can mean disputes quickly escalate.

IP Europe, a lobby group which includes Nokia and other European telecoms firms such as Ericsson and Orange, said its new guidelines would support small and medium-size enterprises (SMEs) as they develop technology.

"I believe these principles and guidance will help SMEs better understand the cellular licensing process, making it easier for them to participate in cellular standards development and licensing," IP Europe SME Chair Ruben Bonet said.

Rival guidelines have been put forward with the backing of 56 organisations that include Daimler, BMW, Renault and Honda.

They have proposed a code that sets out six principles for assessing whether licensing fees for essential patents are fair, reasonable and non-discriminatory.

"Companies can look at both guidelines and make their decisions," said Michael Sax, chairman of The App Association.

Carmaker Daimler, automotive supplier Continental and auto parts firm Valeo have all complained to the European Union antitrust regulators in the past about Nokia's codes covering use of the telecom equipment maker's patents that are vital for developing "smart" cars and self-driving vehicles.

© Thomson Reuters 2019