Patenting activity can be analyzed to understand how automotive companies are reacting to this threat. The four largest patent holders in the auto sector are Toyota/Denso, Robert Bosch GmbH, General Motors/Delphi and Honda. In this analysis again, Denso is included with Toyota and Delphi with GM. The chart below shows the number of U.S. electronics patents by year for each of the major patent holders. (All classes of electronic devices, circuit designs, communications systems, data control and wireless systems were included in this analysis.) Over this six-year period, the number of electronics patents has increased 28 percent. During the same time period, general automotive patents issued to the same companies have remained relatively unchanged.

The semiconductor industry has always been a seething IP ecosystem. This is extending into automotive parts and systems, where perhaps the most visible recent case was the landmark KSR v. Teleflex placed before the U.S. Supreme Court in 2007. The invention in question concerned an accelerator pedal connected to an electronic throttle. This case revolved around the definition of "obviousness" in patent claims and forced the court system to clarify the legal test for obviousness. By comparison, the automotive industry remains relatively calm, but SI expects this to change as the semiconductor IP culture becomes further ingrained in the car.

Then there is China. According to McKinsey and Co., the demand for automobiles exceeds 20 percent annually; the opportunity for manufacturers is irresistible. The business cuts both ways as global companies seek to enter the Chinese market and Chinese companies want access to the rest of the world.

Chinese car makers Geely Automobile and Chery Automobile have ambitious plans to sell offshore. The patent and trademark situation in China is murky, complicated by the fact that many Chinese companies are state-owned. BMW is negotiating with Shuanghuan Automobile regarding a car model called the CEO, which resembles the discontinued BMW X5. In 2005, GM settled a lawsuit with Chery Automobile concerning the design of the Chery GQ that allegedly copied key aspects of the GM Spark.

China is also the leading source of counterfeit auto parts, which costs that industry $12 billion a year. Still, global manufacturers are actively patenting in China to increase market access and erect competitive barriers. Japanese companies lead the way, with Toyota/Denso increasing the number of issued Chinese patents from 152 in 2001 to 645 in 2005.

The trends are clear. Increased silicon and explosive markets in China, where patent policy is volatile, will require large adjustments to automotive IP strategy. This process is under way as the major vehicle manufacturers increase their arsenals of electronics patents. n

John H.F. Scott-Thomas (johnb@ semiconductor.com) is senior analog engineer at Semiconductor Insights, a CMP Technology company. He holds a PhD in physics from MIT.

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