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A Better Partnership


Jan 2015
January 14, 2015

Collaborating on Engineering is Key, but Presents IP Ownership Issues

Inadequate engineering resources could hamper the development of new technologies that automakers and automotive suppliers will need to compete in the 21st century. General Motors’ recent requisitions to hire 500 design release engineers to relieve the stresses their engineers are experiencing underscores the magnitude of this issue.

Companies can use a number of strategies to develop new technologies in view of the engineering shortage, including: collaboration  with engineering schools, developing training programs and revisiting vertical integration—a business model the OEMs and suppliers largely abandoned over the last two decades. At a recent OESA conference, the consensus was that improved collaboration and joint development along both spectrums of the supply chain are the only viable options in the short term.

However, those collaborations create another challenge: the need to change intellectual property strategy in view of new laws. In 2013, the U.S. became a “first to file country,” meaning the first person to file a patent application will establish rights on the technology. As a result, it is now more important than ever that suppliers establish background technology early and often by making use of the provisional patent application process through the U.S. Patent and Trademark Office.

For the past 200 years, the U.S. operated under a first to invent system: the first to invent a technology had rights in the technology, regardless of who filed an application first. Often, collaborators in the development of new technology fail to contemplate ownership of the technology until after it has been developed. Even worse, OEMs demand ownership of new technology, even if its development was financed by the supplier.

Clarity in ownership of technology can only be achieved through protecting the underlying concepts—by filing patent applications covering new technologies prior to beginning the collaborative development process. The USPTO accepts provisional patent applications, which is a low-cost strategy to quickly protect developmental concepts. Once the underlying concepts are protected, a joint development agreement should be negotiated establishing rights in the new technology. Negotiations can be conducted from a position of strength once the background technology has been established by filing provisional patent applications.

Collaborative development projects are presently the best available option to meet the technology demands of the marketplace with limited engineering resources. Establishing a strategy to protect background technology prior to entering a joint development or collaborative effort is imperative to avoid losing technology that can give a business a competitive edge in a high-tech market.

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