Comments from in-house counsel and specialist outside counsel
Insight into EV patenting challenges
Analysis of NPE litigation landscape
The world is changing and so is the automotive industry – with big implications for intellectual property counsel in the sector.
For proof, look no further than the development of connectivity and the subsequent rise of Avanci.
Earlier this month, Avanci launched its latest patent pool aimed at automakers, covering technologies that are essential to the 5G, 4G, 3G, and 2G standards.
But while connectivity has stolen the headlines lately, it’s not the only technology that’s transforming the sector.
The need for more environmentally friendly and energy-efficient vehicles has led to higher levels of patenting in the electric vehicle (EV) battery space, say sources.
“EVs are growing dramatically,” says Robin Asher, principal at Miller Canfield in Michigan.
“It’s all the craze. Everything we seem to be working on is either related to batteries or some other aspect of EVs,” he says.
Meanwhile, the use of software in vehicles means the threat of litigation from non-practising entities (NPEs) is never far from counsel’s minds.
Worth the time?
The rise of new automotive tech has brought IP challenges for automakers and suppliers.
Jason Skinder, chief IP counsel at auto supplier Lear Corporation in Michigan, says he’s worked with IP that protect methods of manufacturing EV products. This type of IP raises questions over whether patenting is worth the resources.
“You might not be able to determine whether something’s infringing,” he explains.
There are a couple of ways that companies can approach this problem.
Skinder says it could be worth seeking to protect every possible method of manufacture, which makes it more likely that competitors would infringe at least one of them.
If the innovations are important, he says, it can be a good idea to convince the business that patenting is worth it.
“It may cost more money and time, but if it has strategic importance to the business, patenting is something that has to be considered,” he says.
Patent hopefuls in this sector also need to make sure their engineers are on board.
Gunnar Heinisch, managing counsel at Toyota in Texas, says the most significant challenge in the EV and software spaces is to make sure engineers and developers are proactive in thinking about patents.
Heinisch adds that Toyota hires new people each year, so it needs to continue to educate its employees about IP issues.
The business also hosts an annual innovation event where its R&D team gets together to celebrate inventors who have received patents within the past year. It also rewards those inventors with an incentive system.
“We have tremendous support from management,” says Heinisch.
Firms can also try and protect EVs and other innovations as trade secrets, but this can be difficult when customers and competitors have access to manufacturing facilities, Skinder of Lear warns.
“Things you may have wanted to keep trade secret in the past may not have been kept secret.
"People who are not employees of the company may have access and that really affects how you approach those types of innovations," he says.
Perfect partners
While auto companies remain wary of competitors, they’re also looking at collaborations.
Sony and Honda founded a joint venture Sony Honda Mobility in 2022 to produce EV batteries, for example.
And, in July 2023, seven automakers – General Motors, BMW Group, Honda, Hyundai, Kia, Mercedes-Benz and Stellantis – announced a joint venture to build an EV fast-charging network in the US and Canada.
But collaborations bring their own IP issues, Heinisch at Toyota warns.
“We need to make sure we are able to be respectful of our partners’ IP and take care of it and not share it beyond where it needs to go in our company,” he says.
It’s also important for businesses to consider what to do with any new IP that arises out of collaboration.
Skinder notes that there have been a lot of partnerships between suppliers because many of these companies are very specialised and may not be able to develop a new project on their own.
“If one party brings a larger stake to the table, they may feel they should own a larger piece of the resulting product. Not everything is going to be a completely equal partnership,” he says.
Vexing venues
While collaborations in the industry may be on the rise, relations between auto companies and NPEs aren’t quite as cordial.
The prevalent use of software means automotive firms must continue to protect themselves against NPEs.
One controversial issue has to do with where NPEs can file lawsuits and whether they have venue under TC Heartland v Kraft Foods.
In that ruling, the US Supreme Court set out that patent cases had to be brought in districts where defendants were incorporated or had regular and established places of business.
The Court of Appeals for the Federal Circuit explored this question in Volkswagen in March 2022. The court found that the presence of dealerships wasn’t enough to determine that automakers had regular and established places of business in an area.
This ruling was considered good for car companies because it made it harder for plaintiffs to sue them in jurisdictions such as the District Court for the Western District of Texas or the Eastern District of Texas, which are generally considered more plaintiff-friendly.
Daniel Yonan, director at Sterne Kessler in Washington DC, says some NPEs have now become more sophisticated about trying to get lawsuits heard in their ideal venues.
Some have been filing lawsuits against automakers' foreign parent companies, which can be sued anywhere in the US.
Yonan adds that he’s currently representing a client with a foreign parent company that’s being sued in an inconvenient venue.
If the motion to transfer gets denied, his team wants to appeal the matter to the Federal Circuit.
“Our latest battle is to try to fight that and try to change the law so that it reflects where companies actually do business through their US subsidiaries,” he says.
Such a change would be welcome for a lot of automakers, many of which do have parent companies outside the US.
And as automakers refine their legal strategies, they’ll be even better positioned to adapt as technology continues to disrupt their industry.
