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The question of who controls the future of self-driving cars may be answered in a lawsuit happening right now in a California courtroom. In the lawsuit filed in February, Waymo (Google's self-driving car unit) accuses Uber of patent infringement and trade secret misappropriation because Uber bought a $700 million start-up company formed by a former Waymo engineer who Waymo says stole its technology with Uber's knowledge.
“This case is one of the first major battles over driverless car technology, and it promises to be a real food fight,” said Ryan Koppelman, a partner in Alston & Bird's IP Litigation Practice and co-leader of the firm's Connected & Autonomous Vehicle Group. “Both companies are angling to capture a large share in the burgeoning world of self-driving vehicles. The global market for autonomous driving hardware components alone is expected to grow from $400 million in 2015 to $40 billion in 2030. The stakes couldn't be higher.”
Koppelman sat down with Inside Counsel to share his insights on who exactly will have the so-called keys to self-driving cars. As an IP litigation attorney, he has handled dozens of IP trade secrets cases on various transportation-related systems and has advised multiple clients on autonomous vehicle technology.
“There is a massive market battle brewing among several big players for the future of self-driving cars and the coolest tech around,” he explained. “The fight includes the old-school car companies like Ford and Nissan that want to still be in the mix. They each have significant self-driving car initiatives. But they are being pressured by the newest car company, Tesla, who could be in the best position to go to market first.”
Tesla's CEO has teased a possible demonstration this year of one of its cars driving itself from Los Angeles to New York. This is pushing Waymo, Google's self-driving car unit, which was in the lead for a while with all its self-driving cars that have been tooling about in Mountain View, CA, for a few years now. At the component level, NVIDIA is supplying super-computing chips and artificial intelligence software to Tesla and others, which is arguably the new engine of the cars. NVIDIA is competing with rival AMD and with Mobileye, which was just bought by Intel for over $15 billion. There are also companies like Uber and Lyft whose on-demand taxi-like business model stands to benefit by replacing drivers with sensors, super computers and software.
“If Uber or Lyft can develop their own self-driving cars, then they could cut out the middle man and potentially profit even more,” he said.
According to Koppelman, this case is huge because two of the big players in this space are clashing. Google recently spun off Waymo as separate unit, but Google is a big investor in Uber. For a while, it looked like there could have been a nice partnership, but not anymore. Waymo is IP theft and infringement and looking to get a court ordered injunction against Uber to set it back in its goals of developing a competing self-driving car.
Historically, major shifts in technology have oftentimes been accompanied by huge IP disputes. In fact, there were huge patent litigation cases brought by Alexander Graham Bell and his companies against competitors back in the 1870s and 1880s. According to Koppelman, more recently, there have been major patent wars in the mobile phone industry involving Samsung, Apple, Nokia, Ericsson, Motorola and others.
“Patents can give their owners monopoly like rights, and that power allows patent owners to dominate lucrative markets or demand royalties for potentially several generations of the technology,” he explained. “People have been wondering when self-driving cars would arrive on our streets. The fact that these big players are battling it out in the courtroom is a historic indicator that there is a big technology shift underway.”
These days, protecting IP starts with mining your employees for inventions, incentivizing them to invent and disclose inventions to the company for patenting and having legal processes in place to make that happen is critical, according to Koppelman. Then, there needs to be security and legal steps taken to keep competitive business and technical information secret, so that it can be protected by trade secret laws and not easily transferred to other companies.
“Innovative tech companies do not want to see the fruits of their hard labor and secret sauce to pop up at a competitor after an employee leaves or there has been some security breach,” he said. “And then once you've gone through those efforts to protect everything, you may eventually have to file suit to enforce the valuable rights.”
So, what role does IP play in the world of driverless cars?
“Companies in the space have been quietly building their patent war chests, but without commercial self-driving cars on the road yet, there has not been much interest in enforcement and litigation,” said Koppelman. “This is often the case before a real commercial market has developed. It's like juicing a raisin when there are no damages to go after.”
Today, the most important forms of IP for self-driving cars are patents and trade secrets. The value of patents comes from the fact that independent development is not a defense to patent infringement. It is possible to come up with some technology on your own and still infringe a patent. However, according to Koppelman, this is not true for trade secrets. Trade secrets are very valuable because to get a patent you must tell the world how you did it, and eventually when you patent expires, it goes into the public domain.
He added, “Trade secrets can in theory last forever and in industries where it is hard to learn what competitors are doing, some good technical secrets can provide some real business advantages.”
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