Part III: Patent protection issues in the Internet of Things (IoT) space (continued)

Parts I and Part II of this series included discussions related to obtaining and enforcing patent protection issues in the IoT space, and examples of how to structure claims to avoid Alice rejections.  In Part III of this series, we will look into the current landscape and major players in the IoT space, with particular emphasis on autonomous vehicles, in an effort to illustrate opportunities for intellectual property protection.  Specifically, we look at new developments in the IoT space related to licensing opportunities for IoT-based technologies.

            As mentioned in Part I of this series, a major aspect in the IoT space involves vehicle to vehicle (V2V) communication and/or vehicle to infrastructure (V2I) communication.  As a specific example Gartner Research has recently forecast that new vehicles equipped with data connectivity will increase from 6.9 million per year in 2015 to a total cumulative shipment of automobiles equipped with data connectivity to 250 million by 2020.  However, such enthusiastic estimates may need to be tempered slightly due to changes in the U.S. political landscape.

At the end of 2016, the U.S. Department of Transportation issued a proposed rule that would require automakers to include V2V technologies in all new light-duty vehicles by 2020.  As an all-seeing network of intercommunicating vehicles is required for full vehicle autonomy, such a rule would have accelerated the path towards autonomous vehicles.  However, an executive order signed Jan. 30th, 2017 now makes it unlikely the legislation will be enacted. 

In the absence of such legislation, it may be expected that the road toward autonomous vehicles may be stymied.  However, even without the legislation, it appears likely that many automakers will follow the lead of General Motors, which just recently started shipping 2017 Cadillac CTS sedans, making them the first vehicles in the U.S. market to include V2V communications technology.  In other words, it appears automakers are likely to proceed with equipping vehicles with V2V communications technology in anticipation of deploying autonomous vehicles by 2020, regardless of the political legislation. 

Thus, it is imperative that in order to compete in the connected car revolution, companies establish patent portfolios that will ensure protection in the near future, and ensure establishment of competitive positions in the marketplace.  In Parts I and II of this series, we discussed some strategies for obtaining patent protection in the IoT space.  Another option, is licensing of technologies related to connected cars.

As an example, earlier this year Microsoft agreed to license its patents related to Internet-connected cars to Toyota.  Such a collaboration serves to emphasize that the connected car is, at its core, a software challenge.  Further, the deal between Microsoft and Toyota may signal to other automakers of the willingness of Microsoft to partner with others.  For example, although Toyota is the first to obtain such licenses, Microsoft has worked with other automakers and related companies for years, including Ford, Kia, Nissan, Volvo, BMW, Harman, etc.  Thus, the new patent initiative may indicate that Microsoft and other tech companies may become more willing in the near future to licensing agreements.  Consistent with that idea, at a recent Connected Car Detroit conference, VW of America’s Frank Weith stated that “It’s a whole different set of players that are now engaged in the auto industry”. 

Thus, the take-home message is that the connected car is quickly becoming a reality, and one option in terms of establishing competitive market position may come from licensing agreements with tech giants such as Microsoft and others.