As Chair of Foley & Lardner’s Electronics Practice Group, I recently published a LinkedIn article about news reports of a group of German auto companies including BMW, Audi and Daimler acquiring HERE Global (Nokia’s map business) for U.S. $2.8 billion. Reuters says that HERE’s primary competitor is Google Maps. The Reuters article said that the auto companies outbid Silicon Valley and Chinese companies like Uber and Baidu. The press also suggested the purchase allows the automakers to offer new premium features like autonomous driving.

So I’m asking why would these companies pay billions just for an alternative to Google Maps?  Something more is “driving” this acquisition…

A search of the U.S. Patent Office reveals HERE has 43 recently issued patents and 49 pending, published patent applications. Many of these patent applications are directed to “map features” (e.g., US 20150170514 “Systems and Methods for Detecting Road Congestion and Incidents in Real Time”) but several of them are clearly directed to assisted driving or automated driving features, including patents to “Creating Geometry for Advanced Driver Assistance Systems” (US 9,068,856) and “Method and Apparatus for Notifying Drivers of Space Required for Other Vehicles” (US 9,047,766).

Certainly, part of the motivation of the German auto companies was to keep these patents out of the hands of rivals. Reuters reported that the CEO of Daimler said of this transaction:

With the joint acquisition of HERE, we want to secure the independence of this central service for all vehicle manufacturers, suppliers and customers in other industries.

In other words, the auto companies didn’t want someone else to get patent rights that would place obstacles and added costs to bringing the technology to market.

Key Takeaways

This transaction is an example of sophisticated companies understanding the vital importance of intellectual property like patents in commercializing new technologies. All companies should include intellectual property (IP) as part of its business strategy. IP landscape studies can help a company understand what companies have rights to different technologies in a particular industry. IP audits can help a company understand what rights it has and what risks are present for potential infringement of the IP of others.