As technology steers the automotive industry and Silicon Valley onto the same track, big players find themselves at a crossroads – are they on the cusp of the next IP battleground or at the forefront of a new kind of collaboration? Technology and automotive company reps at the “IP in the Auto Industry” conference in Detroit on May 3 trumpeted the latter path. At a session titled “Challenges and Opportunities in a Converging World,” reps from relevant firms discussed how convergence presents opportunities for the two sectors – not just in banding together to protect assets – but in developing new capabilities as well.
This is true particularly in the development of cutting-edge automotive features, including high-tech instrument clusters, sensory capabilities, and breakthrough battery technologies that could overcome some of the biggest hurdles in the widespread acceptance of electric cars. The overlap between the sectors also could grow considerably as self-driving cars move from the experimental phase to the mainstream. Big Silicon Valley firms already have invested heavily in this arena, which is projected to reach $87 billion in value by 2030, according to one research estimate.
As the field expands, the natural reaction for both the auto and tech industries is to defend their patents vigorously, but speakers at the conference emphasized the benefit that lies in considering what the other side can bring to the table, and in some cases, working together. In May, a technology giant announced plans to open a self-driving technology center in Detroit – the home base for the U.S. auto industry – to tap talent in vehicle development and engineering. The same company also recently entered a “first of its kind” partnership with a car manufacturer, to experiment in bringing self-driving technology into a limited number of the firm’s minivans. Likewise, German original equipment manufacturers recently acquired software and mapping abilities from a tech firm for its own vehicles. Many more deals likely are in the works.
Despite a new era of collaboration, convergence may be a cautionary tale.
Opportunistic non-practicing entities looking only to clean up in licensing revenues have sized up the space, and there are indications they are in for a good fight. Here the two industries have joined together already to defend legitimate players and their assets. Allied Security Trust, a membership-based organization that includes major technology and automotive companies, just launched the IP3 portal, an industry patent purchase program, in which the banded-together entities offer to buy high-quality patents at the seller’s non-negotiable price. The stated goal of the group is to acquire patents that could be asserted against group members, and then provide members with a license to those patents, to mitigate litigation risk. Sellers were able to offer patents from May 25 to June 8, and the group will now decide which patents to acquire by July 29. All transactions are anticipated to close by the end of September.
The takeaway message from the convergence of these industries is that stakeholders in both sectors should tread carefully as they build out their portfolios, and be aware that on an overly crowded race track, not every player will survive. Separating friends from foes could be the key to finding the right path forward and overcoming the inevitable bumps in the road.