On May 31, 2024, the 2nd Intellectual Property Frontier Automotive Forum (IFAF 2024) was successfully concluded at the DoubleTree by Hilton Hotel Shanghai East Jinjiang. With the theme of "Value and Innovation: Reshaping the New Trend of Intellectual Property and Compliance in the Automotive Industry Chain", the forum brought together intellectual property professors and scholars, corporate IPRs, and patent, trademark, and brand protection experts in the automotive industry from all over the country in Shanghai.
At the conference on 30 May, Qu Miao, a partner at King & Wood Mallesons, shared her views on "New Intellectual Property Disputes in the Automotive Sector: Changes Brought by SDV".
table of contents
First, the changes brought about by the development of smart cars
2. Emerging types of intellectual property disputes in the automotive field
3. Future outlook and offensive and defensive suggestions
The rise of smart cars is the biggest change in the automotive industry. Similarly, although the automotive industry has always been an active and important industry for intellectual property issues, almost all kinds of new intellectual property issues are brought about by the rise of smart cars.
First, the changes brought about by the development of smart cars
1. Intellectual property issues related to the introduction of software into SDV
THE NEW PROBLEMS BROUGHT ABOUT BY THE DEVELOPMENT OF SMART CARS ARE LARGELY THE CHANGES BROUGHT ABOUT BY SOFTWARE DEFINED VEHICLE (SDV). The traditional automotive industry mainly relies on various hardware devices and their connection and cooperation, which is a typical mechanized hardware manufacturing industry. Traditional intellectual property rights and innovations in the automotive field are also based on the traditional three major parts and four major institutions of automobiles. The specific forms of core IP are mainly patents and trade secrets.
With the development of SDV, software has become a core innovation point in all aspects of automotive research, development, use, and service. In addition, SDV brings the introduction of Internet technology, in addition to traditional software, but also directly involves network, cloud, data and other related fields. SDV's core technological achievements will not be separated from various forms of software (firmware, operating systems, drivers, APIs, application software, data, etc.) or embedded software hardware, and its manifestations will also be reflected in various types of software intellectual property rights, such as software copyrights, trade secrets, software patents, etc.
2. Smart cars bring changes to the industrial ecology
The ecology of the traditional automotive industry is a linear supply chain with vehicle manufacturers as the core. The manufacturer of the whole vehicle is the "king in the crown" and the absolutely strong party, and all auto parts dealers and vehicle manufacturers form a linear hierarchical relationship. AUTOMAKERS SPIN OFF THEIR VEHICLES INTO SEVERAL SYSTEMS AND ENTER INTO AGREEMENTS WITH SO-CALLED TIER-1 SUPPLIERS (TIER 1 SUPPLIERS) TO SUPPLY ONE OF THE SYSTEMS IN THE VEHICLE. The first-tier supplier then signs a contract with the Tier2 supplier (second-tier supplier) for procurement, and completes the production and supply of its own supply part. As a result, disputes related to intellectual property rights that have arisen in the past, whether they are infringement or contract disputes, are relatively clear.
In the smart car ecosystem, the linear relationship between manufacturers is gradually blurred, and it has evolved into a more complex ring or network relationship. OEMs may need to coordinate with different suppliers, and suppliers at different levels may need to collaborate on development, or they may build on the same platform or API. These complex ecological relationships will lead to more disputes over intellectual property ownership, intellectual property disputes related to API interfaces, and unfair competition disputes.
2. Emerging types of intellectual property disputes in the automotive field
In the past, patent disputes, trade secret disputes, and design disputes were the most common in the automotive field. The parties to the dispute are generally between suppliers or car manufacturers, and the competition and confrontation are very significant. In the future, due to the common situation of cooperative R&D and external licensing, disputes related to technical cooperation and technology licensing may occur, and various software-related intellectual property disputes will also arise due to the introduction of software factors. Here are a few typical types:
1. Technical cooperation disputes
In the process of technical cooperation between two or more parties, there are the following frequent dispute scenarios:
(1) Background: The boundaries and content of intellectual property rights are unclear
Background: Intellectual property is a very important description and definition of the intellectual property rights owned by both parties before the start of the cooperation. Because once the R&D teams of both sides start the cooperation process, there will be an exchange of information and ideas, and the results produced will belong to the results under the cooperation. Therefore, it is very necessary to clear assets and verify capital before cooperation.
The reason for disputes is often that the background intellectual property in the contract is generally a list of documents. The name of the document is written on the list, but the exact content is unknown. Since the legal counsel who review the agreement can usually only check the text of the agreement and cannot control the implementation process of the subsequent agreement, a large number of background IP-related documents stipulated in the contract only stay at the file name, and the subsequent delivery, content and scope screening have become problems. It's easy to get into disputes.
ignores whether the other party has indeed delivered the complete background art intellectual property content. Therefore, when the court investigates the facts in the lawsuit, the parties cannot reasonably explain and prove whether the contract was submitted when the contract was signed, whether it was shared and delivered, etc.
(2) It is not clear which party has made a "substantial contribution" in the process of cooperation
In many development processes, innovation results come from multiple interactions between multiple people. Which of these can be identified as "substantial contributions" is a difficult point in defining ownership. This difficulty comes from the traces (supported by evidence), and what is the "essence" of innovation? In the process of resolving disputes, we often need to restore the R&D process and the actions and contributions of the parties at that time. This will involve the extent to which the remaining evidentiary material (or witness testimony) shows a discrepancy between the facts and the actual facts, and whose contribution constitutes the essence of the innovation.
In the process of cooperation, each team has a clear division of labor and responsibilities, and the work is regularly recorded and archived, which is a very good working habit and process.
(3) In the process of cooperation, it is difficult to define the delivery of technical documents and results
In addition, whether the relevant technical documents and results are delivered in the process of cooperation is also a place that is prone to controversy. Because there are a lot of intermediate processes in the process of development cooperation, technology, information and the delivery of results. The exchange of this information is difficult to have a more rigorous process and traces like the final acceptance. As a result, whether exchange and delivery have occurred is often a difficult fact to ascertain. These issues may lead to disputes over whether or not to fulfill contractual obligations, whether specific information has been accessed, and whether results have been jointly developed.
(4) Definition and attribution of derivative technological achievements
In the actual development scenario, the definition of derivative technical achievements is often not so clear. Derivative results are usually defined in the agreement. However, if these definitions are not deeply integrated with the development scenario, it is easy to be on paper, and difficult to explain and identify in the actual scene, resulting in controversy.
(5) Breach of confidentiality agreement/trade secret infringement disputes
Along with collaborative development and access to each other's trade secrets, disputes over breach of confidentiality contracts or trade secret infringement are also likely to occur. There are many unique features in software trade secret-related cases, which are different from the definition of rights and the method of determining infringement of software copyright. Careful consideration should be given to the cause of action when exercising rights. In addition, there is also a diversity of carriers of software trade secrets.
2. Disputes related to data and personal information
With the digitalization and intellectualization of automobiles, automobiles have become a super-large tool for the generation, collection, and carrying of personal information and Internet of Things data. Over the years, there have been a number of discussions or practical cases regarding the ownership, access, and protection of EDR information. It deserves the attention of all industry players.
In addition, in-car data disputes not only involve personal information and privacy protection issues and network security issues, but also involve issues of data asset rights and interests, such as equipment information in the Internet of Things, including vehicle performance, speed, positioning, etc., which are of high value for R&D and product control. In this regard, a large number of data-related unfair competition disputes may arise, just like in the Internet platform or terminal field.
3. Software License Disputes
With the development of SDV, a large number of software licensing agreements will arise and exist in the smart car industry. Disputes over breach of contract related to software agreements are also likely to increase. Disputes over software license agreements usually revolve around issues such as the scope of the license, the duration, the product, and the disposition after the termination of the agreement. Some of the subtle definitions that often appear in agreements, such as "perpetual" and "irrevocable" licenses, can play an important role. In addition, for components that involve a long supply chain for software licensing, such as automotive chips, the business consequences and disposition of sublicensing and termination should be considered.
4. Typical cases of API-related disputes
In the development of SDV, the API is a very critical part of the software. Due to the attributes and functions of different vendors and different software interfaces, the issue of ownership and infringement has also attracted much attention. Because in order to achieve business goals such as software interaction or convergence, domestic substitution, and vendor compatibility, it is necessary to use APIs to achieve them.
Take the lawsuit between Google and Oracle, for example, which lasted nearly 10 years and was extremely controversial. Finally, the court found that the API was protected by copyright law, but that the use of the API by Google engineers was also fair use. It takes into account not only the difficulty of innovation of copyright holders, but also the needs of the overall development of the industry.
5. Typical cases of open source software disputes
Since most of the underlying SDVs are open source operating systems, it is expected that the compliance and disputes related to open source software will also be rectified. For example, there have been several cases of open source software disputes in mainland China, all of which are related to the GPL license. For example, "Yuzu (Beijing) Technology Co., Ltd., Yuzu (Beijing) Mobile Technology Co., Ltd. and Digital Paradise (Beijing) Network Technology Co., Ltd. Infringement of Computer Software Copyright Dispute" [(2018) Jing Min Zhong No. 471], "Jining Luobox Network Technology Co., Ltd. v. Guangzhou Youyou Network Technology Co., Ltd., Shenzhen Guanzhun Hang Technology Co., Ltd., Shenzhen Aostan Technology Co., Ltd., Xiangyun Industrial (Shenzhen) Co., Ltd. Computer Software Copyright Infringement Dispute Case" [ (2019) Yue 73 Zhi Min Chu No. 207], "No Random Buy E-commerce (Beijing) Co., Ltd. v. Beijing Shining Fashion Information Technology Co., Ltd. Infringement of Computer Software Copyright Dispute" [(2019) Zui Gao Fa Zhi Min Zhong No. 663], etc.
Based on the current cases, it can be determined that the rights holder of open source software can sue alone, and the court has recognized that the "contagion" of GPL licenses can be blocked under certain conditions, and that the compliance and copyright protection of open source software are two separate legal issues. The risk of intellectual property infringement and the compliance risk of open source software are both legal risks of using open source software.
6. Unfair competition disputes
In the field of smart cars, there have been a number of competition law disputes surrounding application software, such as unfair competition disputes and monopoly disputes between Tencent and PATEO. Similar to smartphone terminals, smart car hardware is also the carrier of a software ecosystem, and software manufacturers at different levels and in different fields will face fierce user competition and ecological competition, which will lead to various types of competition law disputes.
3. Future outlook and offensive and defensive suggestions
In the face of the new field of smart cars, we will see many exciting legal issues emerging, and in the process of disputes, objective and reasonable rules and boundaries will gradually be derived. In addition to the above areas of contention, we would like to remind you of the following:
First of all, pay attention to the brand and car quality responsibility. The traditional legal responsibility for vehicle quality problems is borne by the vehicle manufacturer, and the current compliance and legislation in the automotive field are guided in this way. However, in the case of intelligent driving, there is a large number of software with different functions, and it may become difficult to distinguish responsibilities. Some functions can be achieved by using OTA (over-the-air download technology) software to push in the cloud. Companies need to think about how to reveal their brand on their products, while at the same time being aware of their own liability.
Secondly, it is recommended to establish a scenario-centered comprehensive intellectual property protection system. Traditionally, patents, trade secrets, trademark rights, etc., which have been simply divided, once they enter a complex system, a certain subject matter is not necessarily protected by which type of intellectual property is adopted. Therefore, it is necessary to consider what types of IP protection can be adopted for a certain subject matter in a certain scenario. This requires our team of legal staff or lawyers to be familiar with and able to understand the business scenarios in the automotive sector. In this way, all legal documents will not be just on paper, but will have practical effects and effects.
Finally, any emerging business format will be accompanied by fierce competitive behavior, as well as the demarcation of competitive behavior. In cases where legislation is often lagging behind, competitors often seek answers through more direct and expeditious judicial avenues. For example, when the Internet, e-commerce platforms, online games, and smart terminals emerged, they were all accompanied by a large number of unfair competition lawsuits regarding the legality of competitive behaviors and the legality of business models. The smart car industry is no exception. For example, the lawsuit between Tencent and PATEO has already taken place. At present, there are not many special rules for the intelligence of automobiles. Therefore, for a considerable period of time, judicial litigation for unfair competition may still be a convenient way to define competition rules.