Blog | Automotive IP & Legal World Summit 2018
9th July 2018 |
This June we attended the Automotive IP & Legal World Summit in Berlin, an intimate event which saw much frank and open discussion between Automotive OEMs, Tier 1s, new entrants and their service providers.
Similar to previous events, the summit maintained a focus on collaboration, new entrants and fast-paced innovation. However, over the course of the two days, three more specific themes became clear as they were consistently returned to and thoroughly discussed across a variety of panels and presentations.
1) OEMs are losing their negotiation power
For decades, OEMs were dictating industry, using draconian terms for their suppliers; all ownership and control sat with them. But as the pace of innovation started picking up and profitability demands increased, OEMs turned into assemblers and entire systems were acquired from the likes of Bosch, Continental, Denso, etc.
This, in turn, started to shift the innovation and negotiation power from OEMs, but there is still enough history (or “baggage”, if you prefer) in the OEM/supplier relationship to let this only gradually slip. And, more importantly, the reliance on multiple supply sources meant that suppliers were almost interchangeable.
That is no longer the case. Small tech companies with hot technology (eg Mobileye or Quantumscape) or large key tech partners (eg Apple, Microsoft) either get acquired at high premiums or can dictate the terms. Nowadays, the OEMs are the interchangeable ones.
2) Electrification is happening, Autonomous is still far
There are many initiatives surrounding autonomous drive (AD) but there are equally many issues that are far from being resolved.
Electrification has some issues also, but what was shared in Berlin was concerned with implementation options and improvements, rather than unavoidable hurdles.
For AD, however, there are still many fundamental issues yet to be solved. Three key examples of these were debated at length: data ownership (GDPR plays a big role), cybersecurity (how to keep these “phones on wheels” secure from hackers), and 5G connectivity (will the infrastructure be there in time?).
3) SEPs is still a sensitive issue
Standard-essential patents are a hot topic, especially with telecom players involved in discussions. It is pretty clear that law firms are preparing for much more dispute in this space between such savvy players (e.g. Ericsson, Nokia, etc.) and the automotive competitors that are “late to the party”.
Worryingly, no NPE activity has been seen yet, notably global litigation campaigns. Even more than so, SEPs and similar standardised technologies can threaten with injections, which remain the largest fear amongst OEMs. For suppliers, on the other hand, fear of unreasonable indemnities and potentially devastating exposure is a big headache.
With topics like these and the engaged discussions which followed in Berlin, it is once again evident how much disruption is happening in this space and the extent to which people are working from limited information and are having to make difficult decisions. This is very encouraging from a data and analytics point of view as more and better access to information will be hugely beneficial.
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