Can Automakers Use the Same Defenses to Software-Related Patent Infringement Suits?

05 January 2022 Blog
Author(s): Chethan K. Srinivasa
Published To: Dashboard Insights Manufacturing Industry Advisor

Automakers continue to face similar challenges that software and electronics companies are familiar with, such as being targeted by non-producing entities (NPEs) as discussed in a previous post. While software and electronics companies can defend against such suits by attempting to invalidate software patents due to patent eligibility, automakers may find less success with this type of defense.

As vehicles are becoming more computerized, the number of moving parts is significantly decreasing. A gas powered vehicle has hundreds of moving parts, whereas an electric vehicle has one: the shaft in the electric motor. Because of this change in technology, it is increasingly less likely that mechanical patents will be asserted against automakers, whereas the opportunity for the assertion of software patents is increasing. For example, the automotive sector has seen a marked increase in patent infringement suits brought by NPEs asserting electronic/software based patents.

Since software and electronics companies have historically been the largest targets for patent infringement law suits, including those brought by NPEs, they have significant experience in defending against them. For example, the Supreme Court of the United States has long held that abstract ideas, laws of nature, and natural phenomena are judicially recognized exceptions to patent eligible subject matter. So, if a patent claim is directed to a judicial exception, then it is to include additional limitations so that “the basic tools of scientific and technological work" are not monopolized. This may be satisfied if the claim integrates the judicial exception into a practical application. For example, the claim can apply, rely on, or use the judicial exception in a manner that imposes a meaningful limit on the purported judicial exception.

In 2014, the Supreme Court held that a certain computer-implemented system was an abstract idea and “merely requiring generic computer implementation fail[ed]” to integrate the judicial exception into a practical application. This decision influenced the defense strategy of entities sued for software-related patent infringement and led to the invalidation of numerous software-related patents. There has been some guidance regarding how additional elements in a claim might integrate a judicial exception into a practical application. For example, if an additional element reflects an improvement in the functioning of a computer, then the judicial exception might be integrated. However, the invalidity defense based on subject matter eligibility has remained prevalent for software and electronic companies because most computer-implemented methods achieve some purpose other than improving the functioning of a computer.

As vehicles were traditionally full of mechanical widgets and internal combustion engines, this subject matter eligibility-based defense was not relevant, notwithstanding a rare case where a mechanical patent was invalidated because the drive shaft as claimed was deemed to be an abstract idea. Historically, therefore, the common patent infringement defenses used by automakers relied on non-infringement, invalidity based on prior art, and/or failure to meet statutory requirements (such as the written description requirement). But now that automakers are producing vehicles that are increasingly or mostly computerized and electric, and are faced with software patent infringement suits, they may be tempted to adopt patent eligibility-based defenses similar to the ones used by software companies.

Software patents in the vehicular space, as compared to the more abstract software space, can be strategically drafted to better withstand patent eligibility attacks. For example, if a claim is drafted to recite a clear practical application that makes the vehicle perform better, such as a software method that assists the vehicle in reducing energy consumption from point A to B, then invalidating such a patent on the grounds of patent eligibility may be more challenging.

Although in the short-term, automakers may be successful in invalidating software patents that are less strategically draft, they should take note that in the longer term, this subject matter eligibility-based invalidity defense may be less viable since vehicular software-based patents may be more likely to integrate any abstract ideas or judicial exceptions into a practice application.

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