Toyota's patents: High volumes but low quality
04-24-09, 01:09 PM
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Toyota's patents: High volumes but low quality
That's but one of the conclusions in this interesting and informative article:
As Toyota nears Ford in auto patents, it's courting trouble
by Lindsay Chappell - Automotive News
High volumes but low quality.
That's an assessment of how Toyota Motor Corp. stands against its peers — in automotive patents.
Toyota's rapid accumulation of patents has resulted in a body of technology that could be overrun in court by competing patent holders, says Andy Gibbs, CEO of PatentCafe.com Inc., one of the largest patent databases in the world.
"All the automakers hold some patents that are ironclad and some that probably aren't very secure," Gibbs says. "If you look at the quality of the patents, Toyota scores the worst."
Different approaches to patents in Europe, North America and Japan are behind some of the variation in patent quality, he says.
In addition, the large number of patents at the Detroit 3 represents assets that could be sold to raise cash.
Problem patents
Automakers whose patents are most at risk for legal challenges
CARMAKER / TOTAL NUMBER OF PATENTS / PERCENT AT RISK
Toyota / 6,086 / 21%
Ford / 6,375 / 10%
General Motors / 5,992 / 9%
Chrysler / 1,286 / 8%
Volkswagen / 728 / 2%
Source: PatentCafe.com; Automaker Patent Assets Intelligence Report, March 26, 2009
Toyota gaining
Toyota is rapidly gaining on Ford Motor Co. as the auto industry's leading holder of U.S. technology patents, surpassing General Motors and Chrysler LLC. The most recent score: Ford has 6,375 patents, compared with Toyota's 6,086. GM holds 5,992 patents while Chrysler has 1,286, according to a PatentCafe.com report.
According to the patent database, Toyota has surpassed Ford in green technologies.
But Gibbs thinks that at least a fifth of Toyota's patents are legally insecure.
Gibbs was asked to present his patent research findings to the Presidential Task Force on Autos in late March without drawing conclusions about individual automakers. The only commentary in his high-level presentation was that a reform of U.S. processes could benefit automakers if it places more scrutiny on patent applications before they are approved.
Authorities in Europe now subject patent applications to much more intense questioning before granting an award. And even after a patent is awarded, rivals have nine months to challenge it.
Says Gibbs: "I could submit a patent application every day in the United States and probably have a good chance of having it approved, if I could come up with the $15,000 to $30,000 it costs for each application.
"The result in the United States is that patents are granted for a lot of things that aren't true technological innovation and will never stand up to a court challenge.
Patent security became a lively competitive issue after a 2007 U.S. Supreme Court ruling that declared patents must do more than combine existing technologies.
The ruling involved an infringement lawsuit between Teleflex Inc. and KSR International over Teleflex's electronic throttle control patent. The court struck down the patent because it relied on existing vehicle technology.
The ruling signaled that other auto industry intellectual-property rights could be vulnerable to new challenges.
Gibbs thinks the tougher scrutiny in Europe partly explains why Volkswagen AG has a comparatively low number of patents: 728. But his analysis indicates that VW has the fewest number of what he calls "poor patents" that could be successfully challenged.
Tough Europe
Gibbs thinks European attitudes toward patent applications also may explain a phenomenon at Chrysler over the past decade — during which, under control of Germany's Daimler AG, Chrysler had scant patent activity.
Internal company conditions appear to influence innovation. According to the PatentCafe.com study, GM led the industry in applications in the late 1980s until its own financial woes took hold in 1991. GM applications declined through the 1990s, falling below those of Ford and Toyota. But between 1999 and 2003, GM activity again briefly soared to lead the industry.
Then between 2004 and 2006, it sank to nearly zero.
Gold mine
Gibbs thinks the Detroit 3 are sitting on a treasure trove of old technology patents.
"They have a lot of patents they simply need to unload," he says. "It costs about $15,000 a year to maintain and protect every patent, and Ford and GM could easily sell off at least 1,000 each."
Such a sale could mean cash of about $100 million. Old patents are auctioned off each year in a public sale in the United States and traditionally sell for $100,000 each.
But large companies such as Ford and GM have legal staffs that must sift through their patents in search of properties to sell. And the value of a patent is not always clear.
"GM might have patented something in 1999 that was technologically irrelevant by 2005," Gibbs says. "Or something may appear to have no commercial value when, in fact, it's the underpinning for an entire vehicle platform.
"Patent filings really tell you more about an automaker's future than reading their 10-K."
http://www.autonews.com/apps/pbcs.dl...NA03/904200319
As Toyota nears Ford in auto patents, it's courting trouble
by Lindsay Chappell - Automotive News
High volumes but low quality.
That's an assessment of how Toyota Motor Corp. stands against its peers — in automotive patents.
Toyota's rapid accumulation of patents has resulted in a body of technology that could be overrun in court by competing patent holders, says Andy Gibbs, CEO of PatentCafe.com Inc., one of the largest patent databases in the world.
"All the automakers hold some patents that are ironclad and some that probably aren't very secure," Gibbs says. "If you look at the quality of the patents, Toyota scores the worst."
Different approaches to patents in Europe, North America and Japan are behind some of the variation in patent quality, he says.
In addition, the large number of patents at the Detroit 3 represents assets that could be sold to raise cash.
Problem patents
Automakers whose patents are most at risk for legal challenges
CARMAKER / TOTAL NUMBER OF PATENTS / PERCENT AT RISK
Toyota / 6,086 / 21%
Ford / 6,375 / 10%
General Motors / 5,992 / 9%
Chrysler / 1,286 / 8%
Volkswagen / 728 / 2%
Source: PatentCafe.com; Automaker Patent Assets Intelligence Report, March 26, 2009
Toyota gaining
Toyota is rapidly gaining on Ford Motor Co. as the auto industry's leading holder of U.S. technology patents, surpassing General Motors and Chrysler LLC. The most recent score: Ford has 6,375 patents, compared with Toyota's 6,086. GM holds 5,992 patents while Chrysler has 1,286, according to a PatentCafe.com report.
According to the patent database, Toyota has surpassed Ford in green technologies.
But Gibbs thinks that at least a fifth of Toyota's patents are legally insecure.
Gibbs was asked to present his patent research findings to the Presidential Task Force on Autos in late March without drawing conclusions about individual automakers. The only commentary in his high-level presentation was that a reform of U.S. processes could benefit automakers if it places more scrutiny on patent applications before they are approved.
Authorities in Europe now subject patent applications to much more intense questioning before granting an award. And even after a patent is awarded, rivals have nine months to challenge it.
Says Gibbs: "I could submit a patent application every day in the United States and probably have a good chance of having it approved, if I could come up with the $15,000 to $30,000 it costs for each application.
"The result in the United States is that patents are granted for a lot of things that aren't true technological innovation and will never stand up to a court challenge.
Patent security became a lively competitive issue after a 2007 U.S. Supreme Court ruling that declared patents must do more than combine existing technologies.
The ruling involved an infringement lawsuit between Teleflex Inc. and KSR International over Teleflex's electronic throttle control patent. The court struck down the patent because it relied on existing vehicle technology.
The ruling signaled that other auto industry intellectual-property rights could be vulnerable to new challenges.
Gibbs thinks the tougher scrutiny in Europe partly explains why Volkswagen AG has a comparatively low number of patents: 728. But his analysis indicates that VW has the fewest number of what he calls "poor patents" that could be successfully challenged.
Tough Europe
Gibbs thinks European attitudes toward patent applications also may explain a phenomenon at Chrysler over the past decade — during which, under control of Germany's Daimler AG, Chrysler had scant patent activity.
Internal company conditions appear to influence innovation. According to the PatentCafe.com study, GM led the industry in applications in the late 1980s until its own financial woes took hold in 1991. GM applications declined through the 1990s, falling below those of Ford and Toyota. But between 1999 and 2003, GM activity again briefly soared to lead the industry.
Then between 2004 and 2006, it sank to nearly zero.
Gold mine
Gibbs thinks the Detroit 3 are sitting on a treasure trove of old technology patents.
"They have a lot of patents they simply need to unload," he says. "It costs about $15,000 a year to maintain and protect every patent, and Ford and GM could easily sell off at least 1,000 each."
Such a sale could mean cash of about $100 million. Old patents are auctioned off each year in a public sale in the United States and traditionally sell for $100,000 each.
But large companies such as Ford and GM have legal staffs that must sift through their patents in search of properties to sell. And the value of a patent is not always clear.
"GM might have patented something in 1999 that was technologically irrelevant by 2005," Gibbs says. "Or something may appear to have no commercial value when, in fact, it's the underpinning for an entire vehicle platform.
"Patent filings really tell you more about an automaker's future than reading their 10-K."
http://www.autonews.com/apps/pbcs.dl...NA03/904200319
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