Feeling Silicon Valley Heat, Automakers Push For Patents As Cars Evolve

The intangible value of ideas and innovation may be worth as much or more as the tangible weight of vehicles. JL


Cristina Rogers reports in the Wall Street Journal:

Auto makers, pressured to keep up with Silicon Valley companies working on autonomous-car technology and ride sharing, have sharply boosted their U.S. patent filings. Silicon Valley companies tend to be far more aggressive in patenting and protecting innovations .“So auto makers are arming themselves with more and more patents.”
Car fanatics wanting a glimpse at the auto industry’s next big thing used to flock to auto shows. Now, many of them flip through online patent filings.
Auto makers, pressured to keep up with Silicon Valley companies working on autonomous-car technology and ride sharing, have sharply boosted their U.S. patent filings over the past five years. In 2016, 10 of the world’s largest car makers submitted 9,700 patent applications, up 110% from 2012, according to consulting firm Oliver Wyman.
“The pressure is for us to invent before the Valley does,” said Bill Coughlin, chief executive of Ford Global Technologies LLC, which handles the Dearborn, Mich., auto giant’s patent and copyrights. “The last thing we want is to be a fast follower.”
A growing number of these filings seem straight out of science fiction, covering inventions intended to help people pay less attention to the road while they drive—or don’t actually drive at all
Ford Motor Co. F +0.50% seeks a patent for a drone system that would locate passengers who call a self-driving robo-taxi, while another Ford filing, envisioning self-driving cars with conference room-style seating, seeks to patent a special air bag that will fit into a center table to protect the occupants facing it.
For its part, BMW AG BMW +0.45% wants to patent a system that would allow an autonomous vehicle to communicate with pedestrians or human drivers in other vehicles, through visual signs, beeps or even speech.
Hyundai Motor Co. , meantime, seeks to protect a device that would allow a driver to exit from the car and then push a button to park it, while Toyota Motor Corp . TM +0.30% is looking to patent a technology that makes certain car parts such as door pillars appear to be see-through.
Patent holders have exclusive rights on an invention two decades after the filing date, an important weapon for vehicle companies looking for a technological edge in an evolving industry. While patent disputes rarely make news in the car business, first-movers often enjoy benefits, such as revenue from licensing their creations to others.
Toyota, long the industry leader in patent filings, innovated several hybrid-vehicle technologies that rivals eventually needed when looking to compete in combo gas-electric cars. Technology from its groundbreaking Prius was licensed by Ford, for instance.
“We’re not just a company that’s looking at putting some nuts and bolts on a vehicle,” said Fred Mau, Toyota’s lead intellectual property attorney in North America. “It’s about being prepared for ‘what’s the next big thing?’”
One of the Japanese company’s most-recently published inventions is a system that uses cameras and data storage to create a road-trip storybook. Toyota has also sought to patent a digital necklace to help the blind sense their surroundings, an example of how the car maker is looking beyond the vehicle market to innovate.
Auto executives feel the heat from tech companies, as richly funded startups and corporate heavyweights develop their own moonshot ideas.For instance, Google parent Alphabet Inc.’s GOOGL +1.02% Waymo autonomous-car division in 2015 filed a patent application for a shape-shifting vehicle that would become flexible in a collision. Amazon.com Inc., AMZN +1.14% which is following Uber Technologies Inc. and Apple Inc. AAPL +0.84% in creating an in-house driverless-technology division, recently patented a system to help autonomous vehicles better navigate differing roadway configurations.
Juergen Reiner, a partner at Oliver Wyman, said car companies have an edge in creating automotive hardware, but will struggle to catch up on the software front. Unlike Silicon Valley companies, traditional vehicle makers face huge overhead and capital requirements for their factories and product lines.
“It’s not a well-balanced battle,” Mr. Reiner said. “They need to develop cars and have other distractions.”
Patent filings aren’t the most efficient way to spy on big ideas at their gestation because they aren’t made public until 18 months after submission. However, because they include the inventor names, they are also good for identifying talent.
“These are not the names you would ever read in the press,” said Reilly Brennan, a partner at Trucks venture-capital, a fund that invests in transportation startups. While under the radar, these engineers are working on projects that are “more exciting than [anything] I’d ever seen at an auto show.”
Some car companies aren’t moving as aggressively on the patent front, even if they are trying to lead the technology chase. General Motors Co. GM +0.32% , for instance, has bought or invested in Silicon Valley firms working on autonomous technology but narrowed its own patent filings to about 1,000 in the U.S. last year, down 3.4% from 2012.
GM said it trimmed its patent requests to focus more on emerging technologies, including advanced materials, and sensors and other things linked to connectivity.
“We’re not looking at patent volume,” a GM spokesman said. “We’re looking at patent quality.”
Toyota’s U.S. filings climbed to over 3,000 last year from 1,271 in 2012, and to 7,000 globally, from 9,950 in 2012. Ford submitted 5,000 globally, a fivefold increase over 2012, according to Oliver Wyman. Ford says it sees the potential to boost its licensing revenue; its income from royalties, which includes licensing, totaled $714 million in 2016.
Toyota, Ford and several global rivals have ramped up research centers in Silicon Valley, expanding into data analytics and artificial intelligence. Ideas like in-vehicle health monitors and removable steering wheels or pedals for self-driving cars are among recent inventions Ford has sought to patent.
Car companies have typically looked to strike cross-licensing deals in an effort to avoid litigation over patents, said  Corey Beaubien, an intellectual property attorney at Reising Ethington, a firm in Troy, Mich. That could change with the rise of Silicon Valley companies that tend to be far more aggressive in patenting and protecting innovations, he said.
“So auto makers are arming themselves with more and more patents.”