Automotive Technology Convergence Reminiscent of Smartphone Patent War Era

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Here are the intellectual property trends that patent owners in technology-related fields need to consider for the coming year:

Patent rights strong in realm of 'software controlling hardware'

In 2016 as the post-Alice patent quality clean-up continues expect many patents will be struck down by the eligibility tests of Section 101. However, there are still strong opportunities for creating and enforcing patents in the software realm – specifically software controlling hardware. We have seen - and expect there to continue to be - significant technical analysis activity in support of licensing activity in this area. These analyses often demand an interdisciplinary approach combining software and hardware reverse engineering, however, the efforts continue to be worthwhile for licensors.

Patent market begins cautious recovery

Optimism that the patent marketplace is at or close to bottom is in the air. This doesn't mean all is rosy, the market has evolved and is more conservative than in years past. "We're seeing a lot of extreme caution in the patent deals market," said Mike McLean, SVP IP Services, TechInsights. "Patent assets undergo thorough testing before any deal is struck." In the era of the Patent Trial and Appeal Board, portfolios containing patents that have survived validity testing will stand out. Validity, evidence of use, family coverage of desired jurisdictions, and potential for continuations will all contribute to a successful sale.

Europe now a primary litigation venue but diligence key to success

The US is a less attractive environment for patent assertion and we will continue to see a shift of litigation efforts to Europe. The advantages of using Europe come at the expense of lower damages settlements and a high burden of preparation. Parties using Europe need to be exceedingly well prepared, with thorough evidence gathering up front, or risk failure.

Are the smartphone wars coming to automotive?

The technology convergence that we saw with the smartphone is happening in automotive, with consequences ecosystem-wide. The connected car, a stepping stone towards autonomous vehicles, has the potential to replicate the IP and market disruption we last saw in a significant way with the smartphone wars. Non-traditional automotive suppliers are rushing to secure a piece of a connected car ecosystem forecast to exceed $40Bn by 2020 whilst firms already well established in parts of the automotive value chain are branching out into less traditional areas. Advanced Driver Assistance Systems (ADAS) are a key area of collaboration and innovation. Expect the patent activity in this space to heat up.

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