Knowledge & News

Electric vehicles and the future of patents

18 June 2019

Off the back of ongoing improvements in battery technology and car charging infrastructure, the electric vehicle (EV) market is growing. Recent research from McKinsey indicates double and occasionally treble digit annual growth in the market since 2010. 
 
With the EV market approaching critical mass – the point where EV becomes the ‘new normal’ in the automotive market – it’s not surprising that more and more businesses and innovators are entering the market. And, as Dyson’s recent move into the EV space indicates, it’s not just the traditional car manufacturers jostling for positon.

While much of the innovation behind an electric vehicle comes from traditional car manufacturers, there are other elements such as batteries and electronics, where companies from outside the automotive space may have more expertise. 

The risk for car manufacturers is the loss of market share to companies like Dyson which, while not being steeped in automotive history, are nevertheless disrupting many markets with novel technologies. 

This phenomenon is not unique to the EV market. In the realm of self-driving vehicles also – where software innovation is key – we see manufacturers losing market share to tech and software companies. This recent report from the European Patent Office, for example, shows that of the 20 top patent filers in the self-driving vehicle space, only a minority are car manufacturers. 

Patently vague

In a challenge to the automotive industry, James Dyson has said that the industry has missed opportunities by trying to develop EVs based on existing vehicle models. The approach taken by Dyson has been to start from first concepts. Dyson has also stated that the patent filed for the EV is “deliberately light on specifics”.
 
It’s not uncommon to file broad patents initially. Filing broadly is a good way of both exploring the patent landscape (by finding any ‘prior-art’ documents that describe the same innovation) and of ring-fencing a potentially widely applicable, and highly profitable, technical innovation. Dyson has form here and has built a world-leading business around disruptive technologies and defending the associated intellectual property (IP). 
 
The automotive industry in no exception to this disruption. While manufacturing remains essential to the process of creating EVs, battery technology and electronics are also a key part of the process. In the automotive market generally it is estimated by Morgan Stanley that in the near future the hardware will account for just 40% of the value of vehicles, with software accounting for 40% and content accounting for 20%. 

For automotive manufacturers then technological disruption poses a clear challenge, but how to respond?

Developing IP strategies

Dyson’s patent is a bold move into an emerging market where everything is to play for. 
Filing a patent however is only half the IP challenge. Getting the subsequent strategy right will be essential for companies looking to grow and capture the EV market. Whether to expand internationally and where, whether to enter licensing or collaboration arrangements with competitors or whether to bring new technical expertise in-house, all of these decisions will be critical and all require a solid understanding of what IP is owned and how it can be exploited. 

For those competing in this market, ensuring early on that IP strategy is aligned with wider business strategy may be the difference between success and failure. 
 

Authors

Andrew Hartley

Andrew Hartley Senior Associate Birmingham (UK) Chartered (UK) and European Patent Attorney

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