The auto industry's transformation from manufacturing traditional vehicles to creating what today is often likened to "computers on wheels" has catapulted the industry to the forefront of technology innovation. But the transformation has also ushered in some new challenges. One of the biggest is a sharp increase in the rate of patent litigation in the sector — a trend that is only expected to rise even more dramatically in the near future.
What can auto companies do to protect themselves in this ever-changing and more competitive patent secondary market? A lot, if they're proactive.
Historically, large automotive manufacturers and their suppliers have been reluctant to sue each other for patent infringement. Many competitors of equal size have cross-licenses, which is based on the prevailing patent policy set by the National Automobile Chamber of Commerce in 1914 that inaugurated a cross-licensing policy among its members that numbered at its peak 131 in 1922.
This policy lasted until 1969, but its spirit continues today. The convergence of new functionalities in automobiles, however, has caught the interest of a host of new intellectual property, or IP, rights holders because of the sheer number of technologies involved.