Innovation Spotlight: Autonomous Vehicles - You Ain't Seen Nothin' Yet
Better put maybe, Technology Disruption Spotlight – Autonomous Vehicles – You Ain’t Seen Nothin’ Yet
by: Dan Spaeth, Senior Managing Partner, IP Advisory
We recently took another deep dive into the auto industry sector and the state of IP and related break-through inventions. While getting immersed with the team, an old BTO song suddenly popped up in my head, the main chorus goes, “…you ain't seen nothin' yet, b-b-b-baby, you just ain't seen n-n-nothin' yet” (maybe I should be citing The Cars here but they didn’t pop into my head). The point being, if you think historical innovation in the auto arena is impressive, you really ain’t seen nothing yet.
Stop Horsing Around
We’ve come a long way from the horse and buggy days. It is estimated that horses were first ridden over 5,000 years ago. Various modes of transportation slowly evolved over the centuries. In 1884 there were 150,000 horses in New York City and 4,000 carriage makers in the Northeast. By 1908, there were 100,000 cars and an equal number of horses in NYC. There was no looking back, as more and better paved roads were built and the automobile evolved, the horse and buggy industry quickly died. Interestingly, the bicycle industry preceded the car industry, but was adversely impacted as well, albeit not nearly as dramatically.
Enter autonomous vehicles. After more than a century of innovation with human driven vehicles, autonomous ones are rapidly emerging and poised to transform our lives, businesses, careers and the overall economy. Both autonomous land vehicles and unmanned flying vehicles are on the horizon.
Automating Autonomous Vehicles
Let’s look at the ground-based version. Imagine driverless, loan-free, electrified, lower cost, more comfortable, lighter vehicles with no steering wheel, pedals, traditional front or back seat and no ability to manually take control! Sound scary? You’re not alone. I’m sure the first automobiles were similarly scary to folks accustomed to quieter and slower horse driven transportation.
Car Stats
According to History.com, the 1901 Mercedes was the first modern motorcar. In 1899, thirty American manufacturers produced 2,500 motor vehicles. More than 485 companies entered the business in the next decade. By 1929, the industry consolidated to 44 manufacturers with the Big Three accounting for 80% of production. The Great Depression eliminated the remaining independent manufactures. In the post-war era, the Japanese automakers came to the forefront and the rest is 20th century history.
Fast forward to 2019, total global car and light commercial vehicle sales are approaching 100 million units. U.S. manufacturers are struggling to earn a profit and stay in the game. Estimated global new and used car sales exceed $3.5 trillion. In the U.S., there are many dependent industries and supply chain participants. Here are some example U.S. annual stats and numbers to help paint the picture of potential disruptive impact beyond core auto manufacturing (meant to be illustrative and ignores category overlap):
· gasoline consumption - 143 billion gallons
· gas stations with convenience stores sales - $415 billion (gas, groceries and other items)
· auto insurance premiums - $285 billion
· auto insurance claims - $200+ billion (all coverages such as collision, injury and adjusting expenses)
· auto parts sales - $70+ billion
· the quick oil change industry sales - $8 billion
· the detailing and car wash industry sales - $12 billion
· car rentals and leasing revenue - $45 billion
· ride sharing fees - $50 billion (66 million users)
· off-street parking garages and lots fees - $10 billion
· car battery after-market sales - $4 billion
· licensed drivers 196 million (note - lots of government revenues and jobs)
· speeding tickets 41 million generating $6 billion in fines (note - more gov. revenues)
· driver education - $1 billion in revenue and 21,000 businesses
Here’s an interesting diversion - a 2-car garage in an average sized home covers approximately 15% of the home’s overall square footage. When purchasing a home, 80% of buyers factor in the garage when making their decision. Six famous companies started in a garage: Apple, Amazon, Disney, Google, and Harley-Davidson and the most famous, Hewlett-Packard, the one that launched Silicon Valley.
In the autonomous non-car ownership world, what happens to garages and where will the next big innovators create the next Apple without a garage? Also, will there be a future spike in home garage remodeling projects (we love to brainstorm: AirBnB should be thinking about creating a remodeling service so car-less homes can rent out spare space…how’s that for a free idea?); you’re welcome!
Anyway, back to the topic at hand. Overall, the auto industry and related sectors employ tens of millions of people and make up a huge chunk of our economy. The whole public and private sector ecosystem is dangerously perched on the precipice of disruption.
In the autonomous future, with a smart phone and no car ownership, children, seniors, virtually anybody will be able to hail a ride and get to their destinations more efficiently, economically and safely. Many people will never know the “joy” of driving a car, getting a speeding ticket, filling up at a conventional gas station, visiting an auto body shop or purchasing an auto insurance policy.
Also, there is great potential for improvements in quality of life factors such as traffic congestion (i.e. less stress), commute times and air pollution. Of course, there are some major down sides, such as risks of cyber-attacks, dependence on centrally controlled transportation grids and mother nature’s impact on internet connection dependent technology.
Six Levels of Vehicle Autonomy
The industry still has a long way to go in this whole area. Per Forbes, “the six levels of vehicle autonomy help determine autonomous vehicle capabilities. At the lowest levels of the spectrum, Level 0 cars have no autonomous features. More than 80% of the vehicles on the road today are still at Level 0 autonomy. Companies such as Tesla, Ford, Toyota, Uber, Volvo, and others have been working very heavily to reach the ultimate goal of Level 5 autonomous vehicle operation. Level 4 autonomy offers a vehicle that is fully autonomous, but only in certain conditions. No commercially available level 4 vehicles exist in the market.”
The vision and journey to level 5 autonomy has generated significant R&D investment and IP across multiple patent and technical classifications. Technical areas, features and some key terminology include:
· Fusion and Other Sensors (or “computer vision” from technology such as lidar, radar, vision light cameras)
· Software
· Materials
· Hazard avoidance and real-time predictive AI
· 5G (to connect autonomous cars with each other, the grid and the cloud - or V2X “vehicle to everything”)
· Enhanced predictive maintenance diagnostics and safety risk mitigation
· Voice activated passenger assistance such as route modification
· Electrification and advanced battery technology
· In car infotainment and services
· Platooning (self-driven vehicles following each other)
The above certainly is not an all-inclusive list. However, to illustrate the depth and breadth of IP and competition in this area, we ran some patent analysis reports on “Fusion Sensors Environment,” a key component of the autonomous vehicle technical platform. The results are highlighted in our Limestone Generated Patent Landscape report included in Table 1 below. As shown in our report, this is a hard to research area (factor of 9) with 10,302 U.S. patent references.
Table One: Limestone Automated Patent Landscape report
Digging into a separately generated list of top 100 patent assignees and related data , we find the following:
· Top 100 “Fused Sensor Environment” assignees – 5,676 patent references
· 1,528 patent technical classifications with 382 designated as best fit by Limestone
Top 15 U.S. patent assignees:
1. TOYOTA MOTOR
2. GOOGLE INC
3. FORD GLOBAL TECH LLC
4. IROBOT CORP
5. GM GLOBAL TECH OPERATIONS
6. DONNELLY CORP
7. WAYMO LLC
8. HONDA MOTOR CO
9. IBM
10. AUTOCONNECT HOLDINGS LLC
11. AT&T INTELLECTUAL PROPERTY I LP
12. ROBERT BOSCH GMBH
13. MAGNA ELECTRONICS
14. DENSO CORP
15. NISSAN MOTOR
Starting with this type of patent analysis, we can quickly zero in on relevant technical areas and assist the client and/or outside counsel with white space analysis, competitive analysis, claims mapping, validity analysis, identification of licensing options and other valuable exercises. One key observation entails the fact that many previously unknown competitors for this technology component appear on the landscape. With more focused analysis and research, we can help determine if such companies are risks, opportunities or not relevant. We can also help better align business and IP strategy to assure both are in synch.
In closing, it will be fascinating to see how a multitude of current and new players come together to develop critical parts of the autonomous vehicle platform. Unlike 1910, when hundreds of legacy buggy and emerging car manufacturers were taking the next decade to let the technology unfold, the pace and nature of change will continue to increase, putting pressure on leaders to have well defined and nimble business strategies encompassing complex highly advanced technologies.
Furthermore, expect significant complication and intervention from local, state and federal governmental units and standards setting bodies - they will surely play a huge role as this area develops further.
Henry Ford who was famous for saying many things, including, “any customer can have a car painted any color that he wants so long as it is black,” would surely marvel at the possibilities of the future if he were alive today.
Will your product or service be the equivalent of the next Model T?
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