Apple, Cisco, Daimler and BMW complain to Brussels over patents

Coalition of tech firms and carmakers say competition is suffering in connected devices

Apple, Cisco, Daimler and BMW have urged the European Commission to take action on patent abuses that are hampering the development of self-driving cars and other connected devices.

The companies are part of an unusually broad coalition of technology groups and carmakers that say they are being denied licences for essential patents on fair terms. The patents cover technology that allows connected devices to communicate with each other.

In a letter to the commission, the companies argued that the lack of access to the patents on fair terms “increasingly undermines the competitiveness of these important highly innovative industries, and is already harming technological innovation in Europe”.

The letter does not name names, but comes after regulators said they would investigate Nokia's refusal to offer licences for components for self-driving cars after complaints from German carmaker Daimler and car supplier Bury and others. Nokia has dismissed the accusations as "meritless" in the past. The commission previously said its investigation was "ongoing".


Stifles innovation

“The practice of some [standard essential patent] owners to grant licences only to certain companies . . . prevents companies across the internet of things and related innovative technology industries from planning investments in R&D,” the letter said.

“This practice stifles innovation, discourages new market entry, and ties suppliers to established customers. As a result, European businesses and consumers may pay higher prices than they would pay in a more competitive market,” it added.

The letter was signed by 27 companies including Ford, Continental, Dell, Lenovo and Sky. As a group they claim to have invested more than €45 billion in research and development, and own more than 200,000 patents and patent applications, including standard essential patents.

A person with direct knowledge of the letter, which was sent to the commission's president Ursula von der Leyen and commissioners Margrethe Vestager and Thierry Breton, said the broad allegiance of companies "shows this is a cross-sectorial issue affecting all not only digital but wide variety of subjects".

“This is of importance to many industries,” the person added.


Access to standard essential patents is at the heart of developing crucial technology which enables objects, from fridges and washing machines to smart energy meters, to send and receive data.

Regulators promote the voluntary licensing of these patents on the basis of fair, reasonable and non-discriminatory terms, to ensure potential competitors have access to fundamental technologies.

Brussels enforces such terms to make sure that those who develop the patents that allow devices to speak to each other get properly compensated but also to prevent unfair remuneration from actions not related to their efforts, the letter said.

"We urge you to take decisive measures to ensure that European law and policy protects innovation across all industries and prevents practices which undermine the viability of investments benefiting the future of Europe, " the letter concluded. – Copyright The Financial Times Limited 2019