13/06/2016
Following on from last month’s blog about the upward trend in the sales and number of patents granted for alternative powered vehicles, patenting activity for the automotive sector as a whole also appears to be on the up, according to the Thomson Reuters annual “State of Innovation Report”, published recently.
The Thomson Reuters report summarises trends in 12 different sectors of innovation using patent grant data from 2015. Of the 12 sectors, 11 saw an increase in the number of patents granted in 2015. Only biotechnology was down and only by 2%.
The automotive sector in particular saw an increase of 8% in the number of patents granted between 2014 and 2015 to 166,867.
Within the automotive sector, patenting activity for alternative powered vehicles continued to outpace other areas of automotive innovation and was up by 15% from 2014. All but two of the 12 automotive subsectors saw an increase from 2014 to 2015, with safety (-2%) and steering systems (-7%) being the only fallers.
Automotive sector: top 5 areas of innovation in 2015
| % of sector | Sub-sector | Patents | % change |
|---|---|---|---|
| 21% | Alternative powered vehicles | 37,844 | 15% |
| 11% | Navigation systems | 19,753 | 7% |
| 11% | Safety | 18,551 | -2% |
| 11% | Transmission | 20,175 | 9% |
| 10% | Seats, seatbelts and airbags | 18,165 | 34% |
Source: Thomson Reuters
Although the report does not give a breakdown of the patenting activity within the alternative powered vehicles subsector, it makes for interesting reading when it comes to the companies responsible for patenting within the automotive sector as a whole:
Automotive sector: top 5 global innovators in 2015
| Position | Company | Inventions | Country |
|---|---|---|---|
| 1 | Toyota | 4,214 | Japan |
| 2 | Hyundai | 2,469 | South Korea |
| 3 | Bosch | 2,390 | Germany |
| 4 | Denso | 2,169 | Japan |
| 5 | Honda | 2,039 | Japan |
Source: Thomson Reuters
Topping the charts is Toyota, which is far ahead of its competitors in terms of the number of patent families granted in 2015, with Hyundai a distant second, closely followed by Bosch, Denso and Honda. As with the top 5 list above, the top 10 list within the automotive sector is dominated by Asia, with six of the companies being based in Japan, one in South Korea, and one in China (Beiqi Foton). The remaining four are based in Germany (Bosch, Daimler) and the US (Ford, GM).
There is no place in the top 10 for VW, despite its huge R&D spend and market share.
Interestingly, two of the top five automotive innovators are suppliers (Bosch and Denso), rather than car manufacturers. No longer simply making parts to order for a single car manufacturer, suppliers are responsible for a large proportion of the innovations within the automotive industry and this is illustrated by the presence of Bosch and Denso in the top 5 list.
This is an encouraging sign that suppliers are able to innovate and take ownership of the resulting IP, rather than being required to transfer IP over to the manufacturer for whom, or with whom, the products have been developed. This has not always been the case, with some suppliers finding themselves routinely losing out on the IP rights arising from collaborations with car manufacturers. By retaining IP rights, suppliers may be freed up to sell their products to more than one customer and may be able to use the IP as leverage during contract negotiations with car manufacturers. It can also encourage further innovation by allowing suppliers to benefit directly from further product developments.
Judging by the whopping patenting figures for Toyota, Hyundai and Honda, and the fact that the remaining companies in the top 10 list are all OEMs, rather than suppliers, we are far from a point at which car manufacturers are reduced to the role of a dumb assembler of systems conceived, developed and manufactured entirely by others, as has been predicted in the past. That said, suppliers are in a strong position and car manufacturers will need to continue to innovate if they wish to remain in the driving seat.
This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.
