High-tech amenities, like the popular Ford Sync system that lets drivers seamlessly connect their car and mobile phone, have helped bring more customers and huge profits to the automaker. But now a small company in Washington State says it actually developed the technology behind Sync and a handful of safety features that Ford is adding to much of its lineup. The company, Eagle Harbor Holdings, has filed a federal lawsuit against Ford, accusing the carmaker of infringing on seven patents.
Although the suit, filed last week, is unlikely to result in Ford being forced to stop putting the features in its vehicles, the carmaker could pay millions of dollars in licensing fees if it loses in court or agrees to settle. Analysts say such cases, commonplace in the high-tech world but not in the auto industry, will be seen more frequently as cars and trucks increasingly become roadworthy computers.
“When you start getting into more software in the vehicles you’re going to have this happen a lot more,” Kevin Hamlin, an analyst with the research firm IHS iSuppli, said. “Writing code in software leads to a lot of these suits. It just kind of goes along with the territory.”
Ford declined to comment on the suit, saying in an e-mailed statement that officials “have not yet had an opportunity to review the details.”
Eagle Harbor’s general counsel, Jeff Harmes, said the company had been in discussions with Ford for six years about licensing its technology to the automaker, but Ford cut off the talks in 2008.
The founders of Eagle Harbor, Dan Preston and his son Joseph, are inventors whose previous company, Airbiquity, developed technology licensed by General Motors for its OnStar communication service. Ford currently licenses technology from Airbiquity.
“This is a group of engineers with a long track record of developing commercially viable technology,” Mr. Harmes said.
In addition to Sync, which Ford developed in a partnership with Microsoft, the technology at issue in the suit includes MyKey, which gives parents the ability to monitor and limit actions by teenage drivers, and several safety features that use sensors. One of the features automatically steers the vehicle into a parallel parking space and another alerts drivers to vehicles in their blind spots and warns of potential collisions when backing out of a parking space.
Ford has been highlighting some of the innovations in recent commercials, and about 80 percent of Ford buyers get their vehicle with Sync, a $395 option that responds to voice commands and has been installed on nearly four million vehicles since its introduction in 2007. Sync has been a major contributor to Ford’s improved reputation and increased market share, though a newer offshoot known as MyFord Touch has been panned by Consumer Reports and criticized by buyers in a recent J. D. Power Associates quality survey.
Mr. Harmes said, before filing suit, Eagle Harbor repeatedly told Ford in 2009 and 2010 that it was infringing on the company’s patents.
“We would prefer to reach some business settlement with Ford as opposed to continuing the suit,” he said.
Eagle Harbor has been in discussions with other automakers and suppliers about its technology but none have agreed to license it yet, Mr. Harmes said. It also is working to commercialize environmental technology, including a method to strip metals from the waste created by coal-fired power plants
The company, with just 15 employees and a small office on an island in Puget Sound, would seem to have long odds in taking on Ford. But it is being backed by the Northwater Intellectual Property Fund, an investor in i4i, a Canadian company that was awarded $290 million in patent dispute against Microsoft that was upheld last month by the United States Supreme Court.
Katherine E. White, a law professor at Wayne State University in Detroit and an expert on intellectual property litigation, said infringement cases like the one against Ford hinged on whether the technology performed “the same function, in substantially the same way, to get the same result” as the patented concept. She said Ford was in little danger of having to stop offering Sync or the other disputed technology, so its risk was limited to paying royalties, not halting production and losing sales.
“Injunctions have become very difficult to get now for companies that don’t make anything,” Ms. White said. “Big companies can afford to pay the damages later. What they can’t afford is to stop producing.”
Ford agreed to pay $10.2 million to Robert Kearns, who invented intermittent windshield wipers, in a highly publicized 1990 case; it was the subject of the 2008 film “Flash of Genius.” Mr. Kearns later also received $30 million from Chrysler.
About a year ago, Ford settled a longstanding case brought by a Florida company, Paice, that accused Ford of infringing on a 1994 patent for hybrid technology. Ford agreed to license the Paice technology, but the terms were not released publicly. Paice also had sued Toyota, which agreed to license 23 patented technologies.
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