May 27, 2018Intellectual 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.
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?
A first step includes identifying who your competitors are, and therefore the potential infringers. Claims should be focused to target the activities of these competitors. Envision the systems, methods and/or devices sold or controlled by the competitor and then draft claims. In some cases, direct infringement is difficult to establish once enough novel features have been included for patentability. However, claim language can be tailored to reference features not supplied or controlled by the competitor, but still require the use of the system, method or device to interact with those features. With the IoT, this can include claim elements that limit the types and ways in which data flows through components of a system.
For example, a claim directed to a smart device can recite limitations on the ways in which the device communicates with a server and the type of data communicated, without claiming the server or specific data itself. Thus, these limitations can impart patentability without sacrificing the possibility of direct infringement. And a competitor would directly infringe by selling the smart device having those connections. Instead or in addition, claims to a smart device could limit the triggers that cause data to be received or sent from or to a server, what that data contains and how it is produced, how the data is processed by the smart device, and how the processed data achieves some unique function(s) of the smart device, among other options.
Although direct infringement is easier to establish, being able to show a competitor's indirect infringement—in other words, causing, inducing or participating with others to infringe—can also be beneficial. Indeed, a diversified approach that covers indirect and direct infringement scenarios may be best. Overlapping scenarios can be developed in multiple claims or applications to ensure strong protection against competitors' activities. Claims that are likely to only be indirectly infringed can often be quicker and easier to obtain because they recite novel technical features. The value in quickly obtaining a patent can be significant, even if successful enforcement may be a challenge. Continuation applications can be filed later to target direct infringement.
An example strategy for a smart grid application may include claims directed to: (i) an in-home smart device with claim elements limiting the types of data operations; (ii) server functionality with defined connections to and communicating with smart devices; and (iii) the system as a whole. Claim (iii) may be easier to examine with the patent office because of the interplay of the system elements, but sacrifices the possibility of a single infringer. In conjunction, claims targeting (i) and (ii) can be pursued to provide protection against direct infringement by a competitor, though these claims may be less clearly novel and non-obvious and therefore take more time to patent.
This multi-faceted approach can be leveraged to provide narrower and faster protection, while pursuing stronger coverage in the long term. The approach should be tailored to core features and future development of your products to ensure alignment with your protection efforts, and tailored to account for your competitors' products and strategies to ensure deterrence.
Matthew H. Grady is a shareholder and Michael J. Attisha, Ph.D., is an associate in the Electrical and Computer Technologies Practice at intellectual property law firm Wolf Greenfield, in Boston. They can be reached at mgrady@wolfgreenfield.com and mattisha@wolfgreenfield.com, respectively.
