With the market for internet-of-things devices expected to grow to $1.1 trillion by 2026 and the IoT healthcare market to hit $14 billion by 2024, many businesses will focus more and more on developing and protecting their connected product ranges over the next few years.
That is not a surprising statistic when we consider that virtually every company is looking at the benefits of developing connected products. As well as connected car and toaster businesses, a large medical devices company spoke to Managing IP last year about a series of connected orthopaedic implants it was creating.
It is also unsurprising then that these stakeholders are adopting new practices, developing better internal expertise and relying more heavily on external counsel to overcome the prosecution problems that have emerged because of the convergence of technologies in these products.
In-house sources at commercialisation, consumer appliances, telecoms and energy companies point out that it can be difficult for attorneys to get IoT applications over obviousness hurdles because many connected devices are based on existing prior art and have been developed and changed to connect to other devices.
Patent examiners will often fail to see the inventive step in devices such as connected fridges, orthopaedic implants or gas meters, arguing that it should be obvious to integrate telecoms and software tech into these already-existing inventions.
And it can be difficult for businesses to identify and explain why inventions like these are not necessarily obvious.
“These inventions are often a mix of technologies, and that fact presents challenges,” says Jeremy Holmes, head of IP at intellectual property investment company IP Group in London. “If examiners see that your patent applications are for a mixture of things, they will pull out a piece of prior art for each component part and say: ‘Well, it is blinking obvious to put this together.
“And a lot of the time you’re stuck between the decision to try and protect something with a short and possibly over-vague description, and run the risk of clarity or enablement issues, or go into so much detail that it would be incredibly easy for someone to take all the ideas and design around it,” he adds.
The fact that these inventions are a mix of technologies also means that in-house attorneys must grapple with the prosecution hurdles for each individual component of the connected product. If the invention runs on a machine-learning algorithm and contains a system and method for displaying an image stream, for example, attorneys would need to show that both those components are patent eligible.
Under European law, for example, attorneys might need to argue that these components are not purely mathematical methods or computer programs or presentations of information, as set out in Article 52 of the European Patent Convention. In the US, they may need to show that components do not simply constitute abstract ideas (Section 101 of the US Code).
These are arguments that most patent attorneys are proficient in making, of course. But when these hurdles all come together in one application, said applications require a lot more work and often a higher level of expertise.
“We are on the razor edge of patentability with these inventions because all the exclusions set out in Article 52 can come together in one application, and you cannot overcome them by posing just one argument,” says Beat Weibel, chief IP counsel and group senior vice president at Siemens in Munich. “You need more arguments and brainpower to get around these hurdles, but we use the same methodologies and arguments.
“That is the real problem in IoT filing – everything comes together.” He adds that Siemens usually does not have a problem with showing technicality because its inventions are clearly technical.
Growing knowledgeSome businesses have reacted to this challenge of prosecuting important connected products with multiple hurdles by training their in-house attorneys.
“You need to train up attorneys to consider the inevitable rejections at the beginning of the process so they can avoid them earlier and better use the examples known in case law,” says Weibel.
He adds that Siemens trained its attorneys in the fields of computer-implemented inventions, blockchain and artificial intelligence technologies so that they have the necessary technical knowledge to handle each component in an IoT product.
The business also taught its attorneys not to claim plainly for an invention, but to go through the steps of trying to understand why something is important and what business model it serves. Once the attorney has that understanding, they can transfer it to the necessary technical features needed to achieve a result.
“That is a far more demanding process for the patent attorneys,” says Weibel. “They cannot just go to the inventor and listen to what the invention is – they must understand what and how important it is and what key features enable it.”
The vice president of IP at a telecommunications company says her firm’s approach was to take some of the business’s most experienced attorneys and put them into a small work group and have them look at the kind of rejections they were facing for IoT product applications.
The team analysed the major concerns expressed in examination reports and debated how they might have drafted the application better – and whether there was an argument against the obviousness or eligibility rejection or whether this particular invention was not something they should have filed for in the first place.
Attorneys are also encouraged to contact patent offices to get their view on why an invention was deemed ineligible or obvious. “Sometimes it is easy for a patent office to say something is obvious and then leave us to explain why it is not. We now see less of the obviousness aspects being raised but more substantial conversations between the company and the offices,” says the vice president of IP.
“By exchanging with them, and it is not just our business doing it, we get a better understanding of what is still patentable and to better draft and overcome the various hurdles.”
Some businesses that file fewer IoT applications than perhaps telecoms or appliance companies, however, have chosen to rely on a combination of external counsel and in-house expertise. Charles Clark, director of IP at energy company Centrica in the UK, says external counsel are enormously helpful with IoT hurdles and do an excellent job of conducting prior art searches.
But the business also has an in-house attorney who is “enormously” experienced in computer-implemented inventions and “who is good at asking the right questions and getting everything needed to make an assessment of whether it is worth prosecuting a patent application for a particular connected product”.
He adds that it will be more important for attorneys from many more industries to consider and learn from the challenges of IoT prosecution in the future.
“Software is going to rule the world and it is becoming more relevant in patent applications – and in my field pretty much everything is erring towards computer-implemented inventions. And that is true of most industries – so whether attorneys are in biotech or mechanical engineering, there will be something software-related there.”
New practicesOf course, with this training comes new ways of doing things.
An IP manager at a consumer appliance manufacturer in Australia says his company’s approach to the problem has been to focus on the unmet consumer-facing problem specific to the field into which the IoT technology is implemented.
From there, attorneys can establish contextually unique factors in the specification relative to the commercial objective for the invention – i.e. keep scope consistent with the intended value proposition and understand early on that the novel material aspects of the invention that are implemented in the final product should be considered non-commercially limiting as fallbacks throughout prosecution.
“I’m not going to suggest this would work for most, let alone everyone,” he says. “It’s the concession we’ve made, it moderates executive expectations relative to the IoT grant threshold, and if prosecution is eventually unsuccessful, we still gain the benefit that our intent to protect and exclude is made known to competitors.”
Thomas Buchholz, senior patent counsel for BSH Home Appliances Group in Munich, adds that to demonstrate inventive step, it is not enough to show use of a known internet technology in a different domain. The connected object must have a problem that has been solved.
He says that it is also important to teach attorneys the difference between solving a problem and circumventing it because there is a fine line between the two.
For example, in the case of claims directed to a technical implementation of a non-technical method or scheme – in particular of a business method or set of game rules – a modification to the underlying non-technical method or scheme aimed at circumventing a technical problem is not considered to make a technical contribution over the prior art.
When choosing the right prior art for IoT inventions, attorneys should choose the closest prior art in normal situations. The closest prior art should be able to disclose, in a single reference, the combination of features that constitutes the most promising starting point for a development leading to the invention.
Buchholz says: “In selecting the closest prior art, the first consideration is that it should be directed to a similar purpose or effect as the invention, or at least belong to the same or a closely related technical field as the claimed invention. In practice, the closest prior art is generally that which corresponds to a similar use and requires the minimum number of structural and functional modifications to arrive at the claimed invention.”
IoT prosecution is often a tricky thing to manage – but it’s going to be more important for lots more businesses in the near future. Connectivity is being incorporated into new inventions all the time, which is why the IoT markets are projected to become so large.
And if businesses want to take reap competitive advantage in those markets, they should start learning how to protect their inventions – and convince examiners that they’re not obvious or ineligible – sooner rather than later.
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