"It is our job to innovate, but also to make sure that our innovation can be used by the wider market"

Elaphe Propulsion Technologies is one of the market leaders in in-wheel motors (IWMs). Their patented in-wheel powertrain system aims to do away with the traditional architecture of a motor vehicle, resulting in the world’s first commercially scalable IWM system. Their technology dates back to the late 1980s when Gorazd Lampi? (national decathlete, chess player, scientist, physicist and current CEO of Elaphe) met Andrej Detela (Slovenian philosopher, scientist, quantum physicist and inventor) at university. There, Lampi? was introduced to Detela’s research on high specific torque electric motors. Together, they founded Elaphe Propulsion Technologies with a mission to bring in-wheel powertrain solutions to the automotive market.

The company has since grown to become a leading designer, manufacturer and distributor of high-tech propulsion technology that allows manufacturers to build bold new products that are better suited for the mobility needs of a rapidly changing society.

The in-wheel powertrain platform includes motors, power electronics and intelligent multiple-motor propulsion control. The company’s patented electromagnetic design enables specific torque up to 100 Nm/kg and 200 kW of power per regular car wheel, and provides superior packaging benefits. Among other things, their unique selling point (USP) lies in the flexibility that they offer by enabling manufacturers to integrate their preferred off-the-shelf corner components (brakes, rims, bearings, suspensions, etc.) while also offering a turnkey solution.

The company has a team of close to 100 vibrant, experienced and ambitious innovators, engineers and scientists, and has been the recipient of various accolades such as the I4MS Disruptors Award at the Digitising European Industry Stakeholder Forum 2019 awarded by the European Commission as part of the initiative for digitising the EU’s manufacturing sector.

The IP & I team at EIT InnoEnergy (IE) sat down with patent engineer Dr Zdravko Balorda (ZB) to find out more about how they manage and utilise IP at such an innovative, tech-driven company.

IE: To start off, can you tell us about the role that IP plays in Elaphe’s business model?

ZB: Developing new IP has been a fundamental objective of Elaphe since its inception in the early 2000s. At that time (and even to this day), no appropriate in-wheel electric motor solutions have existed to serve as an agent of change in automotive powertrain design and to ensure its efficiency and efficacy. The Elaphe team wanted to create efficient, light and compact in-wheel motors to provide vehicle manufacturers with the freedom to design energy-efficient and user or mission-focused vehicles. Theoretical analysis of bespoke, novel electromagnetic topologies and the industry’s high-level vehicle requirements indicated the feasibility of accomplishing such a challenging task.

In hindsight, the business model at the time focused only on the new generation of IP and on licensing this IP to interested manufacturing partners along with technical assistance. However, during the development of the core IP, it became clear that it would need to be accompanied by a wider set of competencies and know-how relating to electronic control mechanisms and power, as well as control hardware, mechanical design, computer-aided engineering (CAE), testing and validation, production process development, vehicle integration, quality, and other fields. For the purposes of effectiveness and maintaining a holistic approach, all of these competencies were integrated under one roof at Elaphe.

From the commercial perspective, three different IP-related business models and value propositions were developed and remain in use today:

A) Develop & Deliver – A full solution designed, validated, and manufactured by Elaphe, with operations directly from the EU headquarters.

B) Licensing - Designed, developed and validated by Elaphe, then localised with a partner original equipment manufacturer (OEM) (e.g. the Lordstown Endurance pick-up truck with IWM licensing).

C) Manufacturing and sales joint ventures (JVs) for specific markets (e.g. an existing JV in Hangzhou, China).

The key strengths of Elaphe are both technical and commercial in nature. The benefit for customers can be maximised by selecting the business model that best fits their competencies and capacities. Technical strengths include market-leading performance, in-house know-how and technological maturity, all of which are backed by relevant IP.

Besides patents, Elaphe’s IP also includes trade secrets, brands, and deep know-how.

IE: That’s a very interesting approach. You mention that developing new IP has always been a fundamental objective of Elaphe. Can you describe Elaphe’s IP strategy?

ZB: Elaphe is focused on enabling significant changes in the development of electric vehicles. The technical challenges associated with IWMs are both new and very onerous, so the solutions are easily recognised as patentable.

Elaphe is mostly focused on generating relevant, new IP, not on creating patents for incremental improvements.

Elaphe’s IP has both proactive and defensive purposes. Part of the proactive potential is related to protecting the investments of Elaphe and our customers by preventing competitors from using our solutions. The defensive element is related to the freedom of operation that our extensive research continuously ensures.

Our IP (know-how and trade secrets) helps build company value and creates new revenue streams, like offering manufacturing process solutions to our manufacturing partners. The transfer of IP rights of both patents and know-how is an essential part of this process.

IE: How do you discover and identify inventions and creations and subsequently protect them? Have you written your methods down in an explicit process or policy document?

ZB: Based on multiple years of experience with the innovation process, we designed processes that both encourage and discover inventive ideas. Our company culture and values encourage creative thinking and getting deep into the scientific part of the content we deal with. Cross-disciplinary know-how and collaboration also form major parts of our achievements, as does the ability to analyse the invention process. All these processes are documented and are part of our product development processes.

We have patent engineers supporting the innovators and managing this process. Moreover, they provide a wide, early prior art search before a solution is considered for an invention. Our CEO, CTO and the core development team are authors of several patents. The CEO has WIPO training, and we also use external services when preparing and reviewing the patents and IP in general.

IE: With a work environment that is so encouraging of innovation, what does Elaphe’s IP portfolio currently consist of?

ZB: Elaphe’s IP portfolio consists of a wide array of patent families with new ones constantly in the pipeline, including trade secrets, broad know-how and copyrights.

Patents are filed to protect the apparent elements of the work implemented in the final products. The products are placed on the market, which is considered the same as public disclosure of the underlying art and could be partly subjected to reverse engineering by competitors. An important part of the patent portfolio covers the IP rights relating to the manufacturing processes and the machines that allow us to provide licenses to third parties to manufacture our products.

Trade secrets and know-how are considered business secrets, and employees are directed to manage them accordingly (from both personal responsibility and legal standpoints). Maintaining the secrecy of know-how is often a more appropriate solution than patenting, since it minimises the need for disclosure of the underlying art, regardless of the level of protection. This preference is common in the industry when protecting manufacturing processes or expertise in certain technological domains. It is important to identify the scope and contents of the confidentiality of the know-how. As a company that strives to be actively present in society, we hope that our employees can be passionate about their work. Maintaining the secrecy of know-how, therefore, requires it to be well defined.

Software protection is mostly covered by copyrights, as patenting is often considered less appropriate.

Trade marks and branding are important to our long-term strategy, in combination with the visual characteristics of our products. They convey the quality and due diligence in product development that has been built through more than 20 years of hard work. We must protect our legacy and maintain our quality.

Our trade marks carry a lot of value; they carry a tradition of dedication to quality, state-of-the-art solutions and durability.

The Elaphe trade mark is protected and keeps us visible in the market. Our Propulsion Control Unit (PCU) is part of Smart Systems Integrated, a collective European Union trade mark . We consider trade marks an important pillar of our commercial strategy. ‘Powered by Elaphe’ adds value, not only to us, but to our partners and their customers.

The brand Elaphe was first registered in Slovenia in 2015, and was later extended by an international trade mark to the European Union, South Korea, Norway, the United States, Switzerland and China.

IE: For our final question, out of curiosity, have you been in a position where you had to enforce your IP rights or defend your company against third parties asserting their IP rights?

ZB: The purpose of IP management is to be well prepared for both offensive and defensive business scenarios. However, that is not the only purpose. Some patents, for example, also have other purposes like education and preventing duplicative research, which can slow down overall progress. We use it for these purposes as well.

?It is our job to innovate, but also to make sure that our innovation can be used by the wider market. Otherwise, we are not positively impacting society, the environment and general sustainable technological progress.

Neither analysis of competitors nor the freedom to operate have created the need to use either the offensive or defensive potential of our IP so far.

Of course, we also have cases where we make mistakes. Once, an engineer of ours came up with a solution that had already been patented by a third party, and this was only discovered while preparing the patent documentation at a late stage in the process. It would have saved us a considerable amount of effort to react more quickly to that challenge. We are learning all the time.

The IP & I team at EIT InnoEnergy specialises in combining public sources and state-of-the-art research tools to provide our innovative member companies with business intelligence. This venture is currently supported by EIT InnoEnergy.