The inside track on a self-driving pioneer

In a little over a decade, Waymo has gone from a long-shot Google project to a recognised business with the very real prospect of leading a mobility revolution on the world’s roads. Today, the company’s white Chrysler minivans, emblazoned with the Waymo logo, are a regular sight around its Mountain View, California headquarters, while in Arizona a fledgling taxi service called Waymo One is taking shape.

The ambition, the disruption and the world-leading technology are exactly what we have come to expect from a Silicon Valley pioneer and underpinning it all is an enviable portfolio of IP assets, including a stockpile of patents that are widely credited with being among the most invaluable in the autonomous vehicle space. There is also a treasure trove of data, collated from the millions of miles that Waymo’s vehicles have chalked up since 2009, which the company has taken the first steps to make publicly available.

In 2017 Waymo, which is now a subsidiary of Google parent Alphabet, had ample opportunity to flex those IP muscles when it sued Uber, accusing the ride-sharing pioneer of trade secret theft and patent infringement (the patent claims were eventually dropped). The case ultimately settled in Waymo’s favour, but outside of the courtroom, the company has not talked in depth about its intellectual property – until now.

Late last year and early this year, IAM spoke with deputy general counsel Amar Mehta, who has oversight of the IP function, and his colleague assistant general counsel Van Nguy about the company’s patent strategy and IP culture, its decision to open up a vast store of data and its covetable portfolio of intangible assets.

“For me, joining Waymo was a chance to build an IP strategy that covers not just patents but all aspects of intellectual property,” reflects Mehta. However, it has also meant building a strategy that moves with the company’s changing aims in what remains a nascent industry. “That means that all options, offensive and defensive, are on the table, and I think we’ve formed a strategy that moves as the industry evolves.”

In an increasingly crowded space, quite how the industry evolves is fast becoming a multibillion-dollar question.

Twenty million and counting

If the guiding principle of Silicon Valley architecture is that the curb appeal of your headquarters is inversely related to your company’s impact, then Waymo is hitting all the right notes.

The only indication that the low-slung, former shopping mall in Silicon Valley is home to the leading disruptor of modern transportation is the steady stream of self-driving Chrysler minivans ferrying visitors and company personnel around Mountain View and beyond.

Inside, workers rub shoulders with colleagues engaged in other once left-field projects established under the Google X umbrella, including Project Loon – the initiative to bring the Internet to remote areas via hot-air balloons. Those ventures are at various stages of maturity – parts of the building remain firmly off-limits to prying journalists – but it is fair to say that overall Waymo is the largest and furthest along its corporate life cycle.

Figure 1. Top assignees in level 4/5 autonomy

Source: Dolcera

Figure  2. Top assignees – level 4/5 autonomy patents with Dolcera rank 3 and above

Source: Dolcera

In January, at the Consumer Electronics Show in Las Vegas, CEO John Krafcik revealed Waymo’s progress as he boasted that its self-driving cars had recently clocked up 20 million miles. He pointed out that it took around nine years to reach the first 10 million and then just 15 months to double it.

The development has been rapid but it is not happening in isolation. Waymo’s lawsuit with Uber underlines just how competitive the space has become as the ride-sharing company’s former CEO, Travis Kalanick, cited the existential threat that self-driving technology presents to Uber’s business model.

Most – if not all – major car manufacturers, as well as numerous suppliers, have pinned their hopes on getting an autonomous vehicle on the streets in the next few years. In 2016 Ford’s then CEO, Mark Fields, said that the company planned on mass producing an autonomous vehicle by 2021. Together with Volkswagen, the US auto giant has also committed billions of dollars to self-driving start-up Argo AI. Meanwhile, Ford’s Detroit rival General Motors has sunk its investment, as well as billions of dollars from the likes of SoftBank, into Cruise, which it acquired in 2016.

The competitive landscape has only become more cluttered, but what is clear is that with those millions of miles Waymo has built one of the leading IP portfolios. According to research by analytics business Dolcera, Waymo is the leader in terms of patent families related to levels 2/3 and 4/5 autonomy – with a narrow lead over Toyota in the former and a wider gap with the Japanese auto giant in the latter. Vehicle autonomy is ranked on a scale from 0 to 5, with 5 representing full automation, so Dolcera’s number crunching shows that Waymo is leading at the most advanced end of the spectrum.

It also leads in terms of quality, with 191 patent families at level 4/5 receiving a Dolcera rank of 3 or above. Although that study was commissioned by Waymo itself, others have also found the company leading the way.

A 2018 Nikkei report revealed that Waymo had unseated Toyota as the automated driving king based on a scoring mechanism used to evaluate companies’ US patent holdings. More recently, an analysis by PatentSight identified Waymo as one of the leading innovators in autonomous driving alongside giants of the space such as Ford, VW Group and Toyota.

When the key components of autonomous technology are broken out, data analysis also shows Waymo leading the way. For instance, a 2018 IAM piece entitled “Who owns the future of autonomous vehicles?” by Bruce Rubinger of Global Prior Art pinpointed Waymo as the owner of the largest portfolio of LiDAR technology, followed by German tier-1 auto supplier Continental.

The development of its own LiDAR tech is a good example of how Waymo’s approach has evolved and how its IP strategy has had to keep up. Originally, the company used LiDAR designed by Velodyne, a pioneer in this area. However, in 2012 it decided to pursue its own version of the technology, which is crucial to providing a detailed, 360-degree view of a vehicle’s surroundings.

Since then, fuelled by its discoveries in areas such as LiDAR, Waymo’s portfolio has grown considerably to around 1,600 granted patents and applications. While this may be small in comparison with the portfolios of giants such as Ford, Toyota, Bosch and Denso, Mehta insists that the company remains committed to building out its IP position: “We continue to invest aggressively in filing across a range of areas like in self-driving software, in our sensor suite, in our user experience and in design.”

Figure 3. Priority years for top assignees at autonomy level 4/5

Source: Dolcera

That, he says, has given the company a patent position in which there are now “thousands of instances where Waymo patents are blocking others in the autonomous vehicle industry”. Just how much of a block became apparent in late 2019 when Uber revealed that it was in danger of infringing Waymo’s intellectual property and may have to strike a licensing deal with its one-time courtroom rival.

As part of the settlement that brought the companies’ litigation to an end, Uber agreed to have an independent software expert appointed to ensure that its autonomous vehicle technology did not infringe Waymo’s rights. As the self-driving sector becomes more crowded, the Google spin-off appears to be in pole position to use its intellectual property to, at the very least, extract a licensing return from rivals.

This is where Mehta’s own background could be a considerable plus. Before landing at Waymo in 2016, he spent six years at Google as a senior counsel, arriving shortly before the headline-grabbing auction of Nortel’s patent portfolio and as the smartphone patent wars were gathering momentum. In the late 2000s, he served as head of investments and general counsel at investment firm Altitude Capital Partners, during what was arguably the heyday of IP monetisation.

That kind of varied experience undoubtedly helps as the company’s IP strategy tries to keep pace with the changing dynamics of the industry.

Keeping your options open

While Mehta takes overall responsibility for the IP group, his role has expanded in recent years to include corporate, commercial and employment matters in Waymo’s legal function.

Taking more day-to-day control of the IP team therefore falls to Van Nguy, who joined in 2017 and, like her boss, is an ex-Googler. While her time at the search giant was heavily focused on patents, her current remit is much broader and covers the full range of intellectual property. That, she says, can result in a much more holistic approach.

“I feel that it actually makes for a stronger patent strategy when you see all of the pieces together,” she insists. “When you silo intellectual property between, say, patents and copyrights, you might not have a complete strategy that really reflects the business’s goals.”

As well as her stint at Google, Nguy’s CV includes four years at IBM, giving her plenty of experience at some of the largest patent-owning players in the tech space. Waymo is thus a slight change of pace and Nguy enthuses about its start-up feel while acknowledging that it is backed by the considerable resources of parent company Alphabet, which has sunk billions into the self-driving dream.

More than 10 years since that dream began, Waymo is yet to generate meaningful revenue. But its hopes for future profit-generating growth are currently focused on four areas: ride hailing, long-haul trucking, delivery and personal car ownership. It has also started to look at where its technology could be used in other sectors, announcing in March 2019 that it would begin selling one of its 3D LiDAR sensors to companies in select industries such as robotics, security and agriculture.

With a business model that is still seeing plenty of flux, it is unsurprising that flexibility is a key attribute for the company’s IP approach. “Optionality is key for this industry and this business,” Nguy insists. She maintains that the secret to doing this is “working really closely with everyone at the senior level to develop and execute on the IP strategy” – that applies right up to knowing what CEO Krafcik is thinking. “We’re fortunate to have that at Waymo.”

For the IP team, it helps that there is a much stronger sense of the value of intellectual property than you might find at a typical high-tech business. Silicon Valley’s relationship with patents in particular can at times appear muddled – the aims of fast-moving, software focused-companies do not always align neatly with navigating complex IP rights.

Nguy insists that Waymo’s corps of engineers and senior leadership understand the value of intellectual property. It helps that as well as churning out reams of software code, Waymo is a hardware business developing the units that drive other brands’ cars. “The technology can be readily experienced which makes education on the value of IP more straightforward,” Nguy points out.

Figure 4. Overall patent filings in digitally implemented technologies – four selected players

Source: PatentSight

Figure 5. Overall patent strength per filing year in digitally implemented technologies – four selected players 

Source: PatentSight

Next stop: Detroit

Waymo always looked as if it might emerge as a car manufacturing company to rival the giants of the industry. From the start its technology was embedded in its own model, known as Firefly – a small-bubble shaped car, which did not exactly score highly in style terms. Today, one sits in an atrium at Waymo HQ – a display item that despite its cute looks reportedly once sent chills down the collective spine of the legacy car industry.

Detroit’s fretting abated – to some degree – in 2017, when the company pivoted to partner with manufacturers so that its technology would sit inside and atop the vehicles of others. Chrysler was the first to sign up and provide a fleet of its Pacifica minivans, which are now peppered with sensors and other proprietary gizmos, including a heap of computing brainpower in the back. In 2018 Waymo minted a second collaboration with Jaguar Land Rover to develop the world’s first self-driving electric vehicle. And in early 2019, in a demonstration of its auto sector bona fides, the company announced that it was setting up a facility in Detroit on a campus owned by supplier America Axle & Manufacturing.

As the leader in terms of number of miles under its belt, Waymo is in a strong position to drive a hard bargain with potential partners that fear losing market share as the industry goes through a step change. But at the same time, it cannot afford to leave all of the auto giants and their suppliers in the dust.

While auto rivals might have seen the company as a significant competitive threat, Nguy insists that Waymo’s focus is on the widespread adoption of self-driving technology. “We really want this technology to be used by as many people as possible; working with partners furthers this goal,” she argues.

For Waymo to succeed it needs, above all, a self-driving ecosystem to develop around it – one in which it might be top dog, but where others could also help to develop the necessary technology and infrastructure, as well as help to shape the regulatory landscape. Intellectual property can, of course, be used to block competitors but it can also help an industry to proliferate through licensing and other deals.

In many ways, Waymo’s release of a large dataset (see “Numbers on display”) last year shows the kind of balancing act that it might have to take in managing its intangible assets. As Mehta says regarding the decision to make the dataset public: “As you think about IP strategy, sometimes there are open ecosystems that advance the industry as a whole and then sometimes there are closed ecosystems where you have more ability to ensure a specific customer experience. Both can be beneficial to your customers.”

Mehta maintains that the ability to strike the right balance in Waymo’s IP approach comes down to being embedded in the business. “We really strive to understand the business’s goals and then make sure the IP strategy meets those goals,” he remarks. “We’re not offering our strategy in a vacuum, we’re crafting one that tracks what the business is trying to do.”

As the company continues to grow, one of the challenges for Mehta, Nguy and their team will likely be ensuring that they remain plugged into the broader business. They will also have to ensure that the department has the right skill set should Waymo choose to pursue an aggressive licensing strategy, or should infringement litigation break out in the auto sector reminiscent of the smartphone wars.

While the past decade has been filled with hopeful landmarks for the still fledgling self-driving community, reality has arguably started to sink in around the scope of what remains to be done. A recent article in tech-focused The Information claimed that thus far $16 billion had been sunk into the autonomous vehicle industry with three companies – Waymo, Cruise and Uber – accounting for half of that total. The main players will presumably still have to stump up billions more before we see fully autonomous vehicles cruising along our streets.

Some manufacturers have even started to scale back their previously lofty ambitions. In April 2019 Ford CEO Jim Hackett conceded that while the company still hoped to have a self-driving car on the road by 2021, any self-driving fleet’s applications “will be narrow… because the problem is still too complex”.

Meanwhile, Blackberry CEO John Chen, whose company manufactures software for the auto sector, predicted in early 2020 that fully autonomous cars would not be on public roads for at least another decade.

Waymo, probably wisely, has not entered into the bold prediction game, insisting instead that the technology will be developed and adopted step by step – or, perhaps more accurately, mile by mile. The IP team is just ensuring that it can keep pace.