A decade ago when Toyota introduced its first hybrid Prius, buyers were not too accepting of the funky looking vehicle. It slowly won over the hearts of environmentally conscious buyers, but took years to gain widespread acceptance. Toyota was alright with that, they saw a bright future ahead for the Prius and were willing to wait it out. In the meantime, they filed patents for everything on the Prius.
As one of the first into the hybrid segment, Toyota knew that their vehicle was groundbreaking and also had the insight to understand that at some point other companies would try to copy their design. However, with patents on file, copying would be illegal. Who would ever think of copying the funky, car years ago with gas prices well below $1.50. Toyota virtually stood alone.
Flash forward to today, and the industry is ripe with hybrid models. Many of which try to match the Prius in fuel efficiency and advanced technology. However, patents hold competitors at bay. They are not allowed to use many of the technological advances that are seen in the Prius without licensing it from Toyota. Licensing technology costs money, and pride.
Companies such as GM have tried to find a way around the patents filed on the Prius and have instead developed their own hybrid system. This system, previously in use in the Malibu hybrid is less efficient and ultimately led to GM cutting the model. Nissan has shifted from a focus on hybrids to EVs to avoid legal issues with Toyota. Others may follow the same path.
Honda, who holds many patents with their Insight hybrid, still lacks the fuel efficiency returned by the Prius and will likely have to discuss future hybrid models with Toyota patent lawyers to see if any conflict in technology occurs.
Ford has agreed to cross license its patents with Toyota to avoid legal issues down the road. Though Ford has developed their own hybrid system, the choice to cross-license the technology avoids any potential lawsuits between the two companies.
Toyota has proven that by appling and receiving patents for their hybrid Prius has made it difficult for other automakers to compete in the hybrid segment. They currently hold over 2,000 patents on the Prius models alone. As each automaker attempts to design their own hybrid models, they must cautiously sift through all of Toyota's patents before making any engineering choices. This process is both tedious and time consuming, but also puts Toyota on top as competitors must find another way to make a great hybrid vehicle.
Source: Wall Street Journal