As evolutionary as the changes to Toyota’s third-generation Prius may seem on the surface, beneath the familiar sheetmetal lurks enough new technology to justify over 1,000 new patents. The Wall Street Journal reports that through three generations of the Prius, Toyota has generated over 2,000 patents on hybrid technology, half stemming from the latest generation alone. Toyota’s hybrid patent filing nearly doubles the number filed by Honda, its closest hybrid competitor. And the WSJ casts this “thicket of patents” as Toyota tightening its stranglehold on the hybrid market.
Toyota won’t disclose how many lawyers it employs for IP and licensing duty, or how much revenue it gains from its patents. Toyota’s cross-licensing with Ford, for example, does not generate revenue. The real effect of Toyota’s patent strategy though is to push other firms to leapfrog the established technology. Nissan’s all-electric strategy, GM’s Extended-Range Electric model, Honda’s persistence with IMA “mild” hybrids all flow from Toyota’s careful patenting of its Synergy Drive system.
Though the circumstances encourage innovation and experimentation, Toyota’s long-term approach make possible the luxury of conservativism. While other firms work around Toyota’s intellectual property, the world’s largest automaker can focus on dialing performance in and wringing the costs out of its tried-and-true system.
In my view, intellectual property protection has the perverse effect of delaying the progress of technology more than it does to promote it.
Typically periods of rapid industrial improvement and expansion happen when and where intellectual property protection is minimal.
Are these patent filings numbers for filings in Japan or patent filings in the US?
Someone was explaining to me the other day that Japanese patent law requires one to patent every component, as opposed to US patent law which allows you to patent an entire system, and any components within the system are protected.
Patents can be double-edged. Of course it protects their intellectual property but on the downside it can stifle the progression of the innovation as Horner mentioned and it can lead to competitors banding together, developing alternate technologies, widening adoption and spreading the costs.
All Toyota has to do is talk to Sony for some lessons.
Mainly, companies file patents on technology they want to produce; not to block others, but to make sure they can sell without being sued.
The Prius may be the car that killed Toyota. The rest of their product line is suffering, as they are over focused on Prius.
If they can’t make money selling hybrid cars, they may try to make it from patent litigation or licensing fees.
Twotone
If it’s the Chinese that steals an IP, then the typical response is: I will never buy a Chinese car until they respect IP.
If it’s Toyota that’s holding an IP, then the response is: Toyota is anti-progress by blocking others an easier path.
Very predictable.