Most read 2019: Automotive braces for potential electrification standards and SEP surge
In the first in a series of articles on automotive standards, Patent Strategy asks Audi, WiTricity and ChargePoint whether SEPs will play an important role in car electrification and what that might mean for the industry
One minute read: More automotive standards and standard essential patents are likely to emerge because of the electrification of cars. Chargers, both cable and wireless, in particular, are ripe for a standardisation overhaul to increase consumer confidence in electric vehicles. Standards have already been developed for cable chargers and more car companies are making their cable charger patents open source, which means it is unlikely for there to be any big SEP skirmishes. But there are at least two big patent holders in the wireless charging space - and one of them has told Patent Strategy that licensing and monetisation are focus points for them.
With Honda announcing last week that all its cars will be electrified by 2022 and Volvo launching a new brand called Recharge for its fully-electric vehicles, the journey towards broad automotive electrification – as a part of a wider revolution in autonomous, connected, electric and shared driving (ACES) – is well underway.
The change offers automotive firms huge opportunities to appeal to a growing ‘green consumer’ base; but in-house counsel point out that as electrification becomes mainstream, the move might also introduce a new licensing component into the mix as the need to develop standards for electric vehicles increases.
Car companies may be resistant to the prospect of emerging standards and a potential influx of standard essential patents (SEPs) into another area of the ACES movement because of skirmishes in the connected arena. They are still sore from heated negotiations on what is fair reasonable and non-discriminatory (FRAND) and are awaiting the results of the Nokia v Daimler saga.
But these businesses are aware that electrification standards development is inevitable for some electric components. The speed of development in the electrification space has ushered in an array of competing solutions and approaches for components such as batteries and chargers.
And while there is little need to create interoperability standards for batteries, for example – an area where businesses will probably seek to gain a competitive edge – there is a strong business imperative to do so for chargers so that consumers can use them in any given electric vehicle.
“In those areas where car companies can see a competitive advantage, there probably will not be standards,” says the vice president of IP at an electronics company and auto supplier in the US. “But in other areas, such as car chargers, that is where a lot of electric car companies will see the benefit of having interoperable car chargers.”
Matthias Schneider, chief licensing officer at Audi in Germany, adds that he too can see standards emerging in the vehicle charging space – particularly for wireless charging, where there are already at least two major SEP holders.
“The charging base will be in a garage or on the street and the car will have to be in a specific place and be positioned in a way that it can get power wirelessly and efficiently. That is an area where there will be standards because it involves typical communication and co-ordination issues.”
The need for standards in the wireless charging space will become more important when the technology is rolled out at a public level, he adds. While charging is only being done at home, there is not the same need to move beyond proprietary charger models.
Scott Witonsky, vice president of IP and licensing at wireless charging company WiTricity in Massachusetts, agrees that standards are needed to spur consumer confidence and thereby drive the deployment of wireless charging and other electrification technologies.
“They help with interoperability. We want a Nissan car to be chargeable on a charger bought from BMW or vice versa. Safety and quality is another reason, and making sure object detection and other safety features are incorporated broadly.”
How charger standards development will ultimately affect the industry will be determined by a number of factors, including market dynamics and how assertive patent owners intend to be.
To help answer that question of whether we are due a new FRAND war in the electrification space – or perhaps just a few minor skirmishes – Patent Strategy has reached out to some companies to get a glimpse at their future strategies.
WiTricity, a spin out of the Massachusetts Institute of Technology (MIT), has one of the largest wireless automotive charging portfolios in the world; with more than 900 patents granted worldwide – including SEPs – and over 550 pending, according to its website.
The business’s portfolio growth is a result of its own R&D efforts, the fact that it is an exclusive global licensor of foundational MIT and University of Auckland patents in automotive wireless power transfer, and its acquisition of Qualcomm’s Halo project patents in February 2019.
Witonsky at WiTricity says the business’s strategy is to consolidate wireless charging patents and bring them under one roof, thereby make licensing easier and more efficient for interested implementers. The monetisation and enforcement of these patents are also key focuses for the business.
“Monetisation through licensing is our goal because it is the most efficient way for us to recoup the investment we have made in this technology and in the standards. If there are unwilling licensees, we will be prepared to litigate because we have to.
“Car makers and some suppliers are not necessarily equipped for licensing because they have previously not had to deal with it, and were more concerned with matters such as privacy and supply issues in the past” Scott Witonsky at WiTricity
“It is not fair for someone to implement the technology and not take a licence when others have.”
He adds that the company has a flexible policy on where to license in the supply chain. WiTricity will license at the tier-one or OEM level because it often licenses its technology alongside its patents; although it would expect to achieve the same sort of price with either level.
Witonsky says that while it is less efficient to license at tier-one level because there is a higher transaction cost in tracking and trying to license to additional entities, the tech transfer should be done at that level so suppliers can implement inventions into various modules.
Licensing at that level might also help ease the friction that has emerged in the connected tech arena between telecoms and car companies during WiTricity’s negotiations. “A lot of the current battles going on are happening because some organisations, including Avanci, won’t license at the tier-one level,” says Witonsky.
“Car makers and some suppliers are not necessarily equipped for licensing because they have previously not had to deal with it, and were more concerned with matters such as privacy and supply issues in the past.”
Witonsky says he hopes car companies will embrace the changes in the industry and consider them more carefully in terms of their hiring and attorney training practices.
“They should realise they are not buying a component or a commodity,” he says. “They are buying technology, and as such their negotiation dynamics should evolve.”
The mass rollout of wireless chargers is still a few years off, however. In the meantime, the cable chargers arena is also ripe for a standardisation overhaul that stakeholders hope will spur consumer confidence in the reliability and safety standards of electric vehicles in the near future.
Standards already exist in this space, but they are often at odds with one another. The type-two charging cables and sockets are very much the standard in Europe, for example, while North America uses the SAE J1772 standard and Tesla has its own ‘superchargers’.
Marissa Galizia, head of product portfolio Europe at charging station company ChargePoint in the Netherlands, points out that this standardisation is occurring in a broad way at a regional level, and that it likely to continue in the right direction.
In an indication of further standardisation, the CCS charger has become more popular in Europe and North America, and is the model Tesla has adopted in Europe for fast charging. Galizia adds that Tesla’s adoption of European charging standards and the fact that it is the only OEM left using its own proprietary charger in North America suggests that a standardisation overhaul is well underway.
“In terms of cables and plugs, we see a lot more standardisation in electric vehicles than household plugs in Europe and America at least, for example.”
But it does not seem that there will be the same bid to monetise SEPs in the cable charging space as there has been in the connected section of the ACES revolution or, indeed, that might occur in the wireless charging space at some point.
For one, cable charging innovations – like many inventions in vehicle electrification – are being released into the open source realm. In a bid to push vehicle electrification forward, Toyota last April said it would allow royalty free access to nearly 24,000 patents for hybrid cars and other vehicles using electrification, including to 2,200 charger-related patents.
In 2014, Tesla similarly said it would not pursue litigation against anyone who used its patents in ‘good faith’.
Charger standardisation may indeed one day lead to some FRAND skirmishes, but it seems that day may be a long way off.