Avanci CEO stresses importance of simple approach to SEP licensing

In the ever-evolving business landscape, intellectual property is a linchpin, weaving innovation and strategy into the fabric of organisational success. The traditional IP department – once confined to legalities and protection – now extends to using patents as assets that can be commercialised, actively shaping the trajectory of business endeavours. 

In an exclusive interview with Tim Pohlmann, CEO and founder of Avanci Kasim Alfalahi discusses disrupting the world of SEP licensing. 

With an engineering and management background, Alfalahi’s journey began at Ericsson, where he was challenged to treat intellectual property as a product, fostering investment and development. This spanned the evolution of 2G, 3G and then 4G technologies, immersing him in the complexities of licensing agreements between companies. 

However, as connectivity extended into the realm of IoT, encompassing vehicles, smart meters and beyond, Alfalahi recognised the need for a more efficient approach to licensing.

"There’s going to be many more companies that are going to have cellular connectivity in their products,” Alfalahi reflects. “It’s not as efficient to do it one-on-one anymore. It’s more efficient to do it where you have many – too many.”

Navigating the realm of SEP licensing

Avanci aims to bridge the gap between tech innovators and standards implementers, fostering a collective and streamlined licensing process. More than 60 companies contribute to the development of 4G and 5G, while more than 100 brands implement these technologies in their products, including vehicles and IoT devices.

 “We made it really simple,” Alfalahi explains. “You sign one agreement with us. The payment comes to us. We solve all the issues with taxes around the world, wherever you are.” 

This approach not only simplifies the process for implementers but also offers predictability, as licensing costs remain fixed throughout the agreement’s lifetime.

Navigating the contentious realm of SEP licensing is no easy feat, but Alfalahi embraces the challenge. “We are solution driven," he says. “We have our core values that we talk about a lot and live by.” Transparency and independence are paramount.

An amalgamation of market analysis and tech knowledge 

Striking the right balance between the interests of licensors and licensees is a delicate dance that must be approached with a market-driven philosophy. “The price is what the market decides,” Alfalahi asserts. “It’s not one side or one company; it’s not the other. It’s really what the market [determines].”

Extensive analysis, discussions with both sides and a deep understanding of the technology’s value inform Avanci’s pricing strategy. However, the ultimate arbiter is the market itself – if licensees and licensors are willing to accept the proposed price, it becomes the market-driven rate.

Alfalahi’s perspective challenges the notion of licensing as a purely legal discussion, framing it instead as a business decision, and this approach has garnered support from industry giants like Qualcomm, Interdigital and Ericsson – companies that have historically preferred bilateral licensing. He emphasises that Avanci is not a replacement for existing licensing strategies but rather an option that provides an alternative path to access and monetise intellectual property.

Data analysis indicates success of Avanci’s 5G vehicle programmes

According to the LexisNexis 5G report published in October 2023 (see “5G patent ownership is increasingly fragmented”) – which analysed patents declared across all standards generation 2G-5G using INPADOC family counts by ultimate owners – the Avanci 5G vehicle programme accounts for approximately 80% of all active 2G-5G patents when considering active and granted patents in at least one of the IP5 jurisdictions (EPO, Japan Patent Office, Korean IP Office, CNIPA and USPTO). When only taking patents that are active and granted in at least the United States or Europe into account, this share rises to 83%. Further, when weighing patent family counts by the Patent Assent Index, the Avanci 5G vehicle programme’s share is above 85%. 

Applying value simplicity in a market of complex technologies

Looking ahead, Alfalahi envisions Avanci finding success in industries where standardised technology creation and standards implementation are distinct, which necessitates the creation of efficient licensing solutions. 

“We’re just going to continue to be solution-driven, innovative, humble, listen to everybody, and just improve every day,” Alfalahi says. “Advancing means moving forward, so we keep moving forward.”

An entrepreneurial spirit and alternative thinking are essential for solving complex licensing challenges. It can be very difficult to please both sides of the negotiating table, navigate the ‘bandwagon effect’ (where companies only join a new licensing programme once others have) and overcome the chicken-and-egg dilemma of simultaneously attracting both patent holders and implementers.

However, the success of any patent platform programme hinges on appropriate pricing. Greater transparency and economic justification with regard to royalties that patent platforms and pools demand from standards implementers could be the way forward.

“If you’re working on a solution to something really complicated, and it’s a change, a change in the way things are done in the past, you have to keep in mind that it will take time, and it won’t be easy because anything complex takes time to find something simple,” Alfalahi says. “But I would say, once you do that, once you accomplish that solution, it is really rewarding. It makes you feel that it’s worthwhile – all the hard work and all the challenges you’ve had during that journey.”

In an era where information is currency, intellectual property is the essence of progress and IP players must bolster themselves with insightful data and measured foresight. Avanci’s approach not only illuminates top innovators but serves as a guide, underscoring the need for IP practitioners to be well equipped for strategic conversations that extend to the board room.