Scandinavia: A patent perspective on the Internet of Things

June 22 2016

The Internet of Things (IoT) is gaining in momentum and the expected growth is paramount both in terms of the number of connected devices and regarding the size of the potential business.

Wireless technologies enabling IoT have been driven by the telecoms industry. Scandinavia has a long tradition of driving the development of telecoms, and we now see more and more Scandinavian companies taking steps towards IoT products and services.

The next generation of wireless mobile technology, 5G, is designed for IoT with requirements for low device power consumption, low latency and more capacity. The technology providers in the telecom industry behind the development of 5G have a strong position in patents. Companies such as Ericsson and Qualcomm have strong portfolios of standard essential patents (SEP) for 5G.

What we see happening now is that the telecoms industry is leaving the conventional customer-phone-operator paradigm and moving into any existing traditional business with a focus on IoT.

In one way this marriage may bring the tradition of actively utilising patents, such as in the telecom industry today, along with other patent traditions in other industries.

So, how does this affect a player that wants to enter the IoT scene? The standard wireless technologies are fairly easily accessible as long as you pay a patent licence fee to the standard owner. Ericsson has for example announced that it is establishing an industry patent licensing platform for IoT. However, the IoT applications and services utilizing the wireless standards may not be covered by the standards and might thus be protected by patents either by you or a competitor.

An opportunistic view is that IoT will bring not only new product offerings but also the possibility of getting the upper hand in patents compared to your competitors. Also if you are a new player or want to take a piece of someone's existing business, IoT patents may be a way of putting you in a good bargaining position relative to the current players.

A risk worth being aware of is whether there are already players in your business that have patent rights to the IoT products you are aiming for.

We have not yet seen whether the telecom industry will influence other industries and businesses with its patent tradition, but it is expected that patents will continue to play an important role in the telecom industry that is now moving into IoT.