Hybrid cars – the value of patent strategies in innovation

Hybrid cars – the value of patent strategies in innovation

Mike Lloyd and Justin Blows, Griffith Hack

Contents

• Why study hybrid car patents• Evolution of hybrid cars and hybrid car patents, and the dominance

of Toyota• How to get around Toyota 1) – Lead user innovation• How to get around Toyota 2) – Use of alternative technologies• Use of Network Patent Analytics to rank patents and patent

portfolios• Summary of lessons learnt

Background to study

• Griffith Hack wishes to show how patents support the development of clean and sustainable technologies (‘clean technologies’)

• Hybrid cars are an excellent example of a commercially successful clean technology, with good patent data available

• Summary details of all worldwide patents in which ‘hybrid’ and ‘car’ were found within two words of each other within the patent specification were downloaded from Thompson Innovation

• Patent data was extensively analysed to show the relationship between patent filing and clean tech innovation

What is a hybrid car?

• Hybrid cars tend to feature:– A combination of petrol and electrical energy sources– Electrical energy partially collected during braking

• Now in production in Melbourne • Hybrid cars are available or announced from Toyota, Honda, BMW, Audi,

General Motors, Ford, Nissan……and even Porsche

2010 Porsche petrol/electric hybrid

1899 Porsche (designed) petrol/electric hybrid

1906 Pieper patent for petrol electric hybrid car

US patent 913,846

1969 General Motors (GM) experimental hybrid

1997 Toyota Prius/electric hybrid

• Only about 60 made, due to their high price and marginal fuel consumption improvement

Toyota start filing hybrid car patents in 1994

Culmative Toyota hybrid car patent families, 1980-2007

0

1000

2000

3000

4000

5000

1990 1995 2000 2005

Priority year

Cu

lma

tiv

e t

ota

l o

f p

ate

nt

ca

r fa

mil

ies

1994 – Toyota publiclycommits to doubling

fuel efficiency

1997 – First Toyota Priusreleased in Japan

2000 – Toyota Priusreleased in US

2008 – Total sales of Toyota hybrids exceed

1.7 million

Toyota rapidly built up a patent lead over other car companies

Culmative hybrid car patent families, 1990-2000

0

500

1000

1500

2000

2500

3000

3500

4000

4500

1995 1997 1999 2001 2003 2005 2007

Priority year

Cu

mla

tive

to

tal

of

pat

ent

car

fam

ilie

s

Toyota

Nissan

Other Japanese carcompaniesHonda

US car companies

European carcompanies

Toyota have filed 43% of known hybrid car patent families filed by car companies

Known hybrid patent families filed by car companies

43%

15%

9%

11%

8%

7%

6%

1%

0% 10% 20% 30% 40% 50%

Toyota

Nissan

Honda

Other Japanese car companies

All US car companies

All European car companies

Korea - Hyundai and Kia

Chinese car companies

Percentage of known hybrid car patents filed by car companies

Car company patent filings have been supported by supplier filings

Known hybrid car families filed annually

0

500

1000

1500

2000

2500

3000

3500

4000

1990 1992 1994 1996 1998 2000 2002 2004 2006

Non-Japanese car companies

Non-Japanese suppliers

Japanese suppliers

Japanese car companies

Toyota dominates hybrid car sales

US hybrid vehicle sales 2007-2008

Toyota/Lexus77%

Ford7%

Honda10%

Nissan3%

GM3%

Source: Hybrid cars.com

Toyota’s early filing lead has led to a self reinforcing patent/sales ramp up

Toyota hybrid patent family filings and vehicle sales

0

200

400

600

800

1000

1200

1991

1993

1995

1997

1999

2001

2003

2005

Pat

ent

fam

ily f

ilin

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(pri

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ty

year

)

0

50

100

150

200

250

300

350

Wo

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Family patent filings Hybrid car sales

Toyota’s patent strategy has been deliberate

“The first-generation Prius held more than 300 patents on its hybrid technology. The second-generation Prius claimed 370 patents. Since then, the Prius nameplate has had more than 2000 patent applications filed across the world, with the third-generation Prius filing 1000 on its own”

Bob Carter, Toyota US Division Group Vice President and General Manager, 2009

How to get around Toyota?1) Lead user innovation in plug in hybrids

• “affordable plug-in hybrids are a decade away”, – Toyota, 2006, see http://www.calcars.org/calcars-news/508.html

“Lead user innovation” in practice..

Which in turn is leading to more patents..

How to get around Toyota? 2) Consider alternative technologies

Captures and reusesenergy from braking

BMW, Honda, Toyota, Nissan, Ford, GM, Mercedes, Audi……

Electric motors in hybrid car can power car alone

Toyota, (Nissan, Ford and Mazda under licence from Toyota), GM in 2010

Electric motors assist conventional motor

Honda, Toyota, Nissan, Ford…..

Plug in recharging

of batteries Third party suppliers to Toyota hybrid customers, GM in 2010, Toyota in 2011

Pure electric (non hybrid) – no conventional motor

Mitsubishi, Renault, Tesla

Available from:

But which patents are the best? Using Network Patent Analytics to rank patents and portfolios

Patent citations

Citations in turn lead to other citations..

US 54870691996

US 56129481997

US 56129481997

US 56129481997

And 65 other patents..

US 46792271984

US 46303141986

US 36050191971

US 48887671989

US 50955351992

US 51955761993

US 5283780,1994

US xxxx199x

US 56129481997

US 56129481997

Other citations

US 56129481997

US 56129481997

Other citations

And so on, until we end up with a network of citations (this schematic shows a network of the most central 5500 patents in the hybrid car study)

This network in turn can be used to determine the most important patents…

Most central patents: Hybrid car patent study

An alternative patent network structure – stem cell patents

Top ranked hybrid car patents

Rank Patent number Priority year

Patent summary description Patent owner Citing patents

Cited patents

1 US 6,209,672 1999 Combination of regenerative braking and conventional car engine

Paice Corporation 114 174

2 US 5,343,970 1992 Electric motor shares drive with petrol motor

Paice Corporation 256 37

3 US 5,806,617 1995 Managing conventional motor in hybrid to optimise motor efficiency

Equos Research 103 18

4 US 6,338,391 1999 Hybrid car with turbocharger Paice Corporation 30 185

5 US 4,351,405 1978 Hybrid car with electric and petrol engine

Hybricon Incorporated

142 15

6 US 5,428,274 1991 Drive control apparatus of series hybrid vehicle

Toyota 33 23

7 US 6,554,088 1998 Only runs petrol engine when high torque needed

Paice Corporation 49 216

• Paice Corporation was established in 1992 to develop hybrid drivetrains, i.e. before Toyota moved into hybrids.

• Toyota has been held to infringe Paice’s 1992 US patent 5,343,970, the second ranked patent in our list of hybrid car patents.

• Litigation between Paice and Toyota is continuing.

Just who are Paice Corporation?

Top ranked hybrid car patent applicants

Rank Assignee Relative importance index*

Number of patents in data set

1 Toyota 100 3635

2 Honda 71 1435

3 Nissan 62 1644

4 Ford 60 809

5 General Motors 23 428

6 Peugeot-Citroen 22 255

7 Hitachi 21 393

8 Volkswagen 20 127

9 Paice Corporation 18 28

10 Renault 16 209

* Top ranked applicant = 100

Lessons from IP strategies in hybrid car innovation

• Hybrid cars have been around for over a century, but without major commercial success until recently.

• This changed when Toyota chose to invest heavily in both drivetrain development and patents, leading to dominance in both patents and sales, and patent licenses to competitors.

• Strategies to deal with Toyota’s patent suite include:– Patent licensing (Ford, Nissan, Mazda)– Alternative hybrid drivetrains (BMW, GM, Honda)– Plug in conversions (A123 Systems and others)– Pure electric cars (Mitsubishi, Nissan, Tesla)

• This data suggests that the patent system has encouraged technology investment by both Toyota and its competitors.

• Hybrid car patents can be ranked in importance using Network Patent Analysis. This shows the success of the early patents filed by US drive train developer Paice Corporation.

Optimum innovation and IP strategies may depend on your current technology and IP position

Primary: direct suppliers of primary products or services

Secondary: suppliers to direct suppliers or consumers of products or services

Ahead of leading technologies

Behind leading technologies

Position in relation to leading technologies

Degree of industry engagement

File early and file often

Toyota

File broad patents ahead of big players

Paice

-Carefully review infringement risks-Try to push technology into new directions- Acquire or license from technology leaders

GM, Ford…

-Develop product improvements not supplied by main players, but sought by lead users-Understand infringement risks

Suppliers of hybrid plug-in kits

Acknowledgements

• George Mokdsi from Griffith Hack for the patent search• The results in this presentation was based on patent data retrieved from the

core patent collections available through Thomson Innovation which is provided by Thomson Reuters.

• Doris Spielthenner of Optimice for analysing the patent data using Network Patent Analytics