Finding IoT patents that are not worthless and weak

Is that an IoT patent application I see pinned to your desktop? A new analysis by technology intellectual property legal experts LexInnova confirms IoT patents are being generated rapidly – and looks at which classes of patents are likely to be worth something in acquisition or litigation.

Proving that just about anyone with a good idea and a legal team who can research precedents and format an application properly can get one, my one patent pertains to the Stinger shoulder-launched surface-to-air missile. The guys who held the real patents on Stinger told me at that start of the project we probably couldn’t do what we ended up doing. We reprogrammed the missile and added a bit of external hardware to pull serial telemetry data off the programming pins without messing up tracking, a miracle considering the production code relied on timing around strategically placed no-ops in assembler.

Even so, my patent plus a $5 bill gets me a Starbucks Vanilla Bean Creme. It’s one of those low-strength patents that never got near production, issued by a company I never worked for (it took 3 years from application to approval, less than the time it took Hughes Aircraft to acquire that division of General Dynamics) that no longer exists bought by someone else (Raytheon) because of quite a few high-strength patents. People close to the technology understand, but how do observers and investors tell if a patent is any good?

LexInnova uses a sophisticated algorithm derived from a paper called “Valuable Patents” by Allison et al, with proprietary enhancements in classification and scoring. Their model claims 97% accuracy of scoring litigation-worthy patents in a statistically large portfolio. With the IoT gaining speed, patent activity has picked up. LexInnova has a new IoT report which goes back to 1997 to find 12 IoT patents, gradually increasing to 714 in 2010, then the hockey-stick growth starts to 6810 in 2015.

We talked about the mobile phone and SoC vendors joining in on the IoT craze in Chapter 10 of “Mobile Unleashed”, and the new patent data confirms it. The raw data shows the heavy hitters are Qualcomm and Intel, and a number of Chinese firms break into the top 20.

From there, the analysis gets interesting. LexInnova breaks down the patents into a taxonomy by category, then heat-maps those categories where they expect licensing activity to be high. Bouncing the heat map off the categories raw counts yields a different picture. Note where the activity is on this chart: information retrieval, wired communication protocols (gateway and infrastructure tiers), and image processing are near the top.

Projecting that back onto the vendors reveals that Qualcomm has the biggest number of “high-strength” patents, followed by LG and Microsoft. Huawei got an honorable mention, with average patent strength behind only Microsoft, but only a few high-strength patents. Sony might be the surprise name on that list, and with their purchase of Altair Semiconductor they could gain strength.

I do have a few questions. Cisco shows up in the top 10 of high-strength, but is entirely missing from another scoring diagram that would have supported that. I also have to wonder which Nokia we’re talking about here, if some or all of those patents are now assigned to Microsoft or if they apply to infrastructure. Samsung is not as strong as one would expect, and Apple’s total absence among leaders is a bit suspect.

There is another firm tracking IoT patent filings – Zacco – and they find that just on recent filing data, Huawei, Qualcomm, and ZTE hold the top spots. I like what LexInnova is trying to do with a longer sample, a weighted score, and classifying filings by category. This is a long game, only time will tell how accurate the data is.

The full LexInnova report is online (simple email registration); all images above are courtesy LexInnova:

INTERNET OF THINGS – 2016: Patents and Perspectives | LexInnova

One thing is clear: Qualcomm is working hard to build a licensable IP base around the IoT, and is among the leaders. Our readers had concerns about if Qualcomm could maintain its historic royalty rates, and my response was they are creating IoT IP to offset declines in mobile IP. This is some of the first data backing up that claim.

Haven’t read “Mobile Unleashed” yet? Drop and give me 20.