Understanding the IP Anatomy of the Automotive Nervous System | Morgan lewis
With more and more new vehicles incorporating cutting edge technology, the next generation of buyers can update their vehicles as often as their smartphones. This appetite for new features and software-defined requirements has made the nervous system of automobiles – the muscular and operational components of a vehicle – increasingly complex. And with this evolution comes systemic challenges, including those related to changing standards, commodification of components, and diminishing differentiation. In light of these challenges, automotive industry companies and boards are more closely monitoring patent claim risks, privacy and data security issues, as well as those associated with the growing prevalence of open source software. in automotive systems – and develop the appropriate intellectual property (IP) strategies to address these risks.
- Automotive infrastructure has changed to reflect the complexities of the world around us, with technologies such as centralized computers, V2V / V2X communication, global positioning systems (GPS), cameras and video capabilities, detection and light telemetry (LiDAR), hardware and software sensors. , battery storage, and more. Everyone from suppliers to manufacturers plays a role in creating this infrastructure.
- Due to these new complexities resulting from an expanded set of players and the cost of these technologies, the commodification of certain components takes place, as does the conversion of designs. As traditional OEMs continue to produce batteries, displays, automotive sub-systems, sensors, chips, and other components, no party can afford to do research and development in all of these different areas. and manufacture them efficiently, which leads to commodification in some designs and components, especially in chips. This has had a huge impact on the automotive market, with chips now being used in various products (e.g. consumer electronics as well as cars) in ways almost unheard of in the automotive industry.
- This commodification has led to cars that look more and more alike, with automobiles in general increasingly becoming consumer electronics, such as cell phones. With many companies implementing the same features, players with a large patent portfolio have the opportunity to assert patents against the industry and earn license revenue. As products become less differentiated and become more and more a commodity, there may be less customer interest in new cars and more price competition.
- When it comes to securing the driver’s personal data collected by cars (e.g. location history, driving events, camera images from inside and outside the car, calendars, contacts, phone call log, infotainment preferences and usage history, voice assistant logs), there have been many global initiatives, such as Project Preserve, which attempt to ensure the security and confidentiality of inter-vehicle and intra-vehicle data collected from automobiles. While useful, the creation of international standards such as UNECE WP.29 from the World Forum for Harmonization of Vehicle Regulations and ISO / SAE 21434 from the International Organization for Standardization have also created compliance risks for companies. . Additionally, increased analytical collection comes with increased liability associated with storage and ownership, especially in light of the number of people with access to a car’s data points.
- Open source software can be complicated for adopters who do not understand the open source development model or who do not correctly confirm that an open source license matches their intended use of the open source software, including any issues related to the open source software. use the software with a proprietary code. Even if a company or user believes they have complied with the terms of the license, sometimes the license will have provisions, such as a requirement for a copyleft licensee to share any open source code they have distributed with applicants. Companies that are not prepared to handle these requests within the license parameters could be exposed to additional legal risks.
There are two types of players in the automotive market: pioneers, who are the first to market new platforms and autonomous and connected hardware, software and interoperability functionalities; and market followers, who can independently innovate on one or more of these aspects, while in some cases reverse engineering or copying other functionality. There are opportunities and risks associated with both paths as the technology-driven market continues to evolve, but both types of players are expected to benefit from the full set of intellectual property protection (patents of utility and design, trade dress, trademark, copyright and trade secrets) to protect their differentiation in their key markets.
For more best practices on how to navigate these opportunities and risks, and the challenges posed by ever-changing standards, commodification of components, and reduced differentiation brought about by new laws and consumers’ desire for new features and software high-tech, please consult Presentation of the IP anatomy of the automotive nervous system, part of the Morgan Lewis Automotive Hour webinar series.