Until the launch of Honda’s (s HMC) low-cost hybrid Insight earlier this year, Toyota (s TM) was pretty much the unchallenged king of the hybrid market. It took an early lead with the launch of its Prius, and has hung onto it, acquiring patents along the way — or, as The Wall Street Journal put it today, building a “thicket” of patents around hybrid technology in order to block competition.
Over the last decade, Toyota has been racking up patents for hybrid systems and components — starting with more than 300 patents for the first-generation Prius, about 370 for gen-2, and upwards of 2,000 for the latest model, Toyota North America VP Bob Carter told reporters in January at the Detroit Auto Show. Rival automakers including Ford, Honda and General Motors, however, think they can find workarounds with their own innovation. They might be foolish not to — Global Insight forecasts that hybrids could snag some 5 to 11 percent of the U.S. market by 2015, up from 2.2 percent in 2007.
According to Australia-based IP law firm Griffith Hack, filings for patents covering hybrid technology have been “increasing roughly exponentially” across much of the industry in the last few years. The Clean Energy Patent Growth Index from intellectual property law firm Heslin Rothenberg Farley & Mesiti suggests slower climb, but it’s clear that Toyota is not the only automaker racing to develop hybrid IP. In fact, when it comes to acquiring hybrid and electric vehicle patents in the U.S., Heslin Rothenberg’s index shows that Honda and Ford beat out Toyota between 2002 and 2008.
U.S. patents aren’t the only measure of hybrid IP, of course, and for now, Toyota still has an edge. Nissan is licensing some of the technology for its Altima Hybrid, and Ford — which has patented its own hybrid system — tells the Journal it has cross-licensed patents “to prevent legal issues.” But long term, Toyota’s patents can only go so far. Some of them may be successfully challenged in court, according to Automotive News, since the company has rapidly built up a high quantity of patents, but a significant portion of them are of relatively low quality.
Beyond that, hybrid vehicles are an interim solution. Much of the industry, and the policies that influence it, are moving toward plug-in hybrids and all-electric vehicles. As a result, companies that build up that IP early and carefully could end up reaping the rewards of licensing revenue or cross-licensing opportunities — a key to capitalizing on an increasingly global push for clean technology — that Toyota is seeing now with hybrids.