27 Oct 2016

Patents Issues and the Internet of Things

This Article is co-authored by Amit Aggarwal (Co-founder, Effectual Services) and Karan Bhutani (Assistant Manager, Marketing)

The unprecedented growth in Internet of Things (IoT) has forced many large corporates, new-age entrepreneurs, and startups to embrace IoT technologies. IoT technologies are driving companies and transforming business in order to meet changing consumer demand. With rapid adoption of IoT technologies across sectors, many entrepreneurs are changing the way businesses were done in the past. Many businesses are facing numerous challenges related to traditional business models and are moving to IoT to compete with nimbler rivals. As many of these businesses have research and development (R&D) centers in India, there is an immense growth in the IoT ecosystem. IoT is broadly defined as interconnection of people and devices facilitated by growth of smart devices, cloud, and connected applications. The growth and proliferation of IoT technologies is driven by top spenders including the likes of R&D companies, startups, and service provides working globally on various IoT initiatives. Large corporates are leveraging IoT opportunity and launching new and innovative services. The internet of Things (IoT) enables devices to connect and communicate data with one another.

Mapping the global landscape
According to industry estimates, IoT is pegged at USD 655.8 billion and is projected to reach to USD 1.7 trillion by 2020. The growth in the IoT space is staggering and will be driven by connected devices. As IoT system continues to grow, many businesses will adopt IoT offerings to manage and grow their revenues in future. The IoT-enabled devices have seen a tremendous growth mainly driven by businesses that are using it to improve operations and create new business models. IoT can open a host of new opportunities and challenges. With billions of interconnect devices, there are large number of patented technologies that can be exploited to develop new products or services for the growth and development of the IoT ecosystem. These patented technologies can be further developed by amending and creating claims to exploit new emerging technologies markets, and products/services trends. Businesses develop these technologies to obtain maximum return on investment (ROI) for the expenditure incurred on research and development costs.

Internet of Things (IoT) is the much debated topic in today’s technological circles. The technology will change the way we live and conduct businesses in today’s business environment. IoT is expected to be a pervasive technology in the future as internet penetration is increasing through use of smartphones and other connected devices. The convergence of multitude devices has led to upsurge in the development of IoT technologies. Internet of Things is gaining importance in relation to business opportunities and market size. Businesses are making decisions with respect to choice of technology, standardization alternatives, business models and patent strategy. Large corporates and new-age entrepreneurs need to make a viable IoT strategy in line with the business objectives and overall corporate strategy. However, the IoT will vary from company to another as it depends on different approaches and business objectives to be harnessed by the company. Some of the technology companies will use standardized technologies while other may modify and create uniqueness in technology or product offerings. The companies embracing IoT technology need to develop an IPR strategy while assessing the future of business. This helps in identifying business opportunities and threats prevailing in the market. IoT technologies present enormous opportunities for new revenue models and technical solutions. This fact can be substantiated with billions of devices connected through traditional systems. There will be always evolution in technology and existing companies will migrate to IoT technologies. Several companies having businesses in the field of software, automotive, etc. are developing patent portfolio and have now started filing patents in the IoT domain. As a result, a number of technologies companies are filing patents in the IoT space, thus leading to patent wars and adding legal woes. While many companies are assessing the competition related to IoT technologies and launching new business models as compared to conventional business. Though, it will be difficult to compete with the companies having a strong patent portfolio in specific technology areas such as consumer applications. Having said that, businesses should have knowledge about the existing competition and traditional players. The businesses having IoT technologies can expect these existing players to have patents to area of their business or close to their business. Therefore, it is of pivotal importance to assess the IPR threats and pro-actively develop IPR strategy to safeguard innovations from potential infringers. The existing technologies need to evolve and scale for IoT ecosystem. IoT will leverage existing technologies but may require licensing to third parties. For businesses operating in the IoT markets, it is crucial to understand the importance of patent landscape in order to avoid infringement from third parties, especially in the areas where existing players enjoy a dominant position with their strong patent portfolio.

Many companies entering the IoT space should need to understand the market players, patent portfolio, competition mapping, white spaces in order to create an IP strategy and build strong patent portfolio for assertion. It also helps in delivering a higher rate of return in the IoT market. Given the diversity of technologies in the IoT space, there will be strong licensing positions held by established companies. The companies foraying into the market will have to be license, purchase patents, or acquired by existing players as a part of consolidation. IoT technologies will continue to evolve in the near future. Industries such as medical, wearable devices, smartphones, etc. are poised to grow on the IoT bandwagon as it permeates every facet of life. New technologies developed in the IoT space will not only increase the patent filing activity but will also lead to surge in patent licensing landscape as many of the patented technology will be used in novel ways for IoT.

About the Authors: 
Amit Aggarwal – Amit is a thought leader in the intellectual property space and has been a trusted advisor to clients around the globe. He has an extensive experience specifically within the IP domain and has worked with leading multi-national and regional corporations on patent strategy, business planning, operations, patent infringement, prior art searches, patent litigation and enforcement support services. His technical areas of experience include telecommunication technologies, operating systems, software, analog/digital electronics, power systems, and electrical machines.

Karan Bhutani – Karan has close to 6 years of experience in marketing and communications, public relations, advertising, brand management, and digital marketing. He has an MBA in Marketing and did his undergraduate studies from Birla Institute of technology.

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