Licensing Transparency Defuses Legal IoT Landmines

We hear a lot about the rise of the Internet of Things (IoT) as it relates to our homes – smart light bulbs, door locks, security cameras or refrigerators – all connected to the cloud and accessed or controlled through our mobile devices. However, a significant number of the 30 billion devices estimated to be connected by 2020 will relate to our vehicles.

The automotive industry is at the forefront of this explosion of new technology, leading its own groundbreaking development in IoT as an early adopter of wireless technologies in its connected vehicles.

Rapid advancements in automotive technology such as advanced driver-assistance systems and fully autonomous vehicles have changed the way we drive. Consumer demand for electric vehicles also means new technology for monitoring and troubleshooting potential problems and solutions. What seemed like science fiction a decade ago is coming to life before our eyes.

Gartner forecasts that by 2020 one in five vehicles or more than 250 million vehicles worldwide will be on the road with some form of wireless network connection. This convergence of two very different industries – automotive and wireless – shows both the potential of IoT to create new customer experiences and an urgent need to find a common way of working between different industries.

Earlier this month, the Department of Transportation (DOT) released revised automated driving systems (ADS) guidelines, which outline best practices for manufacturers and automakers developing autonomous vehicles. In this report, the DOT scaled back some of last year’s regulatory recommendations in favor of more voluntary guidelines, which allow for greater transparency and open the door for continued and unhindered innovation.

These guidelines include opportunities for connecting vehicles to the world around us for greater safety. It encourages new entrants to come into the space with new ideas and will help reduce the amount of time it takes a product to get to market. In short, it’s a major opportunity for the automotive industry to set the course and lead.

Connectivity is an absolutely critical element as autonomous vehicles continue to become more and more advanced. Increasingly, cellular connectivity such as 4G LTE (and 5G in coming years) comes into play in collisions, collecting, processing and calculating essential data about the location, conditions and other aspects of a crash. This information can alert safety personnel, help reduce injuries and damage resulting from the accident and be used by automakers to help prevent similar situations in the future.

But it doesn’t stop there. Even without taking the self-driving feature into account, automotive connectivity is – and will continue to be – essential to the vehicle’s performance and functionality, including the entertainment system, navigation, collecting vehicle performance data and insurance reporting, to name a few. This list will only grow and its interdependency will widen.

We’re in a period of rapid evolution where more players are entering the automotive market, both as manufacturers and suppliers, and with a broader set of skills needed to keep the systems performing flawlessly. These skills are beyond just software and hardware and extend into cloud computing, network switching systems and machine learning. As we’ve seen at other historic times of technological progress, such as the introduction of the smartphone, disruptive technology may be accompanied by a noticeable increase in other activities, namely litigation as companies fight over patents and intellectual property.

In this instance, the intersection of two very different industries, amplified by the many different patent holders, could result in a legal mess. It also could slow down the commercialization and adoption of advanced technology and a better driver experience.  If there’s one lesson to learn from the smartphone patent wars of the past, it’s a simple one: Don’t repeat history.

There is a solution to reducing cross litigation; however, it will require greater transparency and a different licensing solution than the system used within the telecom and automotive space today. By encouraging transparent costs, the automotive industry can seek to eliminate confusion and avoid a web of bilateral deals and protracted litigation. Legitimate patent holders get paid a fair royalty for their innovation, and auto manufacturers can obtain transparency in their cost structure and more flexibility in managing their supply chains, ensuring they pay no more than a reasonable licensing fee.

The goal should be to create a better-functioning licensing ecosystem for the automotive and IoT industries, at the heart of which are clear guidelines, ground rules and more openness with royalty rates. This is what my company, Avanci, is all about.

Additionally, our one-stop licensing marketplace increases efficiency for automakers by providing one single license that offers access to essential connectivity technology. We also enable more predictability for the automotive industry by reducing the risk of wasteful and distracting litigation and making it easier for companies to accurately put together the cost of each vehicle.

As automakers continue developing technology for the next generation of connected and autonomous vehicles, navigating a complex legal web of license agreements with dozens of wireless patent owners should be the last thing on their minds. Fortunately, automakers now have a choice: They can be the first to simplify a complicated process, paving the way for innovation and rapid deployment.

Kasim Alfalahi is founder and CEO of Avanci, a licensing platform for Internet of Things products.