The automotive industry is unquestionably evolving at considerable pace whether through advances in connectivity and autonomy in vehicles, developments in the way that consumers access and use vehicles or changes driven by the ‘electric revolution’ and the industry disruption caused by the COVID-19 pandemic. Through Herbert Smith Freehills’ series of articles, “Views on an evolving automotive industry”, we look at some of the legal, regulatory and compliance issues that arise from or have been magnified by these unprecedented changes.
In the latest edition of that series, Andrew Moir, Ina vom Feld, Frédéric Chevallier, David Webb and Laura Adde of our London, Düsseldorf and Paris IP teams consider some of the key issues surrounding standard essential patents or SEPs for those in the automotive sector. These include, in particular, how standards work, their role in the Automotive sector, how fair, reasonable and non-discriminatory (FRAND) licensing operates, and the risks of litigation and the varying approaches across Europe (in the UK, Germany and France in particular).
Connectivity is an increasingly important feature for vehicles and will be essential for the operation of autonomous vehicles. Connectivity through mobile networks, such as 3G, 4G and in future 5G, requires traditional automotive manufacturers to incorporate technologies from the telecoms industry into vehicles. These technologies are part of complex standards, and are protected by large portfolios of patents known as SEPs. Similarly, new standards are being developed such as Dedicated Short Range Communication (DSRC) specifically to facilitate communications between vehicles and their surrounding infrastructure.
The licensing framework surrounding these SEPs is complex and requires owners to license on FRAND terms. Participants in the automotive sector need to be aware of the key issues surrounding FRAND licensing, and the particular difficulties that arise in the context of the automotive industry.
The UK Supreme Court has recently ruled that UK courts have jurisdiction to determine the terms of such FRAND licences worldwide, making the UK a key jurisdiction for FRAND disputes. The recent German Supreme Court decision has also provided important guidance, particularly as there have been a number of connected vehicle cases in the German courts in 2020.
Read the Standards and essential patents edition of the Views on an evolving automotive industry series here.
See our Automotive sector webpage for other editions in the series.
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