Speculation about Ford Motor Company and Google potentially joining forces in the development of a new autonomous vehicle has ramped up in recent weeks. A report in Automotive News speculated that the two may announce a deal as soon as this week at the Consumer Electronics Show (CES) in Las Vegas. Quite a way to kick off the new year!

While neither company has confirmed an upcoming announcement or even that they’re working together, the possibility of such a partnership is intriguing – and worth watching. It also raises myriad questions.

First off, is it in Ford’s or Google’s best interests to form a partnership of any kind that might preclude them from doing business with other manufacturers/technology providers? How should a deal be structured so that both companies can work together without eliminating the possibility of working with others down the road? And if they do sign an agreement of any kind, who will own and control the intellectual property? That will be a huge hurdle that needs to be resolved up front for both companies. Intellectual property is the name of the game.

If the collaboration does happen it could take a number of forms. Consider:

  • Joint Venture (or joint development agreement): In a joint venture or joint development agreement, intellectual property ownership and associated exclusivity will control many factors, and may be undesirable to Google as limiting future partnerships.
  • Licensing agreement: In a licensing agreement, the license may be a cross-license or a one-sided arrangement, and may allow both companies the freedom to work with other partners as exclusivity allows.
  • Supply agreement: In a supply agreement, Ford may merely supply sub-assembled vehicles to Google for its customization, including the addition of autonomous components. A supply agreement is less of a “partnership,” but may be desired by Google.

In any case, control of the intellectual property will be the key to the collaboration.

Several questions remain to be answered. Would Ford or any OEM outsource its vehicle operating system to any third party given the legal liability associated with a failure? Will the vehicles continue to be Ford branded with “automation by Google?” Is it in the best interest of the automotive industry to allow Google to take a dominant position as a provider of autonomous vehicle software as it has with the internet?

Experts say that the changes coming to the auto industry in the next decade or so, from autonomous vehicles to alternative powered green vehicles, will be the biggest revolution since the invention of the automobile more than a century ago. Ford has even talked about the end of personal car ownership and is even diving into a “shared” vehicle test programs to make sure the company understands all the bases that need to be covered.

The coming new disruptive technologies will definitely disrupt. The array of changes is dazzling and will make the next several years exciting but potentially perilous for automakers and their suppliers. WNJ’s IP and Automotive Practice Groups work together with a laser-focus on the industry and on helping clients understand the long and short term implications disruptive technologies bring, because nobody in the business will be unaffected . . . and the only way to win is to stay ahead of the curve.

By Gregory D. DeGrazia of Warner Norcross & Judd