Industry Strives to Strike Balance Between Shared and Intellectual Property
By William Diem WardsAuto.com, Aug 14, 2008 5:28 PM

TRAVERSE CITY, MI – While executives at this week’s Management Briefing Seminars continue to stress the growing importance of cooperation and collaboration in the auto industry, one of the thorniest problems with shared research has been the question of intellectual property.

“Doors are more open to working outside of the traditional channels we are used to,” says David Cole, chairman of the Center for Automotive Research and founder and chairman of the MBS.

Tom LaSorda, chairman and president at Chrysler LLC, says the company rapidly has been forming partnerships with rival auto makers such as Nissan Motor Co. Ltd. and Volkswagen AG that are critical to Chrysler’s success.

The key to a happy IP partnership is to “define what means success for each partner,” at the beginning of the project, he says.

Different partnerships have different approaches on how they handle IP, but executives say simplicity is vital.

“Too many rules stifle creativity,” says Steve Zaroukian, business development manager at Intermap, a startup company that is mapping the profile of the Earth and collaborating with an American university and a Tier 1 supplier in an effort to develop a global positioning system-based program for heavy trucks.

“Each of (the partners) brings something to the table,” he says. “We want to develop a win-win structure, and we want to supply content to the program.”

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The University of Windsor and Chrysler have had a $25 million per year joint venture in Canada since 1996 in which they develop technology together.

“Our approach is really simple,” says Peter Frise, CEO of Canada’s Auto21, which oversees university-industry research. “When we start, Chrysler says what their portfolio is. Anything we develop that falls within that portfolio is Chrysler’s. Outside of that portfolio, the IP is for the University of Windsor.”

Finding the win-win balance is a recurring theme among participants in joint research, and “win” has some surprising definitions.

At the American Iron and Steel Institute, “our developments are normally available to the industry for general use,” says Vice President Ron Krupitzer. “We don’t retain the IP. We give it to everyone in the industry, not just our members.”

The government also takes a wide view. For instance, the defense industry makes sure any IP involved in research projects, such as a new airplane, is disseminated to competitors who are involved in the project.

Ricardo Inc. President Dean Harlow says in many of the supplier’s joint developments, the partner pays for access to Ricardo’s IP, but occasionally Ricardo offers it free of charge when it sees a benefit to doing so.

Many organizations establish IP rules early on in any talks regarding joint research. Both the University of Michigan and General Motors Corp. reportedly ask for 100% of the IP developed in any projects.