After Ford’s success against the Automotive Body Parts Association in a patent infringement case, design patents are becoming increasingly important to the US automotive industry; particularly as it focuses more on autonomous vehicle development, according to sources.
In-house counsel at car companies and automotive suppliers explain that automotive firms are looking to attain competitive advantage in the lucrative driverless car market; and one way they’re looking to do that is by distinguishing themselves from other manufacturers through product design.
Along with trade dress and shape mark applications, companies are seeking to protect these designs through design patents; which sources say is partly why there has been a considerable uptick in design patent filings over the past few years (see graph).
Erich Andersen, corporate vice president and chief IP counsel at Microsoft, points out that driverless cars lend themselves particularly well to design patents because of the number of new modules built into them.
“I’m not surprised that the automotive sector would view design patents in a similar way to Apple, for example, which obviously has a strong focus on hardware and consumer devices,” he says. “Cars are increasingly transforming into what one might view as the largest form of mobile devices in the world. Their insides are becoming computers with large batteries, connected to the internet and each other – and so when manufacturers think about the design elements of what they are building, they think about design patents.”
He adds that Microsoft, for its part, has licensed its patent portfolio through the Open Invention Network (OIN), and notes that auto companies and companies in other sectors are increasingly looking to leverage shared resources.
The principal counsel at a car company in the US points out that that the automotive industry also has a lot of experience in automotive design, whereas new and less experienced players often will not. Auto companies are also becoming more involved in activities with suppliers that they have less control over than they might have done in the past.
“Those automotive designs will be a big factor in distinguishing one auto maker from another and it will become increasingly important to protect them,” he says.
Litigation successBut perhaps the main driver behind the uptick in automotive US design patents has been the need to build stronger IP portfolios and become more assertive in an increasingly litigious industry; and the boon that Ford’s success with design patents last July has given car companies.
The ABPA sued Ford in the US District Court for the Eastern District of Michigan seeking a declaratory judgement of invalidity of two design patents. On appeal, the Federal Circuit rejected arguments that the design’s aesthetic appeal showed that the patents were improperly directed to functional rather than ornamental aspects of an article, and were thus invalid.
The case was directed at standard truck parts, but it has broader significance for driverless car stakeholders in that it has reinforced the importance of design patents and is part of an overall portfolio strategy.
Car companies, prior to connected and driverless cars, generally did not have to assert their IP or defend themselves against competitors because of the industry’s non-litigious culture. Automobile companies with a US presence had invested in design patents because their products lent themselves well to this form of protection and those patents were useful in combatting counterfeit part makers.
As sister publication Managing IP reported last year, car companies look to fight counterfeiters in any way they can because of the harm to the public that can occur when fake and inferior products are sold.
But the automotive litigation culture has started to change since the convergence of technologies in driverless cars introduced new and more litigious players into the market, such as telecoms and software companies, and ushered in the standard essential patent wars.
Patent infringement cases are now emerging around the globe, such as the Sharp v Daimler case in the German courts that was launched last August.
“Design patents have been under utilised in the automotive industry; and Ford for one has shown that you can protect parts successfully with these protections in its case against,” says the car maker principal counsel.
“Typically car companies did not want to bear the cost of litigation when they were mostly going against knock-off part makers from places such as Taiwan. If you knock one down another will pop up, and it can be difficult to enforce these patents.
“But now the economic conditions are changing, you are and will may see more automotive OEMs start to defend their turf more rigorously,” he adds.
The senior vice president of IP at an electronics manufacturer adds that automotive companies now appear to be waking up to IP protection. Not only has the recent Ford win given these companies confidence to assert their design patents, but the fact that they are now being sued for patent infringement is making them more bullish with their own portfolios.
That development, of course, makes building strong patent portfolios more important.
Car companies are relative newcomers to the world of competitive litigation; but with more patents being asserted against them, they are quickly learning to give as good as they get.
Should the convergence of technologies continue to progress in the automotive market – as most believe it will – patent litigation numbers in the car industry may start to rival software, pharmaceuticals or telecoms.
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