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Why Your Business Needs to Develop a Strong IoT Patent Portfolio

Here are some strategies regarding where to focus protection, as well as whether to draft patents to cover IoT devices or the analytics and systems that make them interesting.
By Matthew H. Grady and Michael J. Attisha
May 27, 2018

Intellectual property plays a key role in protecting innovation, especially in areas of technology that develop quickly. A strong patent portfolio is of particular importance to startups in the Internet of Things (IoT) space, as their survival depends greatly on the market success of their core technologies—and they are often in danger of having those technologies undercut by larger competitors. Within the IoT space, there are unique challenges to obtaining strong patents. For example, where should you focus protection? Should you draft patents to cover the IoT devices or the analytics and systems that make them interesting? Can you protect both aspects? In this article, we will discuss some strategies for tackling these challenges.

Smart devices are often sold to consumers while the IoT business establishes the network necessary to operate or communicate with those devices. While this configuration can make new devices sing, it can also present problems for targeting protection.

Left to right: Matthew H. Grady and Michael J. Attisha
Patent claims define the scope of legal protection afforded by a patent. When a company is suing a competitor for patent infringement, the scope of the claim language determines whether a product does or does not infringe. Even where your innovation stems from the interplay of smart devices (operated by consumers) and the network (operated by the manufacturer or distributor), there is a significant advantage in obtaining patent claims that a competitor can be shown to directly infringe. A claim is directly infringed if the competitor performs or has a device covered by all the claim elements. But direct infringement is not always possible for a smart device that relies on network analytics and architecture.

Consider a smart grid and smart thermostat that communicate with a network of other devices, such as street lights, all managed by remote servers. It is unlikely that a competitor would directly infringe a patent claim that covers the system comprising the smart device, street lights and servers, because it doesn't sell all the elements of the system. Nor does it control or operate the entire system because consumers operate the smart device.

While claims targeting only the smart device can be written, the patentability of those claims can be questionable without the other elements of the network or system. To be eligible for patenting, the content of a claim must be novel and non-obvious over what was previously publicly known. While smart devices are frequently commercially novel, the standard for being new and non-obvious in patents can be stricter. A device that does not include new technological features will not be considered patentable, no matter how commercially valuable the intended use.

Balancing patentability without sacrificing scope can prove difficult for an IoT-focused business. Patent claims directed to a system or method may be novel and non-obvious but not directly infringed, whereas patent claims directed to a smart device being sold may not be patentable because the claims might not be novel or non-obvious. Given these challenges, how should a strong IoT patent portfolio be developed?

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