Ford Sync telematics in trouble due to patent issues?

A lead architect of Sync, Joseph Berry, has left the company, raising serious questions about who owns intellectual property vital to the popular voice-controlled infotainment system it developed in conjunction with Microsoft Corp.

Now, rival automakers are lining up to talk to Joseph Berry.

So is Ford, which tried to get the telematics expert to sign off on several patents — after he was terminated in late July. Berry says he is “happy to license” the technology to Ford, but the company has yet to respond. If an agreement is not reached, Ford could be forced to abandon key features of Sync.

The stakes are high. Since its introduction in 2007, Sync has been moving metal for Ford. Cars and trucks equipped with the system sell twice as fast as vehicles without it. And with a take-rate of 70 percent, Sync is boosting Ford’s average transaction price and its bottom line.

More importantly, Sync has achieved something the automaker’s critics thought was impossible: it has made Ford cool again. For the first time in years, Ford has something younger consumers want.

Ford says Sync is not threatened by Berry’s departure. While the automaker would not comment on the potential impact of a patent dispute, it claims its lead in telematics remains untouchable. “We do not see any risk to current Sync technology or further innovation and capability development,” said Ford spokesman Alan Hall. “We always knew that we would be followed. That’s flattering. It proves that Sync is the benchmark.”

Continental Corp. manufactures the hardware, while Microsoft developed the operating system and basic features that allow motorists to control their MP3 player or access their mobile phone’s address book. Nuance Communications Inc. is responsible for the voice-recognition system that allows the driver to control Sync with simple, verbal commands. Ford designed the user-interface and put the whole package together with the automobile, independent of Berry and his team.

Berry says his primary contribution was a system that allows Sync to transmit and receive data over a driver’s mobile phone. Using that technology, he says he led the development of a host of second-generation Sync features, including 911 Assist, Vehicle Health Reports and Traffic, Directions and Information Services.

These allow Sync to summon emergency services in the event of an accident, provide vehicle owners with diagnostic reports about their car or truck, and receive turn-by-turn directions, real-time traffic reports and other information, such as weather and sports scores.

Berry believes that he owns the rights to all of these technologies, as well as to the underlying network that makes them possible. In addition, he says he designed a yet-to-be-released module that will allow motorists to control virtually any application on their smartphone using Sync.

There has been no official ruling on who owns the rights to any of these technologies, though Ford has filed patent applications for all of them.

Berry signed some of those before he left Ford but says he was promised compensation he never received. After his termination, Ford asked him to sign off on others, prompting him to contact an attorney. He has since offered to license the technology back to Ford.

“That was a couple of weeks ago. I haven’t heard anything since,” he said. “All I want them to do is be fair about it. They’re more than welcome to use them. I want Ford to succeed.”

Ford confirmed that discussion took place, but would not comment beyond that.

Complicating matters is Berry’s assertion that he came up with most of these ideas before he went to work for Ford.

Already a well-known expert in the field of telematics, Ford first contacted him in 2006, gave him a sneak peak at Sync and asked him if he had any ideas about how to make it better.

At the time, Sync was limited to playing music and operating the driver’s cell phone. Berry said Ford was particularly keen on matching General Motors Co.’s OnStar system, which uses a call center to summon emergency personnel in the event of a crash. He explained how Ford could do the same thing with a driver’s cell phone.

A few months later, Ford hired him as a consultant.

“By the time Ford started paying me, we were well under way,” he said.

Ford ultimately made Berry an employee. His official title was director of product and business development for Ford Connected Services. Neither he nor Ford would comment on the reasons for his termination in July.

“There are several automakers that have approached me since then. We’re in talks,” Berry said.

“We know who Joe Berry is,” said Walt Dorfstatter, the incoming president of GM’s OnStar subsidiary, though he would not comment beyond that.

But Ford says Sync is a lot bigger than Berry. Though its exclusive agreement with Microsoft has expired, allowing the software giant to sell the underlying operating system to other carmakers, the Sync name and many of the features Ford has built on top of that remain proprietary.

“The way in which we executed our applications was unique, and others cannot simply duplicate them,” Hall said. “We look forward to announcing more new Sync applications.”

Courtesy: The Detroit News.

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