Killing Automotive Innovation One Supplier at a Time

Peter Zura at the Two-Seventy-One Patent Blog has found a story by Christoph Hammerschmidt of EETimes Germany concerning suppliers who are required to surrender their IP rights in order to win contracts from auto makers. Wolfgang Runge, CEO of Bosch joint venture ZF Lenksysteme, and program committee chairman of the VDI Congress on Electronic Systems for Vehicles told the conference that "these are far from being isolated cases. This is happening at the domestic and international level.”

Such arrangements entitle OEMs not only to use the fruits of their suppliers’ R&D efforts for their own benefit, but also to divulge them to third parties. “We found that a competitor was using IP we’d developed,” complained one automotive electronics development manager who requested anonymity. “When we brought this situation to the attention of the relevant OEM, and asked them to at least pay a licensing fee, they told us that we were welcome to lodge this request but that in such a case they could not guarantee that we would receive orders from them in the future.”

Contacted this week to respond to Runge's allegations, the German auto industry group VDA (Verband der Automobilindustrie) a spokesman said, "We see no reason to comment." The group represents more than 500 companies, including most German auto manufacturers.