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Intellectual property risk in the mobility industry

Intellectual capital has become the most valuable asset of organisations within the mobility industry. Here are some critical IP issues that organisations should be mindful of.

The mobility industry is undergoing a rapid transformation – driven by technological advancements in autonomous driving systems, ride-sharing platforms, urban transport systems, smart infrastructure, and AI adoption. However, alongside this wave of innovation there are increasing risks surrounding intellectual property (IP). Innovators should recognise that IP has significant value and can be targeted by others – and so requires appropriate protection.

Intellectual capital has become the most valuable asset of organisations within the mobility industry. Consequently, safeguarding IP should be a key focus for businesses to protect key technologies and, thereby, their company’s growth, revenue, and business resilience. Critical IP issues that organisations should be mindful of include:

  • Patents: Patents are crucial for protecting inventions and granting exclusive rights to creators – over 18,000 autonomous driving patents were registered in 2019 alone. However, as breakthrough technologies are constantly emerging in the mobility industry, infringement is a significant risk.
  • Trade secrets: Trade secrets can provide a competitive advantage to mobility companies. However, protecting them is challenging – particularly during the movement of talent between businesses. Companies should adopt strategies that shield key information and data from competitors and establish processes to ensure they are not at risk of using other’s trade secrets.  
  • Copyright: Software and user interfaces play a crucial role in the user experience for the mobility industry. Companies should ensure that their software, designs, and other copyrighted material are registered – with the necessary licenses in place to also use third party copyrighted content.
  • Trade mark: Registration of a company’s trade mark is essential to secure branding and design rights protection. Allegations of infringement can lead to dilution of brand value for both parties in a dispute.  
  • Open source software (OSS): Within the mobility industry, extensive use of OSS enables both rapid development and cost efficiencies. However, companies must be cautious when incorporating OSS into their products, as it can carry certain licensing obligations. Failure to comply with OSS licenses can result in legal disputes and reputational damage.

As the value of companies’ IP grows, IP litigation simultaneously evolves, with a growing number of patent owners using litigation as a strategy for monetising their portfolio. The emergence of litigation funders has fuelled an increase in litigation at a time of rising legal costs and inflation in damages awards. Additionally, disputes related to standard essential patents (SEP) are expected to increase, as SEP owners seek to resolve licensing disputes with users of their standardised technology.

IP insurance is available to provide balance sheet protection for businesses facing allegations of infringement or misappropriation of IP. Policies will provide defence costs and damages cover as standard and may include several additional coverages, including reputation and brand protection, invalidation or opposition cover, reputation and maintenance fee loss, and withdrawal expenses. Additionally, some policies will offer the option of pursuit cover, which helps fund the pursuit of alleged infringement or misappropriation of a business’ IP by another party.

For further discussion on IP insurance and your company’s IP risk, contact your Marsh adviser.

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