As Vehicles Become Computerized, NPE Patent Owners Are Targeting Automakers

Automakers, high-tech software program corporations, and electronics corporations are more and more going through related challenges as autos turn out to be computer systems on wheels.  For instance, the worldwide chip scarcity is delaying the manufacturing of phones, laptops, and vehicles alike. Unsurprisingly, these similarities are additionally extending to how the automotive sector is being focused by non-producing entities (NPEs) for patent infringement regulation fits.

Software program and electronics corporations have been traditionally among the largest targets for patent infringement regulation fits, together with these introduced by NPEs. Sometimes, corporations interact in patent infringement fits, or patent wars, to seize market share by excluding rivals from the market. Nonetheless, for growing markets, corresponding to the electrical and autonomous automobile (E/AV) market, the excessive value of patent litigation makes patent wars counterproductive. That is why some leading E/AV makers are trying to lure opponents to the market by deliberately not implementing their patents, anticipating that it will spur market progress and consequently improve demand for his or her merchandise. It’s attainable that these corporations anticipated to revert to patent wars throughout the decade since they proceed to construct their patent portfolios and the E/AV market is quickly growing, which creates the excessive stakes that justify patent litigation.   

Excessive-tech software program and electronics corporations, then again, are acquainted targets of NPEs and have vital expertise defending towards patent regulation fits. Based on a report launched by RPX Corp. on October 12, 2021 (“Report”), NPEs had their busiest third quarter since 2016, including 595 defendants to litigation. Out of the 13 sectors within the chart under, the e-commerce and software program, client electronics and PCs, cellular communications and gadgets, and semiconductors sectors constituted 57% of all defendants added to litigation by NPEs in 2014. In 2019 and 2020, these sectors continued to comprise the bulk with 1,260 (59%) defendants added and 1,242 (53%) defendants added, respectively.

As autos turn out to be more and more computerized, NPEs are focusing on the automotive business. Certainly, the Report notes a “marked increase” in NPE litigation hitting sure industries, with the automotive sector having the biggest share improve from Q3 2020 to Q3 2021 at 182%. In Q3 2021, an NPE launched a new campaign towards an car firm concerning automobile providers that use “GPS and cellular systems to provide emergency services.” There have been additionally present campaigns with new litigation, together with an NPE focusing on automotive GPS navigation and one other NPE focusing on in-vehicle infotainment techniques. Some present campaigns even pivoted to embody automotive expertise this quarter; for instance, a non-public equity-backed NPE added car corporations and elements suppliers to litigation over USB media ports.

As illustrated within the chart under, the automotive sector had round half the variety of defendants added in Q3 2020 relative to the cellular communications and gadgets sector and the semiconductors sector. Notably, nevertheless, a 12 months later the automotive sector virtually had the identical quantity of defendants added because the semiconductors sector and is quick approaching the variety of defendants added within the cellular communications and gadgets sector.

Desk 1:  Defendants Added to Litigation by NPEs, (RPS Rational Patent, “Q3 in Review”, web page 7,)

The e-commerce and software program sector and the buyer electronics and PCs sector had essentially the most defendants added in Q3 2021. But when the present developments proceed, the automotive sector is on monitor to surpass the semiconductors sector and start to catch as much as the opposite electronic-type sectors.

It’s unclear what impact the hanging improve in NPE litigation may have on the automotive business. Digital corporations have been already waging patent wars on each other when NPEs began focusing on them, not like automotive corporations which have been avoiding patent litigation whereas the E/AV market developed. Though the automotive business might want to proceed to keep away from such litigation, the NPEs seem to have a unique agenda and are poised to use their belongings and experiences to the automotive sector.

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