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Prices Likely to Rise as Tech Companies Demand Patent Fees From Japanese Automakers

World-renowned tech companies have asked major Japanese Automakers, namely, Nissan, Honda, and Toyota to pay patent fees for using their tech components in cars.

As per a report from Nikkei Asia, 48 tech companies including Qualcomm, Nokia, NIT, etc. have demanded the patent fees, specifically against their components used in cars for internet connectivity.

The Japanese automakers are facing this due to unevolved patent policies as a result of the late adoption of modern technology. The demand has been put forth by Avanci — a US-based company responsible for settling the patent fee matters for the LTE (4G) and 5G communication standards.

Avanci has mandated that the car companies pay $15 per unit produced against the use of relevant patents. The company has formed “patent pools” to hold joint negotiations and has brought companies such as Nokia, Phillips, Ericson, NIT, Sony, Qualcomm, Panasonic, and other companies on board to participate.

The fee is expected to range up to billions of yen per automaker in a year, although it is unknown if the automakers will agree to pay this amount.

What does it mean for car buyers?

The automakers’ compliance with this demand can increase car prices. The average car prices have climbed significantly in the few years, however, there are more price hikes to come following such events.

The incorporation of technology has become a double-edged sword for car buyers around the world as prices continue to increase with every little advancement.