by Albert Williams
April 2017
(3089 words)

Contents

Part 1
The project 3
The technology 6
Innovation management used 7
Analysis of systems map and technology road map 10
Part 2
Introduction 11
Technology transfer strategy—what happened? 12
Recommended best practices 13
What is an appropriability regime? 14
Review of Google’s Self-Driving Car
Project’s appropriability regime 15
Technology readiness and commercialisation 17
Conclusion 19
References 21

 

Part 1

Google’s Self-Driving Car project:
A critique of its innovative technology transfer strategy

The project
Google Inc is a technology company based in Santa Clara County, California, in the United States of America (USA). Among the many online services and products that is it has introduced to the information technology market are: the web browser, Google Chrome; the application Google Streetview and the mobile phone operating system, Android. As well as numerous mobile devices. (Google.com. 2017)
It is a subsidiary of Alphabet Inc. a holding company set up on July 23, 2015, by the founders of Google Inc, Larry Page and Sergey Brin (Reuters 2017). Google’s interest in autonomous vehicles began as far back as 2007, but it wasn’t till 2009 when it acquired the start-up companies 510 Systems and Anthony’s Robots, who were the inventors of Google’s street view cameras, and who had already developed the proprietary technology for self-driven cars and begun trials, that Google began to be associated with the self-driving car project. (Malhota, 2017a)
The takeover was at first kept secret from the media until 2010 when the company announced that its prototype of the self-driving car was complete. (Poczter et al 2014a). In December 2016, Google’s Self-Driving Car project was incorporated as a company and is now called Waymo. Figure 1, is a systems map that indicates the management structure prior to the company formation.
This project meets the EMA requirements for part one because, T848 Block 1, identifies product innovation as any measure that adds improvement to an artefact in a significant way adding value for the end user. (The Open University 2016) as identified by the Organisation for Economic Co-operation and Development (OECD) and the Commission of the European Communities (CEC). According to Google its autonomous vehicles will reduce traffic accidents through prevention of driver errors. In addition, it will be a personal time saver, because driving would be done for you. The project would also help in the reduction of carbon emissions. (Poczter et al 2014b)
Additionally, the project also falls under the the Fifth-generation innovation wave (Rothwell, 1994; Dodgson et al., 2008) cited in The Open University 2017. The fifth-generation innovation wave is characterized by the growth of information technology companies, and concerns issues relating to technology transfer (The Open University 2016b) which is at the heart of my EMA submission.
The intellectual property associated with the project is the most valuable asset of the company. As recent as January, 2017, the project which since 2016 has been incorporated into a company– Waymo, has filed a law suit against Uber claiming that its autonomous vehicle technology was stolen from the company. (The Verge 2017)

Figure 1Fig1_EMA
Google’s Self-Driving Car Project’s systems map

The technology
The United States Patent and Trade Marks Office lists the patent for Google’s Self-Driving Car Project as a patent for ‘Engaging and disengaging for autonomous driving’ filed by Google Inc as patent number US9,352,752 B2 on May 31, 2016. (ROI, A. 2017) Table1 below, summarises the basic technologies that make a typical autonomous vehicle possible.

1.A Lazar range finder
2.A front camera for near vision
3.Bumper mounted radar
4.Aerial that reads precise geo-location
5.Ultrasonic sensors on rear wheels
6.Altimeters, gyroscopes and tachometers
7.Synergistic combining of sensors
8.proprietary software
9.Mapping software

10 Bespoke algorithms

Table 1
Technologies that make the autonomous vehicle possible

Innovation management used
One of the reasons that Google did not identify with the 510 System’s self-driving car project in 2009, was Google’s fear that its brand would be tarnished by any accidents involving humans (Malhota 2017b). The company only disclosed the matter in 2010 (See Figure 2) when work on a prototype was completed. (Waymo. 2017). (Heslop et.al2001) cited in The Open University 2016 suggests that there are four questions that entrepreneurs should ask to determine the state of readiness before adopting or investing in a new product or technology: 1. How novel is the technology? 2. How large is the market now and in the future? Is it ready for commercialisation and 4. What is the inventors’ profile.
As of 2017, it is estimated that the number of engineers and others associated with the self-driving car project is 170 persons. (Smith, 2016). In part 2 of my EMA submission, I will critique Google’s innovative technology transfer strategy. Touching on its appropriability regime and other aspects of intellectual property management that the project would have needed to deal with.

 

Fig 2 EMA_ TRM

Figure 2
Google’s Self-Driving Car Project’s technology road map

Analysis of Systems map and technology road map
Firstly, the system map showed me how the project benefited from being embedded within the Google system. Because the early innovators of the project did not have the capital needed to bring the invention to market, by allowing Goggle to buy off 510 Systems and Anthony’s Robots, the idea could now be developed successfully for the commercial market.
The system map, also shows us the factors bearing on the project in its external environment. As you can see from the technology road map, that along the way Google had to apply for various licences from state authorities to test the project on real motorways, and not just within Google’s testing grounds.
The technology road map tells me that this project was able to gain momentum quickly because of the lead time that they had in developing a prototype, as well as maintaining a level of secrecy, they were able to forge ahead year-by-year on perfecting the prototype.

The milestones are clear, and the process of validating each stage of the project’s development most likely was built on Cooper’s linear-rational approach as cited in The Open University (2016)

Part 2

A critique of Google’s Self-Driving Car project’s
innovative technology transfer strategy

Introduction

In Part 2 of this EMA submission, I will be critically evaluating to what extent the innovative technology transfer strategy of Google’s self-driving car project compares with concepts and ideas expressed in T848 Block 3. Google’s Self-Driving Car Project was spun out as a company in 2016 and is now called Waymo. Even so, the on-going litigation with Uber, a rival in the self-driving car market, proves that Google has had a difficult task in controlling the movement of key players with their tacit knowledge. As well as their access to trade secretes of the business.

To begin, I will attempt to review how and why the intellectual property was transferred as part of the take over of 510 Systems and Anthony’s Robots in 2011 by Google Inc. I will also discuss the ongoing legal case between Waymo and Uber involving the alleged theft of intellectual property relating to the designs of key components of the self-driving technology by a former employees of Google to show how, Google was experiencing lack of control of its human resource management of key players during, and even after the project was spun out as a company, and intend to analyse what may be the reasons for this.
To do this, I will compare and contrast selected concepts of the management of technological innovation as taught in the Open University module: T848- Managing technological innovation: Block 3. I will critique how effective was its appropriability regime in acquiring the patents and how Google manages its Intellectual Property portfolio in general.
As well as references from T848, I will be using a mixture of academic papers and technology blogs and media stories found on the Internet.
I will conclude with a summary of my findings and a set recommendations appropriate for the successful management of intellectual property by a technology company or project such as the project under review– Google’s Self-Driving Car project.

Technological transfer strategy–What happened?

According to (The Open University 2016) one of the key aims of a technology transfer is to add value to an existing technology. In the case of Google’s Self-Driving Car project, the technology was invented by a start-up company, 510 Systems founded by graduates of Berkley University, Anthony Levandowski, Andrew Schultz, Pierre-Yves Droz, Levandowski , and Sebastian Thrun, who was the mind behind Google’s Street View technology. (Malhota, S. 2017b)

In 2007 and 2008 Thurn and Levandowski joined Google, and were responsible for initial work on Google’s prototype Pribot– five autonomous Toyota Priuses before Google purchased both 510 systems and Anthony’s Robots a company founded by Levandowski and, I presume all associated intellectual property in 2011. (Malhota 2017c). At the heart of the transfer was a guidance system, a smart camera that could generate coded positional data from GPS units and sensors. As well as a mobile 3D laser-map-making technology using Lidar, (Light sensitive radar) (Malhota 2017d)

Recommended best practices.
The question that could be asked up front, is, who benefited most from the technology transfer over the lifetime of the project. Google purchased 510 Systems and Anthony’s Robots for an undisclosed amount. But because the tacit knowledge of the technology was embedded in its founder, Levandowski, Google seems powerless to prevent him deploying the technology outside of the Google project to which he had sold off the rights. T848-Block 3 suggests that during a transfer of technology between and inventor and a receiver, that negotiations would include such instruments as an explicit contractual agreement that outlines the intellectual property involved, and who owns what percent of the technology. (The Open University 2016c)

Further, such agreement would define whether the take over of 510 Systems self-driving car technology was exclusive or non-exclusive. Because the take over of 510 systems was kept secret, there is not much documentation in the public domain about the process of the transfer, but one could presume, that Google must have been assured that by its secrecy and lead-time to market, that it could establish a dominant design ahead of any imitators/competitors. It would do this adding its reputable brand name and a ‘bundle’ of complementary technologies and embedded the self-driving car project within its business model, according to T848-Block 3.
What is an Appropriability regime?
To deal effective with a technological transfer, T848 Block 3 suggests the imposition of an appropriability regime. According to (Teece, D.J. 1986), cited in The Open University 2016, the formal appropriability measures that prove ownership and protect a company’s intellectual property are the use of Patents, copyrights, trademarks, trade secrets as well as non-disclosure agreements. Deployment of these strategies, are some of the ways that The Google project must have used to protect its proprietary technology from competitors. Google would have made legally binding contracts with its engineers and staff to protect both its codified knowledge pertaining to the technology-know-how, and its tacit knowledge embedded in the skills-sets of key employees.
(The Open University 2016) cites the control of tacit knowledge is important if a company is to prevent its trade secrets from being leaked to competitors for example, It suggests that non-competition clauses and contracts; sanctions of resignations and other ‘collective labour agreements embedded in labour legislation adds another layer of protection of a company’s intellectual property through such appropriability regimes

(Baughn et al 1997 p. 112) cited in The Open University 2016, says that maintaining a tight control of your company’s personnel resource is the foremost means of protecting intellectual property in a firm. Even if all of the above are institutionalised in the company, according to The Open University, there will always be ‘head-hunters’ who will try to lure skilled talent away from the company. However, according to The Open University 2016, share-options and other psychological incentives are sometimes also used to keep workers happy to remain with the company.
Review of Google Self-Driving Car Project’s appropriability regime
In 2009 when Google acquired 510 systems and Anthony’s Robots, two companies founded by Robotic engineer, Anthony Levandowski, who joined Google in 2007, the self-driving car technology that Levandowski was developing, from that time now became known as a Google’s Self-Driving Car Project. (Malhota, 2017) Since much of this early transfer of ownership is obscure because of secrecy surrounding the deal, I cannot say what the terms of the agreement was. However, when Levandowski left the Google project in January 2016 without notice, he set up his own company—Otto which was a technology company retrofitting haulage trucks with self-driving technology (En.wikipedia.org. 2017). Otto was subsequently purchased that same year by Uber for US$680 million.
This year, Waymo (formerly Google Self-Driving Car Project) filed a lawsuit against Uber suing and seeking damages from Otto and its owner, Uber, “for allegedly stealing trade secrets, unfair competition and patent infringement.” Waymo claims that former Google engineer, Lavanwoski, downloaded to an external hard drive14,000 sensitive files and designs of the circuit board of Google’s Lidar circuit board and emailed to other Google engineers suspected of working for Uber. In addition,Waymo says that a forensic investigation has also revealed that, “supplier lists, manufacturing details and statements of work with highly technical information” were also stolen(Recode 2017).

So this raises questions of whether the self-driving technology has indeed been stolen by Uber What were the terms under which Goggle acquired the 510 systems and Anthony’s Roberts? Can Uber prove that that their technology is not an imitation of Google trade secrets?
One of the tools I think Google has used as an appropriability measure, is to give generous bonuses and compensations expecting loyalty and secrecy in return. What is apparent, however, is that engineers and other key staff were of the view that they were now rich enough to pursue other ventures (Barr, M. et al 2017)
Could we say that the technology transfer between 510 systems and Google was successful? Not really, as the present legal feud between Waymo and Uber indicate. This story is likely to be in the news for some time until the lawsuit has been resolved in the future.

Technology readiness and commercialisation

The final point considered in a successful technology transfer process, is the company’s criteria in judging whether a technology is ready for commercialisation. For this segment of the EMA, I will review briefly Google’s decision to spin off the Self-Driving Car Project into a separate entity– a company called Waymo in 2016. Waymo is stands for a ‘new way forward in mobility’. Central to that decision according to (The Open University 2016) is a perception by the project owner that their Self-Driving Car Project had reached a level of maturity that it could be commercially exploited without fear that its patent would be contested and that its technology could not be replicated by competitors.
In December 2016, CEO of Waymo, John Krafcik announced in a press conference in San Francisco that Google’s self-Driving Car project had become Waymo. (Etherington 2016). Not only had Waymo come into existence that year, but a handful of the former top engineers also left the project in 2016, including Chris Urmson and two other engineers long associated with the project. This was a major blow to the company seeing that Sebastian Thrun and Anthony Levandowski, had quit in 2013 and 2014 respectively (Lawrence et al 2016)
Interesting to note too that, (Muoio 2016) is of the opinion that Waymo has lost it’s way when it comes to marketing the product, although the first to begin research and experiments with Robotic cars. Nevertheless, according to Muoio, Krafcik announced in the December 2016 press conference, a set of key indicators that its self-driving technology was ready for the next phase of development towards a commercial product in collaboration with other strategic partners in the auto industry.
Among those announcements were: that Waymo is manufacturing both the hardware and software of it driver-less car technology. Also that the company was aiming for a SAE- level 4 autonomy certification. Moreover, Krafcik announced that Waymo had developed a new vision system and new short and long LiDAR system. According to (Muoio 2016) Waymo’s has slashed the cost of building the LiDAR systems by 90%. which makes it more cost-effective to grow into new markets.

Conclusion
In this EMA, I have sought to analyse how Google managed its intellectual property acquisitions in light of its Self-Driving Project. Technology transfer in a project such as this, proved to be a very lucrative but risky undertaking. Based on what I have researched mainly from secondary resources, I can deduce that Google although sought to keep its early experimentation of self-driving cars a secret, it did not achieve totally secrecy, as some of the main players were not sufficiently managed. For this reason, at the point in the project where it should have seen a stable transformation of its processes and human resource.
In my research, I have found that Google’s compensation scheme of may have worked against them, delivering an unstable environment and brain drain, and high turn over of leading engineers at crucial times.
I found that the interaction between a start up—510 systems and a multinational technology company—Google Inc would have been better, if the two entities had worked in partnership, and that 510 systems had licensed the technology to Google.
The fact that Levandowski is the centre of a litigation case is proof, that the inventor could not disassociate himself from this inventorship and thus his right to the basic components of the technology.
Additionally, while Google’s quest to take ownership of the technology and to keep it secret, to gain a possible lead-time, it is possible that leaks of ‘sensitive information’ germane to autonomous driving vehicles may have been going on for sometime, hence the rise of auto makers declaring that they too will soon mass produce driver less cars.
It appears, that although Google was an early adopter of the technology, that it may lose out out in being first to market.

The End

References
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