Justice Department Issues Business Review Letter To Avanci For Proposed Licensing Platform To Advance 5G Technology For Interconnected Automobiles

The Department of Justice’s Antitrust Division announced today that it has completed its review of Avanci’s new Platform for licensing “Fifth Generation” (5G) telecommunications technology in the automotive industry.  As part of its review, the Division interviewed a broad range of stakeholders, including automakers, automotive suppliers, potential licensors, and others, and considered letters issued to other patent pools in similar emergent technologies.  The Department has concluded that, on balance, and based on the representations in Avanci’s letter request, Avanci’s proposed 5G Platform is unlikely to harm competition. 

“The Avanci 5G Platform may pave the way for new connectivity to be incorporated efficiently into vehicles that will enhance the safety and functionality of cars across the United States,” said Assistant Attorney General Makan Delrahim.  “The 5G Platform can facilitate the licensing of potentially thousands of cellular standard essential patents that Avanci has said it will provide access to at rates that are fair, reasonable, and nondiscriminatory (FRAND).  We also are pleased that Avanci has put in place safeguards that can help the Platform avoid harming competition.” 

According to the Department’s business review letter, Avanci’s 5G Platform may make licensing standard essential patents related to vehicle connectivity more efficient by providing automakers with a “one stop shop” for licensing 5G technology.  The Platform also has the potential to reduce patent infringement and ensure that patent owners who have made significant contributions to the development of 5G “Release 15” specifications are compensated for their innovation.  Avanci represents that the Platform will charge FRAND rates for the patented technologies, with input from both licensors and licensees. 

In addition, Avanci has incorporated a number of safeguards into its 5G Platform that can help protect competition, including licensing only technically essential patents; providing for independent evaluation of essential patents; permitting licensing outside the Platform, including in other fields of use, bilateral or multi-lateral licensing by pool members, and the formation of other pools at levels of the automotive supply chain; and by including mechanisms to prevent the sharing of competitively sensitive information.  The Department’s review found that the Platform’s essentiality review may help automakers license the patents they actually need to make connected vehicles.  In addition, the Platform license includes “Have Made” rights that creates new access to cellular standard essential patents for licensed automakers’ third-party component suppliers, permitting them to make non-infringing components for 5G connected vehicles.  The Department made no assessment of whether Avanci’s licensing model, focused on automakers, ultimately will be successful in the automotive industry, which typically relies on suppliers to secure patent licenses.

Under the Department of Justice’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the Antitrust Division currently intends to challenge the action under the antitrust laws based on the information provided.  The Department’s conclusions in this business review apply only to Avanci’s 5G Platform.  They are not applicable to any other agreements or initiatives relating to standards or arrangements for the licensing of 5G-related patents.  The Department reserves the right to challenge the proposed action under the antitrust laws if the actual operation of the proposed conduct proves to be anticompetitive in purpose or effect.

Copies of the business review request and the Department’s response are available on the Antitrust Division’s website at https://www.justice.gov/atr/business-review-letters-and-request-letters, as well as in a file maintained by the Antitrust Documents Group of the Antitrust Division.  After a 30-day waiting period, any documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the business review procedure.  Supporting documents in the file will be maintained for a period of one year, and copies will be available upon request to the FOIA/Privacy Act Unit, Antitrust Documents Group at [email protected].