Internet of Things 2015 Year End Review (3): IoT Opportunities and Risks Insights from Patents

Internet of Things 2015 Year End Review (3): IoT Opportunities and Risks Insights from Patents

 New IoT Product/Service Development
Even though the IoT is getting a huge attention recently the concept of interconnected billions of devices is not new and has been under development for over 10 years. Thus, there are a large number of related patented technologies that can be exploited for developing new products/services, and thus, new business for the emerging IoT market.

The basic principle in the Blue Ocean Patent Strategy is to exploit existing patents to achieve the value innovation, and thus, to serve the customers in fundamentally different ways. For example, a company in the consumer electronics industry that wants to enter the connected car industry can exploit existing patents that cover the factors of the strategy canvas. By deciding which factors (that are covered by the existing patents) are really crucial, and thus, needed to raise and/or create, a new business model that changes the nature of competition away from the typical direction of the medical device industry can be developed. Patents regarding superior UI/UX, compact/portable design, robust wireless connectivity are the good candidates for the BLUE OCEAN FACTORS.

Another way to achieve the value innovation is to integrate into the existing platforms. HBS Professor Iansiti, the author of “The Keystone Advantage,” suggested technological assimilation as a new engine for technological innovations in his article “Creative Construction.” In the technological assimilation frameworks, a core innovation that once provided stand-alone products or services for a specific market can be the building blocks for mass market generating innovations through assimilation to broader platforms that were not existed at the time of innovations. A good example may be the GPS technology providing LBS (location based services) applications for smartphones and automobiles. Another good example may be the DVR technology of TiVo that was integrated into digital set-top box platforms. By contrasting all possible value propositions from an existing platform to the potential value propositions provided by the inventive departures (novelty points) of the existing patent(s), the integration feasibility of the existing patented technologies into the platform can be found, and thus, the new integrated value propositions can be developed.

Patents also can be exploited to identify new IoT (Internet of Things) product/service development opportunities by the scenarios analysis. The scenarios analysis can show potential interactions between the future users and the new IoT product/service via the specific usage of the product/service and behavior of the user under environments provided by the product/service functionality/offering. Thus, the scenarios analysis exploiting patent information can provide the new IoT product/service concept (e.g., specific benefits to the user, product design, product functionality and the technology for the product).

Investment for New IoT Innovations/Startups/M&A/Joint Venture

Patent information can provide insights regarding the state of the art of the IoT innovations. Thus, one can identify the potential further innovation R&D areas (“white space”) that can lead to new products/services development through the patent analysis. For example, in-depth analysis of smart home patents reviles that most of the patent applications are for the incremental innovations of the current market products/services. 13% of the total patent applications are for the innovations of the potential new market products/services: Adaptable Autonomous Smart Home System (The adaptable autonomous smart home system can recognize the contextual or semantic profiling of a person or place or devices (physical environment) based on sensed data by the IoT devices. The adaptable autonomous smart home system determines particular interpretation instructions (define particular IoT device control rules) that are associated with the particular physical environment and dynamically updates the control rules for changing physical environment); Self-Aware Self-Healing Smart Home System; Artificial Intelligence including Deep Learning Applications; Cloud/Big Data/SaaS; Robots; New UX for Smart Home System; Cross-industry Convergence; and Emotion-Aware Smart Home System. Patent information also can provide insights regarding a new statups to become play a leading role in the emerging IoT market (and thus, can be a good investment/M&A target) and joint venture opportunities.

New Patent Monetization Model

A strategically packaged patent portfolio is the collection of patents that the integrated value propositions of each patent of the portfolio target specific value propositions that are provided by emerging new products/services. The strategically packaged patent portfolio in alignment with the specific IoT business interests (e.g., smart home automation) can be developed using the existing patents and/or by strategically developing new patents. Development of the strategically packaged patent portfolio requires a deep understating of the IoT technologies, extensive experiences in patent analysis and development, and insights into the emerging IoT market. The strategically packaged patent portfolio can be used for monetization through patent sale, patent licensing, commercialization, spin-off, patent banking, and patent-backed financing. For detailed information, please visit http://www.slideshare.net/alexglee/best-practices-of-ip-patent-strategy-iot-internet-of-things-case-study.

Potential Patent Disputes

As we have seen in the smartphone market development, it is expected that the super-competition to preoccupy the leadership in the lucrative IoT market can lead to another round of patent wars. The post-smartphone patent wars, however, will be more extensive because of more extensive participation of players across several different industries. The post-smartphone patent wars will also be more complex because of the recent rapid change in legal environment and the learning curve from the smartphone patent wars.

To assess the potential patent disputes risk of the IoT, patent landscapes of three major IoT applications – smart home, connected car, connected health (including healthcare/fitness wearable devices) – and IoT platform connectivity are researched. Followings summarize the potential patent disputes risk for each subfield of the IoT.

Smart Home
Interesting point in the smart home patent land scape is a large number of patents owned by two startups – Allure Energy (9 %) and Ecofactor (5 %) – that are not successful in the IoT smart home market compare to their marker leader competitors such as Nest Labs and Ecobee. A large number of patents owned by commercially unsuccessful companies can be the potential patent disputes risk to the smart home companies.

Connected Car
Interesting point of the connected car patent landscape is the large number of patents owned by two active patent monetizing entities – Omega Patents and American Vehicular Sciences and a suspected entity – AutoConnect Holdings. The large number of patents owned by the patent monetizing entities is a potential patent disputes risk for the connected car industry.

Connected Health

Interesting point of the connected health patent landscape is the large number of patents owned by the active patent monetizing entitiy – Empire IP LLC, which is a potential patent disputes risk for the connected health companies. Interesting point of the personal fitness/health care devices patent landscape is the large number of patents owned by many commercially unsuccessful companies and NPEs. Another interesting point is the small number of patents owned by commercially successful companies (e.g., Under Armour).

IoT Platform Connectivity

Interesting point of the IoT platform connectivity is the large number of patents owned by many active patent monetizing entities – InterDigital, Optis Cellular Technology, Intellectual Ventures, Innovatio IP Ventures, Adaptix (Acacia), Evolved Wireless LLC, Wi-Fi One and WiLAN. The large number of patents owned by many patent monetizing entities is a potential patent disputes risk.

One can develop a strategic forecasting methodology to predict the possible emerging development of the post-smartphone patent wars and a strategic planning methodology to prepare for the emerging post-smartphone patent wars.

For detailed information, please visit http://www.slideshare.net/alexglee/postsmartphone-wearables-iot-devices-patent-wars-strategic-forecasting-methodology and http://www.slideshare.net/alexglee/postsmartphone-wearables-iot-devices-patent-wars-strategy-development.


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