#25 Laurie Fitzgerald | The 5G Vehicle SEP Program

10/03/23 • 42 min

Laurie has over a decade of experience working with patent owners and product developers, spanning licensing transactions, patent acquisitions and divestitures, portfolio strategy and valuation, and patent litigation. A regular conference speaker, Laurie features in the IAM Strategy 300 list of leading IP professionals and World IP Review’s Most Influential Women in IP. At Avanci Vehicle, Laurie has driven the platform's expansion to cover more than 80 automotive brands and licensors responsible for most 3G/4G cellular SEPs. She is responsible for all aspects of Avanci Vehicle operations and is currently working to build its latest program to cover the next generation of connected vehicles. Prior to Avanci, Laurie led its affiliate Teletry, licensing BlackBerry’s extensive patent portfolio to smartphone and telecom infrastructure manufacturers.

In the podcast, Tim and Laurie enter a wide-ranging conversation about the latest 5G Vehicle SEP Program that Avanci has recently launched. With the 5G Connected Vehicle Licensing Program, Avanci announced the first licensee: Mercedes. A month later, the second licensee, BMW, joined, and Laurie promised that we should stay tuned for further announcements of new licensees to join. The program came with some delays but an impressive list of SEP licensors. Laurie elaborates on the complexities of the negotiations both with SEP licensors and the automotive OEMs. Here, the focus was to ensure that the new program was only launched when a critical mass of SEP licensors was confirmed. With Samsung and Huawei joining compared to the 4G program, everyone finally felt it was time to launch this.

Laurie went back and explained that Avanci had come a long way from the time during the 4G program when Avanci only had 11 SEP licensors, and BMW was the only automotive OEM who signed. Back then, the second automotive OEM joined only 16 months later, and it took Avanci a lot of convincing during that time. Today, presenting a total of 58 SEP licensors at launch, and as to the IPlytics estimation of a 3G, 4G, and 5G multimode SEP coverage of 80-85%, the Avanci offer looks much more convincing, and the second licensee, BMW already joined four weeks after launch when Mercedes joined. If OEMs join within the next six months (or before they ship their first 5G vehicle, whichever is later), they will get access to all members’ cellular SEPs for a discounted rate of $29 per vehicle. After the 6 months, the rate increases to $32 per vehicle for late joiners. The new royalty rates may be discussed with at least some controversy, however. Compared to the initial $15 for the 4G program, the new $29-$32 rates for 5G may seem like a stretch. Laurie, however, argues that they started off with $15 with only 11 SEP licensors and, as to the IPlytics estimation, only a share of about 30% of all SEPs back then. Considering the increasing number of Avanci members, SEP coverage, and adding 5G, a much more advanced technology to the program, the $29-$32 price looks more reasonable. Laurie further elaborates that the price is the outcome of her team’s negotiation with SEP owners and automotive OEMs over the past years. Again, critical voices say that such a rate is only reasonable for premium brands like Mercedes or BMW, who now also signed up first. Laurie, however, argues it’s only fair that everyone pays the same, we create a level playing field, and car makers with low-priced cars can always only select some of the low-priced options starting at 3$ for only eCall.

Joining the program early has not only the advantage Laurie says to guarantee the low rate at $29, but it also ensures to be protected early on as the Avanci license is sticky. Once you sign up with Avanci and the Avanci members sell their patents e.g. to Patent Assertion Entities (PAEs), these patents can not be asserted to anyone who was a member of Avanci when the patents were yet owned by one of the Avanci.

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#24 Eli Mazour | The art of SEP claim drafting

Eli Mazour is a Partner with Harrity & Harrity LLP where he leads the firm’s patent prosecution team. Eli’s practice focuses on helping large technology companies build valuable, high-quality SEP portfolios in an efficient manner. In this role, he develops and implements best practices for managing workflow and innovative, data-driven patent prosecution strategies for reaching favorable results at the USPTO. Eli also helps clients evaluate existing patent portfolios, identify strategic areas for patenting, and create processes for harvesting disclosures of patentable inventions. In addition, he has been involved with licensing negotiations, patent infringement investigations, clearance of products (freedom to operate opinions), and patent litigation. As a result, he is keenly aware of the pitfalls to avoid and opportunities to grasp during patent prosecution. Eli is also the creator and host of the Clause 8 podcast, which features interviews with the most interesting members of the IP community.

Eli has a strong track record for drafting SEPs for clients that have high-quality SEP portfolios such as Qualcomm. In the SEP Couch podcast, Eli elaborates on why SEPs are so special and different from other patents. He explains that drafting SEP claims is much more complex since the language used in an invention disclosure may be different compared to the language used in a standards document. And a standard still develops and changes which makes it even more difficult to keep mapping claims to evolving standards section. Eli works closely with the inventors while also monitoring standards development. He also interviews the USPTO examiners to better understand what scope of a claim will likely be accepted.

SEPs must not only be essential but also valid. An additional feature described in a claim creates the risk that prior art exists somewhere. Therefore, if a feature does not make it in a standard, he rather focuses on claim language to use more specific language.

The USPTO allows third parties to submit prior art in a so-called inter partes review (IPR) presented before the Patent Trial and Appeal Board (PTAB). This possibility has created new business models such as the company Unified Patents which helps its clients to “kill” SEPs in targeted invalidation campaigns. Such practices have increased the requirements for drafting valid patents, even though Eli explains that especially large SEP holders such as Qualcomm have such a high-quality patent portfolio that it does not matter if a few patents are found invalid. There is a proposal for patent reform in the US patent system (USPTO’s new Catch-22) that could make it much more difficult to file IPRs, but Eli does not believe it will pass.

Finally, Eli comments on the EU Commission’s draft of a proposed SEP regulation which includes a register of essential SEPs. Eli argues that he cannot see how third parties should be able to efficiently determine essentiality which is a very complex task that may take days or even weeks to just claim chart one patent.

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#26 Joe Casino | Sun Patent Trust’s Approach to Commercialize SEPs

Joe Casino is the Managing Trustee of Sun Patent Trust and a partner at Wiggin and Dana. He has been involved in licensing and patent enforcement for more than 25 years and is consistently named as one of the world's leading IP strategists and Global Leader by IAM Strategy 300, as well as Super Lawyer honors. Joe is Secretary for the Licensing Executives Society standard-setting program for developing an ANSI standard of best practices for licensing negotiations. Joe specialises in patent office disputes, complex licensing, patent monetisation, patent portfolio development, and worldwide intellectual property strategic matters.

In the podcast Joe describes his extended experience in all aspects of intellectual property law and explains how SEP cases are different to other patent cases. Joe started working in Japan as in-house patent counsel for Matsushita Electric Industrial, Co. Ltd. (“Panasonic”) and continued that work by becoming the Managing Trustee of Sun Patent Trust (www.sun-ip.com), which is the licensing entity for selected Panasonic high tech patents. Sun Patent Trust was established in December 2015 as a Delaware Statutory Trust owning over 5,000+ patents and pending applications. The patent portfolio includes protection in North America, Europe and Asia. Joe follows different licensing and commercialization approaches including licensing the Sun Patent Trust portfolios through patent pools, other platforms and through individual licensing as well as patent transactions. Joes is committed to licensing SEPs under the FRAND patent policies set by the relevant standard setting organisations and is proud that during the past 8 years only once he had to enforce the Sun Patent Trust patents in a litigation case against HTC in 2020-2021 in front of the Eastern District of Texas.

Overall, Joe feels that the world of SEP licensing has developed to be much more complex compared to 10 years ago with new market players on both sides. New SEP owners have established strong SEP portfolios but even more we observe an increasing number of standards implementing companies from industries that have yet not licensed-in SEPs. That creates challenges for SEP licensing and especially for smaller players such as the Sun Patent Trust a patent pool or patent platform solution is increasingly solving such challenges best. Still also pools and platforms are not all equal and some are more successful than others. Joe carefully evaluates which SEP licence program or pool to join.

In general Joe believes that the market should solve the SEP licensing challenges and FRAND determination should be solved by the negotiating parties and not by governments and only in exceptional cases by courts. Joe ends the podcast by quoting the final statements in two SEP landmark decisions from the UK higher court of justice namely. Interdigital vs Lenovo and Unwired Planet vs Huawei. Here both judges concluded that FRAND determination is a very a complex topic and courts are not best equipped to determine a FRAND rate. It is always best if the negotiation parties should solve this bilaterally.