{"id":1273,"date":"2020-07-30T16:26:04","date_gmt":"2020-07-30T04:26:04","guid":{"rendered":"https:\/\/www.jamesandwells.com\/?p=1273"},"modified":"2022-01-28T16:27:35","modified_gmt":"2022-01-28T03:27:35","slug":"open-patents-and-automotive-innovation","status":"publish","type":"post","link":"https:\/\/www.jamesandwells.com\/nz\/open-patents-and-automotive-innovation\/","title":{"rendered":"Open patents and automotive innovation"},"content":{"rendered":"<h6>My twin-passions of intellectual property and motor vehicles were\u00a0recently explored, following a relentless search for a seven-seater vehicle that wouldn\u2019t be referred to as a \u2018people mover\u2019<sup>1<\/sup>.<\/h6>\n<p>One of the vehicles I test-drove was a Mercedes Benz (Mercedes) S-Class<sup>2<\/sup>\u00a0GLS400D. From the massaging seats and interactive ambient lighting, to the \u201cHey Mercedes\u201d voice-activated-everything, it was awesome.\u00a0 Unfortunately, given the economic uncertainty of lockdown and the ludicrously small sum of money offered for the trade in of our existing car<sup>3<\/sup>, it was also out of reach.<\/p>\n<h6>A safe competitive advantage<\/h6>\n<p>Mercedes has traditionally used its mass-produced S-Class range to showcase its innovation, the majority of which is safety related. Many now-common features were first introduced to production cars in an S-Class model including: crumple zones; interior padding; a windscreen rain management system; airbags; anti-lock braking systems (ABS); seat belt pre-tensioners, jam protection on electric windows, pre-emptive braking, night vision assist, and traction control.<\/p>\n<p>Presumably recognising that the least-safe aspect of any motor vehicle is the person controlling it, Mercedes\u00a0also built the world\u2019s first\u00a0driverless cars\u00a0in 1980 using the S-Class. In 1995, they followed this up with an autonomous S-Class Munich to\u00a0Copenhagen round-trip. The car\u00a0reached speeds of over 175\u00a0km\/h on the autobahn and even overtook other vehicles. The experiments\u2019 success is said to have heavily influenced other manufacturers\u2019 robot car research and funding decisions.<\/p>\n<p>Mercedes has actively used patents to protect its numerous innovations. In fact, founder Karl Benz patented what is regarded as the world\u2019s\u00a0<a href=\"https:\/\/media.daimler.com\/marsMediaSite\/en\/instance\/ko\/Carl-Benzs-patent-application-on-29-January-1886-Birth-of-the-automobile-130-years-ago.xhtml?oid=9919252#:~:text=The%20birth%20certificate%20of%20the,Imperial%20Patent%20Office%20in%20Berlin.\" target=\"_blank\" rel=\"noopener noreferrer\">first production automobile<\/a>\u00a0in 1886 and even named it the Benz Patent-Motorwagen\u00a0(or \u201cpatent motorcar\u201d). That patent document is now part of UNESCO\u2019s Memory of the World Programme, which also includes the Gutenberg Bible, the Magna Carta, and Johann Sebastian Bach\u2019s Mass in B Minor.<\/p>\n<p>While patenting safety innovations can provide a technical or marketing advantage, others have acted more altruistically. In 1959 Volvo patented the three-point seatbelt and famously released the design into the public domain. Volvo estimates that over a million people have\u00a0<a href=\"https:\/\/www.media.volvocars.com\/uk\/en-gb\/media\/pressreleases\/20505\" target=\"_blank\" rel=\"noopener noreferrer\">survived a car accident due<\/a>\u00a0to this innovation. New Zealand can lay claim to its own altruist, Colin Murdoch, who invented the disposable hypodermic syringe, patented it, then released it into the public domain where it went on to have significant health outcomes.<\/p>\n<h6>Monopolise or don\u2019t monopolise, there is no try<\/h6>\n<p>So, it seems there are two choices: patent and monopolise for commercial advantage, or make the innovation available for all to use? Not quite. As automotive manufacturers like Toyota have recently demonstrated, there is a (pardon the pun) \u2018hybrid\u2019 option known as open patenting.<\/p>\n<p>Toyota is a leading producer of petrol-electric hybrid vehicles, like the Camry and Prius, and over the past 20 years has amassed almost 20,000 related patents. In 2019 Toyota made these \u2018open patents\u2019 \u2013 meaning they are freely available for use provided the company is informed first. Justifying the decision to open its patent book Toyota Representative\u00a0<a href=\"https:\/\/global.toyota\/en\/newsroom\/corporate\/27512455.html\" target=\"_blank\" rel=\"noopener noreferrer\">Shigeki Terashi said<\/a>, \u201cBased on the high volume of inquiries we receive [\u2026] from companies that recognize a need to popularize hybrid and other electrified vehicle technologies, we believe that now is the time for cooperation\u201d.<\/p>\n<p>Securing and maintaining all these patents is a big investment and without the 50-odd royalty revenue streams Toyota previously received from companies which had licensed the patents, how does Toyota benefit? The reality is that in the short term they might not; but Toyota is playing the long game. Whilst Toyota does offer fee-based technical support for adopters of the technology, it\u2019s likely that a more important factor in its decision is regulatory. Currently, Toyota\u2019s technology can only travel short distances solely on electric power. Proposed changes to European Union legislation threaten to rule its hybrid technology out of existence. By making the technology freely available, Toyota presumably hopes to improve its uptake, making it more difficult for legislators to render it redundant. Terashi puts it more neutrally, \u201cIf the number of electrified vehicles accelerates<sup>4<\/sup>\u00a0significantly in the next 10 years, they will become standard, and we hope to play a role in supporting that process.\u201d<\/p>\n<p>This approach to intellectual property is contrary to that employed by another Japanese technological pioneer, Sony, in the \u2018video tape format wars\u2019 of the 1980\u2019s. Sony believed the superior picture and sound quality of its Betamax format would dominate the market, so declined to license its patented technology. Meanwhile competitor JVC licensed its VHS format to any eager manufacturer. JVC\u2019s VHS went on to dominate the home video market for nearly 40 years and made billions in royalties<sup>5<\/sup>, largely due to consumer brand loyalty to the companies that held a license. Sony had to wait until 2008 to gain the upper-hand by inventing (and licensing) its Blu-Ray DVD format.<\/p>\n<h6>It\u2019s not how big your patent portfolio is, but how you use it<\/h6>\n<p>While patenting innovations can provide a competitive advantage, these examples demonstrate that broadening the reach through licensing or open patenting may create further value. All of this requires critical thinking around where patents fit in to a commercial strategy \u2013 something which many companies, even large ones, fail to do.<\/p>\n<p>One thing is certain though, if the technology is a flop it won\u2019t matter which path you choose \u2013 a fact that the owner of UK Patent No GB1058853<sup>6<\/sup>\u00a0\u201cIce block as a substitute for vehicle wheels\u201d is likely well aware of.<\/p>\n<p><em>PS: if you are from Mercedes, Volvo, Toyota, Sony or JVC and are looking for top shelf patent representation in Australasia we would love to hear from you. We\u2019d also love to hear from you if you\u2019ve invented a car that slides on ice blocks \u2013 if only to give you some sound commercial advice about the wisdom of patenting that idea.<\/em><\/p>\n<div class=\"post-footnotes\"><em><a href=\"https:\/\/www.stuff.co.nz\/motoring\/lifestyle-vehicles\/102422879\/whats-on-offer-for-those-who-need-eight-seats\" target=\"_blank\" rel=\"noopener\">1. These vehicles are also known as \u201closer cruisers\u201d due to their association with the \u2018joys of parenthood\u2019.<\/a><br \/>\n<\/em><em>2. The origin of S-Class is the German word Sonderklasse (S-Klasse), meaning &#8220;special class&#8221;. The GLS is certainly that.<br \/>\n<\/em><em>3. Our previous car was a Range Rover and, unfortunately, the demand for supercharged petrol engines that slurp inordinate amounts of gas, regardless of speed, is not presently high (apparently).<br \/>\n<\/em><em>4. It\u2019s nice to see that Mr Terashi is equally unafraid of a good automotive pun.<br \/>\n<\/em><em>5. Liebowitz, S.J. (1995).\u00a0&#8220;Path Dependence, Lock-In, and History&#8221;.\u00a0Journal of Law, Economics, &amp; Organization.\u00a011: 205\u2013226<br \/>\n<\/em><em>6. The invention involves ice blocks being applied as skids to any kind of vehicle that is powered by a jet, propeller, rocket or electrical means. Part of the ice block melts to provide a sliding motion needed for the vehicle to move down a heated steel track or road surface, whilst the other part of the ice block would be kept cold by a freezing machine. The vehicle also has means to replenish the ice blocks. Pure genius.<\/em><\/div>\n","protected":false},"excerpt":{"rendered":"<p>My twin-passions of intellectual property and motor vehicles were\u00a0recently explored, following a relentless search for a seven-seater vehicle that wouldn\u2019t be referred to as a \u2018people mover\u20191. One of the vehicles I test-drove was a Mercedes Benz (Mercedes) S-Class2\u00a0GLS400D. From the massaging seats and interactive ambient lighting, to the \u201cHey Mercedes\u201d voice-activated-everything, it was awesome.\u00a0&#8230;<\/p>\n","protected":false},"author":8,"featured_media":1138,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[62],"class_list":["post-1273","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-patents","insight-resource-articles"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Open patents and automotive innovation - James &amp; Wells<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.jamesandwells.com\/nz\/open-patents-and-automotive-innovation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Open patents and automotive innovation - James &amp; Wells\" \/>\n<meta property=\"og:description\" content=\"My twin-passions of intellectual property and motor vehicles were\u00a0recently explored, following a relentless search for a seven-seater vehicle that wouldn\u2019t be referred to as a \u2018people mover\u20191. 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