Monday, September 24, 2007

Patent philosophy in the car industry

John Scott-Thomas has an article in EETimes titled Silicon in autos stirs patent plans which includes the text:

The automobile is transforming from an essentially mechanical device to an electrical one. In 1980, electronic equipment made up less than 1 percent of the cost of a vehicle. In 1990, this had grown to 7 percent, and in 2007, it's 22 percent.

IPBiz notes that the automobile industry tends to buy finished products (in the electrical realm) from third party vendors, rather than developing these products itself, which is relevant to patent infringment considersations (indemnity?).

Scott-Thomas also notes:

The large difference in IP culture between the two industries has a number of causes. The semiconductor industry has always had an active IP licensing policy. R&D costs are high. Technical innovation causes rapid obsolescence in semiconductors, and profitable product cycles are often measured in months. As well, reverse engineering and advanced measurement techniques enable reliable technical support for patent infringement. Aggressive patent licensing is natural in this environment, and semiconductor companies are experienced in this. Notably, Freescale, Infineon and ST all have large product lines outside the automotive sector and are accustomed to active licensing campaigns.


A common licensing strategy in semiconductor campaigns is to use a semiconductor patent to negotiate a license with a "downstream" product vendor. Downstream products incorporate the offending semiconductor device. For example, if a patent assignee can assert the patent against an integrated circuit (IC) manufacturer, and that circuit is used in a cell phone, the assignee can apply to the larger cell phone maker (and concomitant larger revenue stream) for further compensation.

The high silicon content in vehicles exposes auto companies to this tactic. Automobiles can be reverse-engineered to provide technical support in the same way semiconductor patents are analyzed.

IPBiz notes that folks such as Intel are the ones pushing for "weak patents" in patent reform 2007. IPBiz also notes that Scott-Thomas did not mention the Selden patent, or Henry Ford's take on patents.


Post a Comment

<< Home