Investigating and modeling licensing opportunities for industrial conglomerate

Abstract

Patent licensing is mostly based on licensing standard essential patents within the domain of mobile devices. Rise of other connected devices referred to as part of Internet of Things are changing the licensing environment. As these can be also licensed by companies with SEP portfolios, leveraging of implementation patents that are not part of any standard could be seen as an opportunity.

Automotive industry is becoming increasingly part of the Internet of Things as vehicles get more complicated and possess numbers of different modern features from connectivity to advanced driver assistance systems. While vehicles’ connectivity features are already licenced by Nokia, the rest remain unlicensed. IoT and automotive are areas of question where it is debated whether licensor should target the Tier-1 manufacturers or use the traditional approach of end-product licensing.

Testing of utilizing implementation patents in both Tier-1 and end-product licensing approaches, resulted in creation of licensing model that can be used for large automotive suppliers operating on Tier-1 level. According to previous literature and the new licensing model created for this thesis, transactional costs are the biggest factor separating these two approaches. For Tier-1 approach to be more beneficial, it has to surpass the increased product value provided by end-product licensing with better value from reduced transactional costs. Due to fact that end-product licensing is widely adopted and preferred by the whole industry, benefits from Tier-1 licensing need to be significant to make it an attractive option. Results show that end-product licensing is still likely the best approach for the selected case.