Developments in Internet of Things (IoT) is thought to trigger a Fourth Industrial Revolution (4IR) during the next decade. It is estimated that by 2025 a staggering 25-30 billion home and work devices will be connected to the IoT. Equipped with sensors and software, enabling the connected devices to operate autonomously based on data collected or exchanged with each other, it is further thought that combining these devices with cloud computing, cognitive computing, artificial intelligence and other technologies, will make automation of entire business processes become possible, including repetitive intellectual tasks previously performed by human beings.
A few years back the European Patent Office (EPO) launched a study on development of patent filings (4IR patents) at the EPO relating to autonomous objects, which were further classified into 3 sectors each covering multiple technologies: (a) Core technologies covering hardware, software and connectivity, enabling the making of connected smart devices; (b) Enabling technologies covering analytics, security, artificial intelligence, user interfaces etc. enabling combining connected objects; and (c) Applications covering for example home, personal, manufacturing use enabling exploitation of the connected objects.
The EPO study revealed that from 2013 to 2016 the number of 4IR Patents in EU grew by a staggering 54% compared to an approximate average of 7.5% or patent applications in general. In 2015 and 2016 more than 5000 4IR patent application were filed per year. Companies in EU, US and Japan are leading the race, with South Korea and China catching up and only 20 companies accounted for almost half (42%) of the patent filings – more within Core technologies and less within Applications.
Patents are national exclusive rights, barring everyone else than the patent proprietor or its licensees from commercially use a patented technology. Without permission from the patent proprietor a party infringing a patent is liable to lawsuits, injunctions (court order to cease and desist activities) and damages. Therefore, it is essential for a company before commercially launching a product or service on the market to investigate its Freedom to Operate and to adress risks of infringing third party patents. Freedom to operate evaluations are particularly relevant in overcrowded technology fields like 4IR. Even if the company is a SME, which do not plan to launch products itself, but aim at partnering or even at being acquired, any potential partner will prior to any deal perform a due diligence process assessing the freedom to operate and will walk away if risk of infringement are too high. In that respect patents makes or breaks businesses and all tech companies better brace up and prepare for the challenge.