Driving forward: the automotive tech fueling IP interests

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Automobiles are many
things to many people. At their heart, they’re a core mode of transportation
that ferry passengers to and from places, including cities, states, countries,
and even continents, providing a sense of identity for some and essential
utility function for others.

In this way, cars and
other automobiles have become vital to modern life – and as a result of new
innovation, they’re becoming even more integral.

Automobiles have
become more than just a mode of transportation; they have integrated themselves
with our digital lives and automated everyday functions. Technological
advancements that once seemed largely theoretical to much of the public more
than a decade ago have quickly become a reality.

In a previous
article, we examined various IP challenges confronting automotive companies
related to patenting AI-related inventions, including patent eligibility,
inventorship, and trade secrets.

In this article, we consider advancements in
automotive technologies, both from patent filings and from the perspective of
historical litigation trends in emerging technologies, touching on aspects of
autonomous vehicles, connected vehicles, and design patents.

A wave of
technological innovation has pushed the IP footprint of car manufacturers
beyond the basics of automotive design and into realms that had previously been
recognised as high tech.

But history has shown
that the potential for litigation increases as companies stake positions on
innovation, market share, and differentiation from competitors in fast-growing
tech – as evidenced by the advent of the electric light, heavier-than-air
flight, and the so-called smartphone wars.

In recent years,
there has been a marked increase in patent filings surrounding autonomous
vehicles, AI, and connected automobiles, which may signal the potential for
increased litigation as these technologies integrate into the marketplace.

As technology becomes
more integrated and continues to cross industry boundaries, automobile
companies will need to grapple with standard essential patents (SEPs), which
have seen historically increased litigation for cellular, smartphone, and
computer manufacturers, and less so for automotive companies.

In addition, trends
in obtaining design patents to protect designs of replacement parts may offer
additional avenues for automotive companies to prevent counterfeit products,
allowing them to strengthen brand images, ensure quality of parts, and maintain
safety standards.

A recent federal
appeals court’s decision upholding the use of design patents for replacement
parts has brought increased attention to the potential that design patents may
offer.

Expanding tech

It’s no secret that
automotive firms are developing technologies at an incredible pace and
investing significant resources to do so.

Patent applications
filed for autonomous vehicles and connected automobiles continue to rise
globally and are among the fastest growing technologies in the automotive
industry.

Notwithstanding core
technologies in driving operations, increased connectivity and user experiences
–such as infotainment systems, 5G integration, and other traditionally
non-automotive technologies – are now integrated throughout the industry.

The recent increases
in patent filings for autonomous vehicle patents will affect both passenger
cars with self-driving modes and fully autonomous vehicles, such as autonomous
ride sharing and taxi services.

Late-stage testing
deployments and early rider programmes are already bringing such technology
into the mainstream of public life. For example, artificial intelligence is now
a driving force behind autonomous vehicle development and is one of the fastest
growing segments in the automotive industry and patent filings.

While the continued
growth and technological development of driverless vehicles is seen as a
positive advancement in the consumer driving experience, it also raises issues
related to SEPs and, in particular, 5G.

One benefit of SEPs
is the potential for simplifying licensing when declared and licensed under the
standards setting bodies’ policies.

An IPlytics study in
January 2020 determined that more than 95,000 patents were declared standard
essential with respect to 5G.

Of those, nearly a
quarter of the patent families declared were also declared essential to
previous 2G, 3G, or 4G standards.

Some patent owners
not subject to SEP declarations have tried to enforce patents they believed
were essential to standards as technologies came to market. Such litigations
surrounded 802.11 Wi-Fi standards, 3G, and LTE in the late 1990s and 2000s.

Recently, although
not specifically targeted at 5G technology, Conversant sued Tesla over Tesla’s
integration of 3GPP and 4G/LTE standards at the District Court for the Western
District of Texas.

This case was
dismissed in December 2020, but may signal the potential for litigation
surrounding SEPs and automotive companies in the future.

SEPs may also become
important to bring autonomous vehicles into the mainstream, not just to
communicate over mobile networks, but also with vehicle manufacturers to ensure
that autonomous vehicles form a cohesive ecosystem.

Outside automotive

As automobiles become
more connected, they may also become more reliant on traditionally
non-automotive providers’ technology to be free of IP issues.

One example is the
integration of infotainment systems that are compatible with other electronic
devices. Patent plaintiffs do not always allege infringement of the source of
technology but can assert their patents against the ultimate consumer product.

For example, since
2011, more than 40 district court patent infringement complaints have
specifically alleged infringement related to automobile infotainment systems,
such as Bluetooth or supplier software, that may not have been developed by the
automobile manufacturer. Nearly half of those cases were filed in 2020 or 2021.

High tech companies
in the consumer electronics space are now moving into the automotive space and
developing patent portfolios on various technologies used in cars and trucks.
IP litigation in consumer electronics may, therefore, bleed into the automotive
realm.

Historically, patent
litigation has increased after periods of intense technological innovation, and
could be perceived as a marker for competitive innovation.

Some of the earliest
ground-breaking technologies were met with high-profile IP litigation. For
example, the commercially viable electric lightbulb was litigated between
Edison and Westinghouse in a bid to garner the emerging electric light industry
and to determine not just market shares, but whether the nation would adopt
alternating current or direct current technologies.

Heavier-than-air
flight also saw an IP war between the Wright Brothers and Glenn Curtiss in the
budding aviation industry. The rise of smartphones led to heavy litigation in
the smartphone wars.

Given the potential
of autonomous vehicles, AI integration, and other rapidly growing automotive
technologies, history suggests that increased litigation may be on the horizon.

While automotive
industry players may not want to relive the smartphone wars in competitor
suits, future litigation risks may not come from traditional automotive
competitors.

Instead, they may
begin in non-automotive fields, including AI, SEPs related to 5G, and
electrical infrastructure.

RPX recently
published a study finding a 182% rise in automotive patent litigations filed by
non-practising entities (NPEs) between Q3 2020 and Q3 2021.

Although many other
industries also saw rises in NPE litigation, the rise in automotive was the
largest of any sector analyzed in the study.

This rise correlates
with a general uptick in litigations since 2018, but it is worth noting that
the period between 2010 and 2015 also marked the high point in litigations
filed against automotive entities, according to LegalMetric data.

Government gears

Although patent
litigation is driven by many factors within the market, external factors, such
as governmental decisions, may shape the market and the development of
technologies.

For example,
California recently set a goal to have all light-duty autonomous vehicle sales
be zero-emission vehicles by 2030, and all personal automotive sales be
electric vehicles (EVs) by 2035.

Several countries and
governments outside of the US have also set or proposed goals for increasing
electric vehicle sales and setting standards for autonomous vehicle safety
guidelines.

Such directives, if
held to, may direct innovation, including patent filings and litigations.

They also require
future investments in infrastructure and may result in a greater demand for certain
types of vehicles in the market.

As such, EV charging
infrastructure, fuel cell technology, and EV technology – already near the
forefront of patent filings – may find itself as an emerging area of litigation
as companies invest in these technologies to meet governmental and regulatory
requirements.

Government directives
may also have ripple effects in non-automotive utility industries that dovetail
with automotive.

As the number of and
need for electric charging stations increase, the power grid must bear the
additional load, potentially crossing over into grid infrastructure patents.

A 2020 California
Independent System Operator report noted that increased utility usage from high
temperatures, resource adequacy, and planning processes were likely
contributors of rolling blackouts.

Investments in
electric vehicle technology may, therefore, touch not only on the technology of
the charging stations themselves, but also the greater infrastructure
supporting those technologies.

Design dilemmas 

Design patents have
become a strategically important IP asset for automobile makers to, among other
things, prevent counterfeit parts and provide quality control over the design
and appearance of their products, when utility patents or trade dress
assertions may not be feasible.

Design patents allow
automakers to protect non-functional elements of components and to bring suit
against infringers who make, sell, or offer to sell a product using a protected
design.

Design patent
litigation concerning automobile parts has received increased attention in the
courts during the past few years.

In two recent opinions, the Court of Appeals for the Federal Circuit held that design patents may protect designs for replacement automobile parts – see Ford v New World International from 2020 and Automotive Body Parts Association v Ford from 2019. 

Such confirmation
could serve to bolster protection for manufacturers and pave the way for
possible enforcement against counterfeiters and knock-off products.

Design patents may be
a generally defensive or protective area at this time, but the recent appeals
court decisions could strengthen automotive manufacturers’ confidence in the
importance of design patents in protecting their brands and consumer
reputations.

Notably, one of the
most watched patent litigations in recent history involved design patent
assertions from Apple against Samsung covering the design of graphical user
interfaces.

As automotive
companies continue to integrate technologies and improve user experiences, many
of which are driven by graphical user interfaces, including infotainment
systems and the replacement of traditional, analog gauges with enhanced digital
displays, design patent protection may further differentiate and provide
protection for automotive manufacturers looking to provide unique and
identifiable user experiences to consumers.

As time goes on in the fast-evolving automotive industry,
advanced automotive technologies will continue to influence not only patent
filings but also the potential for IP litigation.

This article was authored by Kevin Rodkey and Kara Specht (partners in Atlanta) and Kathryn Judson (an associate in Atlanta) at Finnegan

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