Patent Drafting in the IoT Domain
The point in time when the number of connected devices outnumbered the number of people on the planet corresponds to the birth of Internet of Things (IoT).
The path so far and the road ahead: The number of IoT devices increased 31% year-over-year to 8.4 billion in 20171 and it is estimated that there will be 30 billion devices by 20202.
Future Potential and Market Coverage: Needless to say, this technology is expected to dramatically change not only how we work but also how we live. With cost of technology required to control these devices going down and increasing internet connectivity through smartphones, IoT is expected to be an all pervasive technology in the next 10 years. The technology is so diverse that it has applications in almost every field - Consumer applications, Enterprise applications, Medical and Healthcare, Automation and control, Transportation, networks to name a few. The global market value of IoT is projected to reach $7.1 trillion by 20203.
McKinsey study: A McKinsey study4 estimates the potential economic impact of Internet of Things to be $2.7 trillion to $6.2 trillion per year by 2025 with applications in Healthcare, Manufacturing, Power, Urban Infrastructure, Security, Vehicles and Agriculture.
- Resource Management in a Wireless network saw the bulk of patent related activity in the IoT domain.
- The patent distribution (owners) in this domain is very fragmented. LG holds the largest patent portfolio (around 5%) and, is closely followed by Ericsson and Qualcomm.
- The US geography has seen the maximum patent filings and is closely followed by the big Asian markets of Japan, Korea and China.
In terms of high patent portfolio quality as well a good patent filing activity, Qualcomm turns out to be the leader in this domain.
As is clear from the above, IoT has been a hotbed of innovation with a large number of firms investing hugely in this domain.
Obtaining a patent in IoT domain, however, is not a cakewalk. There are several challenges faced by firms that operate and innovate in the IoT domain. These challenges can be broadly classified into the following four categories:
Challenge #1: Claim scope
IoT systems involve multiple devices working together to achieve a particular goal. As a result, there can be many different ways in which the same invention be claimed in a patent application, for example:
- Device or apparatus claims that cover the IoT device itself (e.g., components controlled by a controller/processor).
- Method claims that cover the way the IoT device operates/functions.
- Method claims that cover the way IoT devices communicate with each other or with other types of devices (e.g., routers, servers).
- Software-styled claims that cover the software-implemented processes performed by the IoT device.
- Software-styled claims that cover processes performed by a remote server (e.g., “in the cloud”) that communicates with the IoT device.
- System-level claims that cover multiple IoT devices interacting with each other (e.g., watch and phone; hub and beacons; router and WiFi devices).
However, due to cost reasons, most patent applications may be limited to two to four independent claims.
Solution: Keeping in mind patentability requirements, cost of obtaining the patent and value proposition from the invention, we suggest the following approach to address the aforesaid tradeoffs.
# Solution 1: To figure out the best type of claims for each particular innovation, consider the following factors:
A. What is the business model of the company?
- For sellers of the actual IoT device, it is preferable to prioritize device claims and method claims that cover how the device operates.
- If the company only sells software, software-style claims can be prioritized.
- If the company is a backend service provider, the server side “in the cloud” processes can be prioritized.
B. Where does the point of novelty lie?
- If the invention deals with how the IoT device operates, it might not be possible to have a viable claim for server-side functionality.
- If the invention is software-implemented, consider software-styled claims.
C. What is the relative licensing value for each type of claim?
It might be possible to license a software claim across multiple different industries (e.g., for operation on multiple different types of devices).
D. Who is the potential infringer?
The general rule of thumb is to choose a claim that you can assert against your competitor (as opposed to your customer or end users).
# Solution 2: Accounting for unexpected prior art(s):
Because there’s a huge amount of innovation in the IoT space right now, it’s possible that during patent prosecution, the invention might encounter prior art that’s currently unknown (e.g., unpublished patent applications). Therefore, the claim strategy should take this into account. For example:
- Several backup positions can be built, either as dependent claims or in the specification.
- To begin with, a focused claim set can be relied upon, and broader claims can then be pursued in a continuation application
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