In September 2018 I had the opportunity to go on the record with Roberta Romano-Götsch, the chief operating officer of Mobility and Mechatronics at the European Patent Office (EPO). During that interview Ms.Romano-Götsch mentioned that the EPO would be soon releasing a study on self driving vehicles. I expressed interest in speaking with her again once that study was published, and she agreed. Our conversation discussing this EPO study follows.
In this wide-ranging conversation that follows we discuss how traditional auto companies and big tech companies are both competing in the self driving space, and how the EPO is seeing an increase in applications from SMEs as well. We also discuss how the political climate in Europe surrounding a push for greater fuel efficiency and environmental concerns are a driving force behind autonomous driving initiatives across Europe.
Without further ado, here is my latest conversation with Roberta Romano-Götsch.
QUINN: Thank you very much, Roberta, for taking the time to chat with me again. I know that the EPO has just recently come out with a study on self-driving vehicles. This is something we’ve talked briefly on previously and said we’d follow up on it. So here we are. I looked at the report, which is interesting in a lot of ways. Would you give us a little bit of background information on the study and you start by telling us what the study was about, what the study intended to do and what was the aim of the study.
ROMANO-GÖTSCH: Sure. I’m really happy to pick up the conversation where we left off last time. So as I mentioned, we are seeing a totally new landscape in the automotive sector with new players and IT companies moving in to the field with their own way of doing business, and their own patent strategies that are quite different from the classic or traditional car makers. We have taken another step and looked at patent filings at the EPO in the last ten years. As patent applications are filed before a product is on the market, this is a really good way to identify trends, innovations and products that are about to be launched.
What we have seen is that in the past ten years there has been rapid development and strong patent-filing activity in the area of self-driving vehicles (SDVs). In particular, we have seen an increase of 330% in patent applications published in this field in the last six years, compared to 16% across all technologies at the EPO in the same period, so it’s quite impressive.
If you take a look at the 25 top applicants in the field you’ll surprisingly find that half of them are traditional car makers, while the other half is actually ICT automotive and telecommunications companies. We also found that Europe and the U.S. are leading the way in self-driving vehicle innovation. We very much expected the U.S. to be driving all the smart environments that enable SDVs to interact with each other and with their surroundings, but surprisingly enough, both Europe and the US are dominant. European applicants stand out in the areas of Vehicle handling, Smart logistics and Perception, analysis & decision. US applicants lead in Communication and Computing.
QUINN: And if you look at the top 25, you’ll see that Samsung is at the top, followed by Intel and then Qualcomm, and those are not car companies.
ROMANO-GÖTSCH: Absolutely. That really indicates the correlation with the domestic R&D and investment in ICT for automotive.
QUINN: Yes. And I didn’t realize this until I read your report, but you cite the Brookings Institution as saying that there has been $80 billion already spent in R&D in this area and that’s just almost unbelievable.
ROMANO-GÖTSCH: That is correct.
QUINN: From 2011 to 2017 the number of self-driving vehicle patents at the EPO has quadrupled.
ROMANO-GÖTSCH: That’s right. In 2017 alone we received nearly 4 000 new applications at the EPO, and some 18 000 over the past ten years. We are definitely looking at a very fast moving technology. It is also accompanied by different behaviour in patent strategies: The number of countries covered by a patent application is definitely larger than in applications filed by traditional car companies. We see that applicants in self-driving car technologies aim for broad protection with significantly larger patent families. Protection is also more frequently sought with regional (EPO) or international patent offices (Patent Cooperation Treaty route), and spans a larger number of jurisdictions on average, which suggests that broad international protection is even more important in the automated vehicle market.
QUINN: Yes. The patent family size is larger by 50% it looks like.
QUINN: And that’s statistically relevant. I have some questions about whether and how fast this technology is going to come online. There still is time, I suppose, if you act quickly because while we’re talking about the numbers of application going up dramatically we’re still not talking about tens of thousands of applications yet, although it’s trending towards that direction very quickly.
ROMANO-GÖTSCH: There are multiple linked aspects. In emerging technologies in general – and SDVs are no exception to this – you tend to find three interlinked factors: One is technical innovation, and you see that represented in the patent filing trends. Another is the role of investment by industry. But a very big impact is also made by policymakers. You need to have policies in place to put cars on the road. This includes insurance, safety tests, and cyber security. That’s why governments play a key role.
QUINN: Yes, and I see that one of the challenges here is obviously the security and the validation and verification of these things. Is there something like a direction that you can identify for us today and say that you think this is where people should be looking or maybe an area that you don’t think the public has focused on yet that we should be focusing on?
ROMANO-GÖTSCH: Generally speaking, many emerging technologies today are driven or influenced by a number of new legislations, like the Paris Agreement of 2015. This includes self-driving vehicles because through autonomous driving, stop-and-go and a regulated traffic flow, you end up releasing less CO2, which is one of the main objectives of the Paris Agreement. This is one aspect. But there are many other technologies ranging from satellite development to new GPS systems that focus on the broader scope of climate change. As a consequence, renewable energy technology is another fast-growing sector. All the emerging technologies we see in terms of patent filings reflect the general aim for a cleaner, safer, smarter and more sustainable world.
QUINN: That’s interesting. I wouldn’t necessarily have thought about self-driving as an environment piece of the puzzle. But I suppose most of these self-driving vehicles are going to wind up being electric, right
ROMANO-GÖTSCH: Yes, this is part of the electric vehicle picture. But again the big question mark here is infrastructure, and this is where policy really plays an important part.
QUINN: So, this is sort of a chicken and the egg kind of question, right? I mean what comes first in your mind? And I suppose maybe it’s an impossible kind of question because, I think, sometimes policymakers will make unrealistic demands and say “we must have this innovation by year X.” And that’s not always how innovation works. But if you set a goal and you move people in responsible ways then innovation can and does respond and I think that’s what you’re seeing. That is people trying to respond in a large way to what you’re talking about with the Paris Agreement, correct?
ROMANO-GÖTSCH:. We see, for example, that the EU is extremely active with many projects and incentives to encourage other countries to reduce their fuel consumption too. Electric vehicles are definitely a big part of that. Batteries are the limiting elements for now and, as I mentioned, so is the infrastructure. But if you visualize the future when you go to a filling station where you may have five or six different providers, you’re likely to have an electric charger and two or three different types of renewable energies.
QUINN: Right. Sure, go ahead.
ROMANO-GÖTSCH: In Europe the problem of climate change is seen to be linked with fuel, the fuel exhaust gases and the tiny particles in these gases. As a consequence, some roads in some cities in Germany are closed due to traffic and excessive exhaust emissions. This problem is seen as a major driver towards sustainable technologies and probably also to more automated types of vehicles.
QUINN: That’s interesting. And then obviously the automated part comes in because if it’s automated such as when you’re on cruise control you save more gas because the machine is doing what’s optimal for the engine.
ROMANO-GÖTSCH: That’s exactly right. An even more enviromentally sustainable scenario is, of course, when you combine carbon fuel with electric engines and autonomous drive . In fact the advantage of self driving vehicles goes beyond saving fuel. You can also park cars right next to each other as you don’t need to leave space for the driver to get out. Just imagine all the space that you will save that way. It’s all really interconnected.
QUINN: This is very interesting. When I started thinking about how this interview was going to go, I did not see it going in this direction. This is fascinating stuff. You brought up battery technology and that’s an area that I am extremely interested in. I realize you said that’s a limiting factor and that is, I think, biggest limiting factor to get from where we are right now to where we want to be with a cleaner, greener society. I wonder whether you have any information or thoughts about when or if we’re going to get to that battery world where we can have that clean green energy that we want.
ROMANO-GÖTSCH: We are currently looking into this, because power is indeed the other major technology that is key to the automotive sector. Early indications show a steep increase but some questions remain: Will innovation stagnate because legislation is missing? This is still a very open point. What we can say is that we need to start looking into much broader dimensions. When we talk about patent trends, in order to understand and interpret our data, we have to closely monitor what is happening in terms of legislation – the current policy – and look ahead to what that policy might be like in 2020. Here in Europe we have to be fit: All those who signed the Paris Agreement need to be at a certain level of environmental technology by 2020. Incentives need to be put in place, and this is what spurs innovation. With major innovations that are daring for big companies, the tendency is to have the bold research and innovation conducted by smaller enterprises or start-ups before they start investing at a larger scale. And that is the real change of paradigm compared to classical R&D: Big companies often prefer to have a start-up pushing the innovation, then see if their policy works out, and only then invest or buy the small company. That’s totally new.
QUINN: Yeah, and that’s not a very European model, is it?
ROMANO-GÖTSCH: No, it’s completely new. We are really starting to see the whole globe as an innovation space that is interconnected. GPS technology is one example, as are renewable energies, and we clearly notice a paradigm shift.
ROMANO-GÖTSCH: About a year ago we published a study on the fourth industrial revolution technologies. We found that in some of the basic technologies – enabling technologies – there are a lot of SMEs suddenly coming up and working in these fields. In these technologies you don’t need much in terms of hardware. The companies can work with digital equipment in a digital environment, which partly explains the marked push toward ICT applications. But that has also triggered a very interesting reflection on the value of patents. Europeans appear to have learned a lot from Silicon Valley.
QUINN: You know, it’s funny that you say that because I was just thinking as you were talking that Silicon Valley could learn a lot from what you’re talking about. I don’t know whether you guys are going to want to address this but it strikes me that what you’re describing is a model that used to exist in the U.S. and in the wake of the 101 chaos and whether you agree with what’s going on or not it’s uncertain in America. And I think it has really caused a lot of these types of companies to not be able to get any kind of meaningful protection, or feel like they can’t get it so they don’t want to try. So what I wonder if Europe is starting to see these SMEs gravitating to Europe where you actually can get protection on these kinds of really innovative things they’re working on.
ROMANO-GÖTSCH: What is certainly worth mentioning here is that the legal framework work of EPO is stable, solid and predictable in this field. You know about our consistent approach to examining computer-implemented inventions, and as I was able to point out at our last interview, each technology sector at the EPO is now really top in these types of inventions that are being implemented across all technical fields, ranging from automotive to biotechnologies and chemistry. The situation in our patenting practice and our framework – the legal framework – is predictable: Inventors come to us knowing exactly what to expect.
On top of that, the EPO is very active in going out and explaining its approach to customers because these are new technologies. We actively work with universities in different cities across Europe and say what we do, and how the patent system in Europe functions. And we do indeed see quite a lot of patent applications coming from SMEs.
QUINN: That’s great because these types of companies that are built from the ground up on really revolutionary kinds of technologies need protection. And it’s not for everybody, I mean if all you’re doing is coding up something that has already heretofore existed and you’re creating an app for an app store then yes, protection’s probably not for you. But some of what we’re talking about here is really revolutionary. And once you create it if it’s not protected then anybody can just use it and take it. And when you look at the number of companies involved here just going back to the two 25 list all of these companies have vast resources, you know? And so if an SME does not have meaningful protection they’re just not going to be able to compete.
ROMANO-GÖTSCH: You’re absolutely right. For SMEs, patents actually often are their only assets, and essential for receiving funding. Patents are definitely a way forward for them.
QUINN: Yes. Now I don’t want to take up too much of your time and I know you’re very busy but there’s one thing I do want to talk to you about because it caught my eye specifically. The chart that you have on page 41 of the report takes up the whole page and it lists the companies and the industry that they’re in and the types of applications generally speaking that they’re working on. And much of what you see is what you might expect, you know, like typically the computer companies have a larger share percentage of communications related patents and the car companies have a larger percentage of the vehicle handling type patents in the self-driving space. For example Volvo has almost 4% of the patents in the self-driving space and Samsung has 6% and Intel almost 8% in the communications space. But then you get to the share and smart logistics and it’s everybody has one or two percent. That seems to me to be where everybody is trying to fight for the future. And also Perception which to some extent borders with Logistics. I look at this as sort of like the interface and the controls, right? That’s what we’re talking about here, right?
ROMANO-GÖTSCH: Yes, absolutely. Both Perception and Logistics are the forefront of SDV development. “Perception and Analysis and Decision” captures the very technologies that make vehicles autonomous: all the sensors that enable cars to collect information from their surroundings, and the advanced software and AI technologies that enable cars to process and analyse this information and make autonomous decisions. Smart logistics is everything that concerns, for example, automated parking, the interface between vehicles, electricity grid, and even traffic management, in short to all the new possible ways of creating value thanks to SDV. These are the type of inventions through which the functions and services performed by tomorrow’s cars are being reinvented.
QUINN: And it’s my understanding that that’s going to be where there’s this big race between all these companies that are trying to innovate all in the same area. And your information kind of suggest that that’s true and I don’t know whether you have any insight into this particular table or anything you want to say but I thought this was very insightful information.
ROMANO-GÖTSCH: We have seen that the established automotive companies have not been idle either when compared with ICT companies. They have been developing the classical parts of the vehicle platforms as well as strong or even leading positions in Smart logisticsand “Perception and Analysis and Decision” in the study.
QUINN: Yeah. So, is it correct that car companies are trying to catch up?
ROMANO-GÖTSCH: I would actually say that they are still well positioned in the race.
QUINN: Maybe that’s just the future, that these tech companies play in a fast-moving pace where on some level, in some circles they say patents don’t matter but then if they introduce themselves or insert themselves into an area where there’s been this mature marketplace, i.e. banking or automotive then all of a sudden, patents really do matter.
ROMANO-GÖTSCH: Definitely. We survey early trends and we expect to see blockchain come more into play. For example, our consortia of automotive manufacturers in blockchain: Mobi is one, BiTA is another. These are the big traditional car makers pulling together in order to establish standards for blockchain. We are starting to see the same developments in other areas of innovation and will inevitably discover parallels to the automotive sector. We expect to see a growth there too, with the consortia forming new collaborations that were unthinkable before. It’s really a different world from a few years ago, and the traditional car industry is definitely adopting a new business model.
QUINN: Yes. It’s really interesting to watch this. I don’t know whether you’re a science fiction fan, or a Star Trek fan, but it’s almost like something out of science fiction when these tech companies get involved. It’s like they’re the Borg, you know?
ROMANO-GÖTSCH: Yes. [Laughter]
QUINN: Resistance is futile, you know? Because so far we’ve seen in it these big two spaces – you had very mature markets – with the banks who’s going to be able to take on the banks, they’ve got all the money. And then all of a sudden you look, and the tech companies are sitting on hundreds of billions of dollars in cash and well, they can take on the banks. And then who’s going to take on the automotive industry, you know I mean they’re making cars nobody wants to make cars. And then all of a sudden cars become a rolling computer and it’s like oh, well, wow, who saw that coming? I think there’s an irony in this. I don’t know whether you guys think it too because we’ve been told don’t text while you’re driving and now your cars are a mobile hotspot.
ROMANO-GÖTSCH: Yes absolutely.
QUINN: I wonder to myself what mature marketplace is going to be next for the tech sector to invade.
ROMANO-GÖTSCH: Based on what we see in patent applications at the EPO, I have the feeling that the fourth industrial revolution has already started in nearly all large sectors, health, banking, manufacturing, agriculture, transportation, you name it. There is no doubt that they will deeply transform, the only questions are how fast, and what will they look like in the end!
QUINN: I guess that’s what innovation is about you don’t always know where it’s going to go or where it’s going to come up.
ROMANO-GÖTSCH: I think you are betting from an advantaged position because we counted some 2 000 patent applications at a very early phase. I must say that our PATSTAT database with its 100 million document entries is extremely helpful. Early on you can see what innovation is coming out next, and that’s really amazing. Especially for scientists, and we’re all scientists over here.
QUINN: Yes, I think people who aren’t paying attention to the patent databases and searching and treating them like they really are scientific resources are just missing out. I know not all patent applications are created equal but there is an awful lot of really good technical information in the patent databases.
ROMANO-GÖTSCH: They are getting better all the time. We recently launched a new beta version of our free public patent database – Espacenet – that is now much more user-friendly. It’s a real step forward. Anyone can use it to dig out patent information, and the fact that you have it in 32 languages helps. It’s a great source of information and all our patent landscaping studies have been made possible by such tools. Supported of course with the great value added by our scientists and engineers who are also experts in patent classification. Our new study is mainly based on retrieving the classification in the automotive sector and in software for vehicles. Without this detailed expert knowledge, such a piece would not have been possible. So it’s really the combination of expertise and quality tools.
QUINN: I really appreciate you taking time to talk to me today. Is there anything that you had wanted to say that I didn’t’ ask you?
QUINN: Well, great. Thank you I really appreciate you taking the time to chat with me today.
ROMANO-GÖTSCH: Well, it’s great to have this opportunity to speak with you, Gene. Many thanks for that.
QUINN: Well, thank you. Thank you very much.