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1 July 2019PatentsPauline Debré and Simon Corbineau-Picci

Automotives: the next battlefield of SEP litigation?

For all automobile manufacturers, car connectivity, such as connected navigation, access to the internet and an e-call security system, has become a must-have feature, and not merely a nice-to-have accessory.

Connectivity features drive consumer demand, and more buyers are willing to switch from one car brand to another for more connectivity.

However, connectivity implies the implementation of technologies which are rather new for the automotive industry and will largely be subject to a long and complex standardisation process. The industry is facing licensing and economic issues in relation to the use of the patents covering such standardised technologies, known as standard-essential patents (SEPs).

Understanding how the landscape of the automotive industry is challenged by the SEPs, which may impact its business model and innovation, is crucial for all stakeholders in the industry.

Many standards are implemented by the automotive industry for connectivity, entertainment (cloud/internet access), navigation (real-time traffic, augmented reality), vehicle relationship management, and maintenance.

SEPs are patents which are necessarily implemented in standard-compliant products. These patents are voluntarily declared as essential to standard-setting organisations (SSOs) by their owner but their “essentiality” to the standard is not checked by anyone.

Most SSOs require SEP holders to make their patents available to all implementers on fair, reasonable and non-discriminatory (FRAND) terms and conditions, in order to support a wide adoption of the standards and ensure equivalent licensing terms to all willing licensees.

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