South Korean automaker Hyundai Motor posted the biggest gains in the number of patent filings over the past five years, narrowing the gap with industry leader Toyota, according to the report by Thomson Reuters IP & Science.
The survey, "The State of Innovation in the Automotive Industry 2015," analyzed patent applications and mapped trends in five key areas: Propulsion, navigation, handling, safety and security, and entertainment.
Hyundai was among the leaders in every category, ranking number three overall behind Toyota Motor Corp and Robert Bosch.
Hyundai, which along with sister company Kia Motor is fifth in global sales, has outperformed the overall auto market thanks to its stylish, yet affordable models, but experts say the duo lacks a technological edge to better compete with rivals.
Hyundai, which has been a fast-follower in the industry, had seen a surge of patent litigation since gaining global prominence in recent years.
Hyundai's patent filings more than doubled to 1,200 in 2013, from 500 in 2010, according to the report by Thomson Reuters' Intellectual Property & Science business.
Although Toyota is still the overall leader in terms of auto innovations - those protected with patents - Hyundai is the fastest-growing, most up-and-coming innovator in the space, the report said.
Hyundai ranked third in the number of patent lawsuits filed by the firms which specialize in suing others for infringement, just behind Ford Motor Co and General Motors Co, according to SU Intellectual Property, a Seoul-based IP firm.
"Hyundai has belatedly realized the importance of patents and has been keeping pace with rivals," said Jung Dong-joon, representative attorney of SU Intellectual Property.
"While Hyundai has increased the number of its patent filings, it is still a follower in terms of patent quality," he said, adding that Hyundai needs to secure more core patents.
Overall, Asians and Germans dominated the top 10 companies for patent applications, while GM, ranked seventh, was the only U.S. company making the list.
The automotive sector saw the number of patent filings around the world grow by double-digits year-on-year over the past five years, the Thomson Reuters report said.
While Google Inc has dominated headlines in self-driving cars, Toyota, GM and Hyundai received the most patents in this area, said Bob Stembridge, one of the report's authors.
Telematics refers to the linking of wireless communication devices with computers in cars, for navigation, to track vehicles on the road, or to control a car's functions from your smart phone.
"We see a lot of increasing activity in telematics and driver assistance systems as the supporting technologies for self-driving cars," said Stembridge, an analyst with Thomson Reuters IP & Science.
Among the leaders in driver-assistance patents are Bosch, Daimler AG, Continental AG, Valeo SA and Volkswagen AG's Audi.
GM and Hyundai lead the advances in telematics.
© Thomson Reuters 2015