In terms of capturing the imagination of the general public, the idea of cars that drive themselves ranks up there with Back to the Future’s hover boards and self-lacing shoes, and Bruce Willis’ flying taxi in The Fifth Element. A technology that, just a few years ago, seemed limited to science fiction is now well on its way to becoming a reality and represents a significant new market opportunity. PwC estimate that the digital automotive economy is predicted to quadruple to €115 billion by 2020 and the European Union has identified Connected and Autonomous Vehicles (CAVs) as a key element of increasing the competitiveness of European industry.
Quite apart from the economic opportunity, it is widely agreed that CAV technology will be a game changer in a number of other respects. The idealist’s view heralds it as an era of increased road safety (at present, over 90% of deaths and injuries on UK roads are due to human error), reduced traffic congestion, lower emissions and plentiful and cheap urban transport. No surprise then that gaining first-mover advantage and capturing market share has become a priority for traditional automotive businesses and new market entrants alike.
These benefits are not without legal and societal implications, however, and CAVs raise a wide range of issues, both legal (such as regulation, liability, privacy and insurance) and social (such as ethics and safety). One legal issue expected to attract attention is the role of intellectual property rights in enabling industry players to establish, and thereafter maintain, a position within this emerging, and potentially very lucrative, market. The race to achieve market share will inevitably lead to a flurry of intellectual property disputes: recent skirmishes between some of the major industry players provide a flavour of what may be to come, with some industry commentators predicting litigation at levels similar to the “smartphone patent wars”.
The race to obtain patents
Extensive R&D activity is already well underway in the race to be the first to market with a fully autonomous vehicle and it seems likely that in the arms race for market dominance, patents will form the backbone of any intellectual property strategy in relation to CAVs. The automotive manufacturers are already known for their prolific patent filing strategies and the indications are that this approach will carry through into the era of CAVs as industry players will make considerable efforts to patent technologies that they consider to be mission critical. Google, for example, is thought to have already amassed hundreds of CAV-related patents since 2009. More traditional industry players including Volkswagen, Ford, Daimler and GM have also invested heavily in obtaining patents.
The market recognises, however, the need to balance patent protection and exploitation and the risk of potentially curtailing the growth of a nascent industry whose ultimate success will be to the benefit of the market as a whole. Taking a less aggressive, more pragmatic approach to the protection of patents may seem counterintuitive, but it is grounded in the practical and economic reality that a smaller piece of a bigger pie is a more attractive proposition than a big piece of a small pie. Manufacturers taking this tack will undoubtedly continue to protect a great deal of proprietary information but their approach to patents may prove to be a shrewd long term play.
“Soft” intellectual property rights in the driver’s seat
Whilst patents will likely take pole position for the industry and will protect many of the inventions that are in the course of being created, the role of the “soft” intellectual property rights should not be underestimated. Trade marks, copyright and design rights will all have an important role to play in differentiating the various CAV technologies that come to market. Much like “traditional” vehicles, the “look” of CAVs will be protected by a combination of trade marks, copyright and design rights, with the associated brands being protected by trade marks (whether registered or unregistered). From an intellectual property perspective, one of the most significant characteristics of CAVs is the convergence of traditional automotive technologies with those from the fields of computing, telematics, telecoms, the internet of things and data analytics. The proprietary software which effectively constitutes the “brains” behind CAVs will be protected by copyright, albeit that this protection is limited to the source code and not the functionality of the software itself. Copyright therefore cannot effectively be relied upon to prevent a competitor from developing its own software to do the same thing.
As the initial basis for protection for other intellectual property rights (for example, patents), trade secrets are also a valuable asset. Unlike patents and other forms of intellectual property rights, they provide a competitive advantage for as long as the trade secret remains secret, which is potentially indefinitely. Classic examples of successful trade secrets tend to emanate from long-marketed products, such as “secret recipes” in the food and drink sector. However, indications are that trade secrets will have a significant role to play as the market for CAVs develops, and industry players will be willing to go to some lengths to protect their trade secrets. Waymo (formerly the Google self-driving car project), for example, has been reported as taking the precaution of purchasing the components for its proprietary LiDAR technology (in effect, the “eyes” that CAVs use to see other vehicles) from multiple sources and undertakes assembly in-house to prevent any single supplier from knowing too much about its technology.
Closely connected to the issue of trade secrets is the highly competitive employment market. As with any emerging technology, the businesses which prosper are those which are able to attract, retain and motivate the most talented engineers and the talent pool in relation to CAVs is still relatively limited. As long as there are not enough technologists to go around, the risks of key personnel being headhunted and lured away to a rival are significant and this high turnover inevitably jeopardises the integrity of trade secrets and confidential information. Legal proceedings claiming misappropriation of trade secrets are already being seen.
The road ahead
The concept of autonomous vehicles or “driverless cars” is among the most potentially transformative developments for modern life, but there remain several significant challenges to the industry, both technological and legal. What is clear is that the intellectual property landscape within the CAV sector is complex and is likely to play a prominent role as fully autonomous vehicles travel the road from science fiction to science fact.