STLR Link Roundup – November 7, 2013

High-Tech, “Green” Cars Could Be the Next IP Battleground

In the last five years, the number of patents filed per quarter increased from 20 to 90 by automobile manufacturers. These patents all relate to hybrid or electrical vehicle technologies. Automobile manufacturers are worried that the litigation war affecting the smartphone industry will spread to electric and hybrid vehicles. The automobile industry has been steadily expanding, and questions by potential consumers about battery reliability, driving range, and the high cost of electric vehicles also affect this impending IP war. As car companies seek to expand their electric offerings, patent litigation may become the main method of competition, as companies try to force competitors out of the market entirely by winning infringement suits and getting their competitors’ patents declared invalid.

As electric cars become more popular, some companies are starting to think of transitioning from the luxury market to the mass-market, most notably Tesla Motors. Tesla Motors frequently compares itself to Apple, and uses Apple’s strategy of marketing a desirable concept coupled with an attractive product. If that comparison holds true, however, Tesla Motors may find itself at the forefront of the impending IP war. The economic battle over these cars is also ramping up. Car manufacturers are cutting prices for their electric cars and responding to pressure from the US government to increase research on electric car technology. In Europe, Renault suspended three of its top executives for leaking electric car technology, and has launched the biggest investigation into industrial espionage in the company’s history in response. As the price of oil increases, the value of this electric car technology increases, and the IP legal field is a natural battleground for manufacturers competing for market share.

IBM Threatens to Sue Twitter For Patent Infringement

IBM notified Twitter that it likely infringes three IBM patents days before Twitter’s initial public offering (IPO). Before officially commencing litigation, IBM invited Twitter to try and negotiate a business solution, likely a license agreement of some sort. Twitter stated that it is a target for litigation, both by its competitors who have larger IP portfolios to use as leverage and by patent trolls. This may be true, as Twitter vowed to only use its patents defensively, although that pledge may change in time. Twitter executives believe that they have they have viable defenses to IBM’s claims of infringement, so the company may seek litigation if IBM’s “negotiation” is not to their liking.

Interestingly, IBM chose to try negotiating with Twitter before filing a lawsuit, even though common practice in this field is just the opposite. Suing right before a company’s initial public offering is an old tactic. Yahoo sued Facebook and later Google for allegedly infringing its patents shortly before their initial public offerings. However, there is some disgust with IBM’s decision to threaten suit, given that the patents at issue are very broad and might not be found valid.

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