Intellectual Property

Introduction

A particular challenge that may affect the development and implementation of IoT systems in commercial settings is consideration of intellectual property rights. This is primarily the case in the case of new IoT enabled products being developed for market, particularly if exporting, but also for innovations in business or engineering processes enabled by the IoT that organisation are investing large amounts of money in. Intellectual property rights are typically protected by obtaining patents and often this is considered a prerequisite to obtain funding from venture capitalists and the like. Having a patent provides leverage in business negotiations and disputes, prevents others from copying your innovation, and can provide licencing revenues.

A key reason to consider intellectual property rights is to have freedom to operate. Because IoT is new, many people and organisations world-wide are applying for patents. Organisations developing or implementing IoT system may inadvertently infringe the rights of others and huge upfront investments may be forfeited when challenged. This can be avoided by careful patent infringement searches prior to the investment phase. When patents of concern are discovered they can be carefully analysed by a patent attorney to determine if they do actually constrain your activity. If the patent does restrict your activity, it may be possible to work around the issue by obtaining a licence or coming to some other commercial arrangement.

Obtaining patents in the computer technology space is difficult and many patents, when challenged, are found to be invalid. So if you receive a notice of patent infringement, a patent lawyer should be consulted to determine if the patent is valid before caving in to any unreasonable demands.

Basics of IP

A patentable an invention must be:

• New; and
• Not be obvious to someone with knowledge and experience in the subject
• Not disclosed by publication or otherwise
• Is useful
• No prior secret commercial use

Just connecting a thing that has never been internet-enabled before is unlikely to be patentable. Rather, inventions need to be something that makes the IoT device work and is truly a new improvement in technology. 

Good IP Practices

A key focus in any innovative work is to ensure you own the patent. Ownership of the invention originates with the inventor but under common law flows to the employer when the invention was made in the normal course of their duties to the employer. It's important to have this clarified when employing contractors to support the innovative work, particularly if this includes the provision of software and systems that involve the integration of systems from multiple suppliers. Non-disclosure agreements should be standard in any discussions with third parties. 

In practice IoT product developers need to make a decision whether to protect their work through secrecy or to apply for a patent. Secrecy is paramount in any case, during the period leading up to a patent application, to ensure it remains valid. However, it may be commercially sensible to simply maintain the secrecy of the invention, particularly given that the costs of obtaining patents are not inconsiderable, particularly if applying world-wide. 

Sources: Information on this page was primarily obtained from the following sources:

• A webinar titled Dodging Dragons and Catching Unicorns by Justin Blows, Phoenix Intellectual Property