At the 2015 Consumer Electronics Show (CES), Toyota announced it would grant access to 5,680 fuel cell vehicle (FCV) technology patents. This idea of offering a royalty free patent license to competitors is novel, however it is not the first time we’re seeing an auto manufacturer open source its patent portfolio to drive mass adoption of an alternative vehicle technology. Tesla released its patents to the public in June 2014, however, Toyota seems to have disclosed more details around its open source program. According to Toyota’s press release, Toyota’s fuel cell patents will be available to companies manufacturing and selling fuel cell vehicles on a royalty-free basis through the initial market introduction period, anticipated to continue through 2020.
By sharing its FCV patent portfolio, equivalent to 20 years of research and development, Toyota hopes to spur innovation and development of a hydrogen-based automobile economy. Hydrogen fueling infrastructure is a necessary component for FCVs. With slow FCV adoption and high infrastructure costs, FCVs face many challenges ahead, hurdles similar to those that electric vehicles (EV) are dealing with. When EVs initially launched, manufacturers first created demand, then slowly rolled out charging stations. With most, if not all of the major automobile manufacturers currently offering or soon to be offering EV models, adoption of electric vehicles has been increasing. There are now more charging stations than ever before, yet it appears that EVs have a long way to go before electric charging infrastructure is comparable to that of traditional gas stations.
Similar to Tesla, Toyota is opening up its patents to the competition in order to promote mass adoption for FCV technology, which certainly generated positive feedback from a PR standpoint. If electric vehicle adoption is a guide, it will likely be a few years before there is significant demand to justify the cost of building expensive hydrogen fueling infrastructure.
According to IP Checkups’ proprietary databases, there are more than 31,000 worldwide* fuel cell-related patent documents within the past five years. In that same period, General Motors has led the fuel cell category in published patent applications (EPA & USA) over Toyota, with Honda following closely behind.
For Toyota its FCV patent offering, it is too early to tell whether or not it will actually kick-start additional FCV innovation, which would ultimately benefit Toyota. Without a competitive market and robust product sales, these technologies would be doomed. Considering the time and costs associated with establishing a hydrogen distribution infrastructure as well as the lack of serious competition from other auto manufacturers, opening up its patents appears to be a relatively low risk move. It could be a long time before Toyota realizes a return on its investment and in the meantime it lowers the barrier to entry for competitors. However skeptical one may be about this new seemingly expensive technology, Toyota does have a track record of bringing change to a traditional market and attracting early adopters. In any case, IP Checkups will be tracking activity of fuel cell vehicle innovation. Stay tuned!
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*Worldwide = U.S. published applications, granted US patents, European (EP) published applications, European (EP) granted patents, World Intellectual Property Organization (WO) published applications