Is American auto innovation in decline?

More and more, it’s looking like 2015 will be a year to follow automobile innovations, and self-driving cars promise to be only a part of what the immediate future holds. Global information firm Thompson Reuters has just released its 2015 State of Innovation in the Automotive Industry report and it notes a few industry trends, including a recent explosion in patent grants across the board as well as a massive shift towards development in propulsion systems. The study provides a view of innovation in the automotive industry that shows which companies are making the most headway in various sectors of vehicle technology.

Surprisingly, U.S. auto companies are not among the top patenting companies worldwide, according to Thompson Reuters. Which we were able to confirm with our own research.

Toyota Shows Strength, But Is America In Decline?

Research and development into automotive technologies has been incredibly robust in recent years and has been getting consistently stronger. From a total of less than 20,000 in 2009, there were more than 40,000 patents issued and published just five years later, in 2013. Thomson Reuter’s 2014 State of Innovation report indicated that, of 12 key technology areas, automotive tech had the third-highest level of patent activity by earning 13 percent of patents issued in all fields. This trailed only computing and peripherals (31 percent) and telecommunications (also 13 percent, but slightly greater than auto). The automotive sector also saw the greatest increase by percent of patenting volume of all sectors between 2012 and 2013.

Most of this rapid increase comes from a very strong field of Japanese companies. There are five companies from Japan among the top 10 recipients of automotive patents between 2009 and 2013: Toyota, Honda, Denso, Seiko Epson and Mitsubishi.

Toyota Text Cluster 09 to 13Toyota, which just made cost-free licensing available for thousands of its fuel cell technology patents, leads the pack with more than 7,000 auto patents earned in that time span, a total which beats out second-place Bosch by more than 1,000 patents. To dig a little deeper to see what types of patent activity Toyota is engaging in we turned to Innography, one of our sponsors, for some additional information. Using Innography’s robust search engine we were able to dissect Toyota’s patent holds. The graphic to the left (which will expand larger if you click on it) shows that between 2009 and 2013 Toyota’s portfolio was dominated by various technologies that fall under the major category of “control devices,” which include some relating to vehicle speed and electric power, for example. Toyota has also been adding patents that generally related to hybrid vehicles and electric motors in impressive quantities.

It was at least somewhat surprising to read in the Thompson Reuter’s study that of all the automotive innovation happening in recent years the vast majority of it occurred outside the United States. This struck us as odd given our proud tradition in automotive development dating back well over 100 years. According to the Thompson Reuter’s study, General Motors leads the way in America, and is the only U.S. company among the top 10 auto patent earners between 2009 and 2013 (7th overall), and Ford is the only other American firm in the top 20 (16th overall). Germany, on the other hand, was well represented among this top 10 list with Bosch (2nd), Daimler (6th) and Continental (10th).

Somewhat perplexed we again decided to turn to Innography’s search engine to see if we came up with the same data. Based on our own independent research conducted using the Innography patent analytics application, the state of American innovation in automobile manufacturing may not be as bleak as suggested by the Thompson Reuter’s study, but there is no doubt that there is a notable difference between U.S. patent holdings and international patent holdings for American automakers.

While American companies may not be earning the same level of worldwide intellectual property protections as other multinational auto companies, they do enjoy a much stronger IP position here in the United States. Over the same five year period surveyed by Thomson Reuters, according to data from Innography, Toyota barely outpaced General Motors for the top spot in automobile or vehicle patents granted in the United States, earning 3,090 U.S. patents to GM’s 2,954 U.S. patent grants. In the United States market, Ford jumps up to the 4th-most active patent recipient with 2,239 patents over five years.

 

Innography-USauto-grants-2009-2013

US patent grants from 2009 to 2013 in the general area of automobiles or vehicles.

 

When international patent activity is viewed using an Innography search, Toyota has a commanding lead over General Motors, with over double the patent activity and over quadruple the patent activity of Ford.

 

Innography-worldwide-auto-2009-2013

Worldwide patent activity in the area of automobiles or vehicles from 2009 to 2013.

 

There may be even more reasons to get excited about the state of American auto innovation in the coming years, according to feedback we received from Thomson Reuters patent analyst Bob Stembridge. “American auto innovation is on the rise,” Stembridge said. Both General Motors and Ford posted gains in their patent volume per year between 2009 and 2013; extra material provided by Thomson Reuters showed that Ford’s patent activities increased almost four-fold by 2013 to nearly 400 patents earned that year.

Hyundai Text Cluster 09 to 13As impressive as Ford’s recent gains are, no company has progressed quite like South Korea-based Hyundai in terms of global patents earned over the past few years. According to the Thomson Reuters report, this company, 3rd overall on the top 10 list, has increased its rate of filing patents faster than any other auto company since 2011. It’s only risen from 4th overall to 3rd place in that time frame but it’s now much closer to being part of the conversation with industry leaders Toyota and Bosch, both of which lead the rest of the pack by hundreds of patents per year. The five-year patent totals for Hyundai include a much more robust portfolio for vehicle handling technologies than any other company on this list, although Hyundai’s handling patents have dropped from its high point in 2009 and recent patent activity by this company has focused more on propulsion. Our Innography visualization for Hyundai patents (shown right, click to enlarge) shows a similar profile to the Toyota visualization above, although we’re seeing significant sub-sections for fuel cells and exhaust gas as well.

The Author

Gene Quinn & Steve Brachmann

Gene Quinn & Steve Brachmann   

Gene Quinn is a patent attorney and the founder of IPWatchdog.com. He is also a principal lecturer in the PLI Patent Bar Review Course, which helps aspiring patent attorneys and patent agents prepare themselves to pass the patent bar exam. is admitted to practice law in New Hampshire, is a Registered Patent Attorney licensed to practice before the United States Patent Office and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. You can contact Gene via e-mail.

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than seven years. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series.

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