Internet of Things (IoT) Strategic Patent Development 4Q 2015

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©2015 TechIPm, LLC All Rights Reserved http://www.techipm.com/
Internet of Things (IoT) Strategic Patent Development 4Q 2015
Alex G. Lee (alexglee@techipm.com)
https://www.linkedin.com/today/author/2853055
Contents:
1. New Patent Development Opportunity Analysis
2. New Patent Preparation & Prosecution Strategy
3. Strategic Patent Development Exploiting Existing Patents

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1. New PatentDevelopment Opportunity Analysis
White Space Analysis
One can identify new patent development opportunity (“white space”)that can lead to new product/service
development through the patent landscape analysis. Following illustrates an example patent landscape analysis for
the IoT smart home applications.
Many high tech business leaders are now competing in the IoT smart home market by providing innovative
products/services suchas Samsung SmartThings and Apple HomeKit. Patent information can provide insights
regarding the state of the art of the IoT innovations for smart home applications suchas home automation,
energy/utility management, home security, lighting system and safety monitoring (e.g., hazard detecting, elderly
care). To find the white spaces in the IoT smart home applications, more than 1000 published patent applications
and issued patents in the USPTO that are related to the smart home applications are reviewed. More 400 patent
applications are selected as the key patents for the IoT smart home applications. In number of patent applications,
Google (including Nest Lab) and Samsung Electronics dominate the patent applications (nearly 30% of the total
patent applications among more than 70 patent owners). Samsung Electronics patent application is highly focused
on the home automation. Google patent application is focused on the home automation energy/utility management
and safety monitoring.

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Following figure shows the patent landscape of the IoT smart home applications. As can be seen in the figure, the
home automation is clouded by significant number of patent applications owned by many market leaders such as
Samsung Electronics, LG Electronics and General Electric. The energy/utility management is also clouded by a
large number of patent applications owned by several key market leaders such as Google and Honeywell. In-depth
analysis of each patent reviles that most of the patent applications are for the incremental innovations of the current
market products/services. Only 13% of the total patent applications are for the innovations of the potential new
innovative products/services: Adaptable Autonomous Smart Home System (The adaptable autonomous smart
home system can recognize the contextual or semantic profiling of a personor place or devices (physical
environment) based on sensed data by the IoT devices. The adaptable autonomous smart home system determines
particular interpretation instructions (define particular IoT device control rules) that are associated with the
particular physical environment and dynamically updates the control rules for changing physical environment);
Self-Aware Self-Healing Smart Home System; Artificial Intelligence including Deep Learning Applications;
Cloud/Big Data/SaaS; Robots;New UX for Smart Home System; Cross-industry Convergence; and Emotion-
Aware Smart Home System.

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ScenariosAnalysis
Specific patent development subject matters that can cover the new IoT products/services further can be found
from scenarios analysis. The scenarios analysis can show potential interactions between the potential users and the
new IoT products/services via the specific usage of the products/services and behavior of the user under
environments provided by the products functionality/services offerings. Thus, the scenarios analysis can provide
the specific patent development subject matters that cover the new IoT products/services concepts (e.g., specific
benefits to the user, products/services design, and the technology for the products/services). Following illustrates
an example scenarios analysis for the IoT connected car applications.
On her way to nearby shopping mall, Janet hears a voice massage that she needs to exit at the next to buy milk. The
onboard screen in her car shows a map for nearby shops with milk price if a shop is on sale. When Janet dozes off
at the wheel, the automated vehicle monitoring system changes her car to a self-driving mode. As Janet drives her
car at 75 mph at 55 mph speed limit highway, her car smart control system automatically slows down. About 5
miles before the shopping mall, her car slows down to a complete stop because her car receives an accident notice
from a car drives in the oppositedirection. About 3 miles before the shopping mall, Janet hears a traffic congestion
voice massage near the shopping mall exit. The onboard screen in her car shows a map for alternative route to the
shopping mall. As Janet approaches the shopping mall, smart LED lights detects available parking spaces, then
directs her to them.

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For additional example scenarios analysis for the IoT applications (e.g., connected healthcare), please see Internet
of Things 2020 Scenarios Based on Patents.

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2. New PatentPreparation& ProsecutionStrategy
Prior Arts Search
Even though the IoT is getting a huge attention recently, the conceptof interconnected devices and connecting
billions of devices to the internet in the IoT is not new and has been under development for over 10 years. Thus, a
large number of related non-patent prior arts including research papers and books can be existed. Therefore,
intensive search of non-patent prior arts is needed for preparing the IoT patent. US20150019710 illustrates a good
example case that intensive search of non-patent prior arts is required. US20150019710 claims a method of
maintaining interoperability amongst IoT devices connected via an IoT integration platform. The key elements of
the claim 1 at issue are the interoperable control rule based on the semantic label associated with a user's IoT
device. The USPTO rejected the claim 1 under the AIA 102(b) as being anticipated by a non-patent prior art
regarding the semantic interoperability on the web. Semantic interoperability enables exchange of data among
different web system. The inventor argued that the semantic label in the non-patent prior associated with a user's
IoT device and amended claim to clarify the distinguished aspects of the claim form the prior art. However, the
USPTO rejected the claim again in the final rejection based on newly founded non-patent prior art that explicitly
mentions the IoT device in the disclosure.

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Claim Drafting for Maximum Quality& Value
When the IoT patent claims are drafted, several factors that can make the patent high quality and value should be
considered. The factors are (1) claim scopeand broadness, (2) value propositions of a claim’s novelty point (non-
obvious inventive departure from the prior arts), (3) claim mix (degree to which different kind of statutory claim
types (e.g. apparatus, process, manufactures, composition) are used in a patent), (4) claim diversity (degree to
which different kind of claim formats (e.g. means-plus-function claim), terminology, arrangement in a given
statutory claim type (e.g. number or order of claim elements) are used in a patent) and (5) claim setting (degree to
which different kind of commercially significant settings (e.g. component/system or transmitter/receiver) are used
in a patent). For details regarding the claim mix, claim diversity and claim setting, please consult the books
“Invention Analysis and Claiming” and “True Patent Value.”
The features to be considered in the claim drafting to get the high quality and value patents with the optimal quality
to cost(efforts and time in addition to monetary cost)ratio can be decided exploiting the insights for
products/services that is going to be covered by the patent (e.g. attributes of a product/servicethat valued most by
customers), the patent landscape to figure out the competitors’ patents (e.g. whether design around is required to
avoid infringing competitors’ patents) and internal patenting process (including available patent budget). For
example, if a patent is going to use for excluding the competitors, the key features to be considered in the claim
drafting will be the claim diversity (to avoid potential infringement loophole) and claim mix (to provide protection
against invalidation).

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The bestpractice in the IoT patent claims drafting is the Qualcomm patents for the IoT connectivity. Total of 273
patents issued in the USPTO for the IoT connectivity are reviewed. Following table summarizes the assessment.

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Claim Drafting & AmendmentunderPost-Alice101 EligibilityTest
The basic building blocks of the IoT are devices that can sense/recognize their surrounding environments and
communicate with other devices, connecting/communicating network medium/infrastructure that can interconnect
devices and connect devices to the internet, back-end IT systems that can process information (data) obtained by
the IoT devices (e.g. cloud computing/big data analytics) and provide the value added services exploiting the
information. Therefore, a part or whole of data aggregation, data transfer, data correlation, data analysis and
services based on the data are the essential elements of the IoT inventions, and thus, the elements of the IoT patent
claims. Consequently, many of IoT patents can be identified as abstract ideas because they are the certain methods
of organizing human activities/mental process or fundamental economic practices or mathematical
relationships/formulas unless the IoT patent claims are drafted carefully to pass the post-Alice 101 patent eligibility
test.
For example, claim 1 in US20140012945 claimed: A method of automatically detecting issues and facilitating the
transmission of alert messages in a home network consisting of a plurality of consumer electronic devices coupled
to a service node, the method comprising: storing information regarding home entities in an inventory database,
the entities comprising the household, one or more users within the household, devices in the household,
applications running on the devices, and a community of which the household is included; defining usage classes
for each entity, the usage classes denoting a primary function associated with an entity, and comprising networking,

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productivity, and entertainment; assigning an index value to each usage class for each entity, the index value
comprising an integer value within a fixed range, and reflecting a relative level of satisfaction associated with the
entity for each respective usage class; monitoring data regarding usage trends, performance characteristics, and
external variables associated with the entities; modifying one or more of the index values based on the monitored
data; and facilitating the transmission of messages regarding services or products related to the entities of the home
from one or more parties, wherein the messages are conformed to index values.
This claim was rejected under 101 by the USPTO because the claim is directed towards the abstract idea: storing
data regarding entities, classifying entities, assigning index values, monitoring usage data, modifying the index
values and transmitting messages regarding services or products related to the entities based on index values. Thus,
simply transferring the data through the networks or processed the data for providing services will not sufficient to
transform the nature of the claimed invention into a patent-eligible claim. Additional elements that are sufficient to
amount to significantly more than the abstract idea are needed. Potential claim elements that can overcome the
reject may be the claim elements that embed/link to a specific machine/article (not a generic purposecomputer)
(e.g. medical device, thermostat, application specific microprocessor/controller) or that either recite a specific
series of steps that resulted in a departure from a human activity or transform a particular thing to a different thing
or improve the technology.

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A possible amendment to the claim could be: A computer implemented method for transforming data regarding
usage trends of home entities into messages regarding services or products related to the entities (of automatically
detecting issues and facilitating the transmission of alert messages in a home network consisting of a plurality of
consumer electronic devices coupled to a service node), the method comprising: storing information regarding
home entities in an inventory database of a computing device in a server or a data center, the entities comprising
the household, one or more users within the household, devices in the household, applications running on the
devices, and a community of which the household is included; defining usage classes for each entity, the usage
classes denoting a primary function associated with the (an) entity, and comprising networking, productivity, and
entertainment; assigning an index value to each usage class for each entity, the index value comprising an integer
value within a fixed range, and reflecting a relative level of satisfaction associated with the entity for each
respective usage class; monitoring by the computing device in the server or the data center data regarding usage
trends, performance characteristics, and external variables associated with the entities; modifying by the
computing device in the server or the data center one or more of the index values based on the monitored data; and
facilitating the transmission of messages sent from the computing device in the server or the data center regarding
services or products related to the entities of the home from one or more parties, wherein the messages are
conformed to index values.
As an another example, claim 1 in US20140012800 claimed: An apparatus for providing an application for
processing big data, comprising: a setting unit configured to set data collection and analytic levels and a result

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screen for each of a plurality of tenants; a unified information access unit configured to collect data based on the
settings of the setting unit, and to analyze the collected data; a metadata management unit configured to manage
metadata about the data collected based on the settings of the setting unit; and a database unit configured to store
the collected data and the analyzed data.
This claim was rejected under 101 by the USPTO because the claim is directed towards the abstract idea (software
per se). A possible amendment to the claim could be: An apparatus for providing an application for processing by
way of one or more processors big data, comprising: a setting unit configured to set data collection and analytic
levels and a result screen for each of a plurality of tenants; a unified information access unit configured to collect
data based on the settings of the setting unit, and to analyze the collected data; a metadata management unit
configured to manage by way of one or more processors metadata about the data collected based on the settings of
the setting unit; and a database unit configured to store the collected data and the analyzed data.
PatentDisclosure Drafting & Prosecution in AlignmentwithBusinessStrategy
The IoT patents should supportfuture development of the IoT businesses and commercial implementations of the
IoT innovations. The disclosures of the IoT patent can be considered as a system that is consistof the basic
building blocks of the IoT as a subsystem: (1) devices that can sense/recognize their surrounding environments and
communicate with other devices, (2) connecting/communicating network medium/infrastructure that can

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interconnect devices and connect devices to the internet, (3) back-end IT systems that can processinformation
(data) obtained by the IoT devices (e.g. cloud computing/big data analytics) and (4) provide the value added
services exploiting the information. Then, the system as a whole and each basic building block as a subsystemcan
be construed in the disclosures to supportfuture development of IoT businesses and commercial implementations
of the IoT innovations.
StrategicIoT PatentDevelopment Best Practices
The bestpractice in strategic IoT patent development is the Allure Energy patents for the IoT smart home
applications. Allure Energy has developed 22 US family patents for the smart home energy management up to now
starting from two U.S. Provisional Patent Applications, Ser. No. 61/255,678 entitled a “Proximity Based Home
Energy Management System and Method”, filed on Oct. 28, 2009 and 61/235,798 entitled an “Alternative Energy
Asset Management System with Intelligent Data Framework Capabilities, filed on Aug. 21, 2009. Allure Energy
exploited strategic patent drafting and prosecution (continuation practices).
Allure Energy initially drafted the disclosures of a few co-pending patent applications very broadly in anticipation
of future business development. Then, Allure Energy prosecuted family patents to capture many commercial
implementations as the market evolves. Allure Energy is still developing more family patents to capture most
recent commercial implementations (e.g., IoT device controlusing Bluetooth connection, exploiting smartphone
for the IoT device control, autonomous adaptable energy management system).

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Significant number of forward citations shows the high quality of the family patents. Especially, many patents of
most key industry players including Google (Nest Lab), GE and Honeywell in the smart energy management
heavily cited Allure Energy patents. Forexample, more than 30 GE patents cited the Allure Energy patent
US8024073. Five patents (US8442695, US8457797, US8509954, US8571518 and US8626344) exploited to sue
Google and Honeywell for patent infringement. A huge number of claims of the family patents make it very
difficult to invalidate the family patents through PTAB IPR process.
Another best practice in strategic IoT patent development is the Flextronics AP LLC patents for the IoT connected
car applications. Flextronics AP LLC has developed total of 79 family patents including 11 issued US family
patents from seven U.S. Provisional Patent Applications. Flextronics AP LLC exploited strategic patent drafting
and prosecution(continuation practices).

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3. Strategic Patent DevelopmentExploiting Existing Patents
Well-tailored value creation methodology combined with patent prosecution strategy can develop new patent
portfolios for maximum ROI from existing patents. Many patent applications and newly issued patents can be
further developed for creating new values by amending and creating claims and generating family patents to
encompass emerging technology and products/services trends, market demands, and strategic exploitation goals
(e.g., cross-licensing, monetization etc. Even though the IoT is getting a huge attention recently, the conceptof
interconnected devices and connecting billions of devices to the internet in the IoT is not new and has been under
development for over 10 years. Thus, there may be a large number of patents (that were not intended for the
specific IoT applications at the time of invention) that can be exploited for developing new IoT patents supporting
current and future IoT business goals.
For example, Mitsubishi Electric Research Laboratories (MERL) is the North American arm of the corporateR&D
organization of the Mitsubishi Electric Corporation. MERL conducts application motivated basic research and
advanced development. Total of 168 MERL patents filed within 3 years are reviewed for finding new IoT patent
development opportunities. Many patent applications in the field of Wireless & Optical Communications (IoT
connectivity), Power Distribution System (smart grids), Vehicle Control/Information System (connected cars),
Electronic Devices (IoT sensors)and Building Automation (smart home) are found to be the good candidates for
new IoT patent development.

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The good candidates for new IoT patent development can be categorized as application specific and standard
relevant patents for further development.
For the application specific IoT patents, the selected patents can be analyzed to find candidates for commercial
essential patents (essential for commercial product/service implementation), patents for market platforms
(dominant designs) and patents for disruptive technologies (for future market generation potential). Existing claims
can be amended and additional claims can be constructed to capture the unclaimed embodiments in the candidates’
detail descriptions to reinforce the protectability (against invalidation), enforceability (against potential
infringement), and marketability (for monetization, new products/services development etc.).
For the standard relevant IoT patents (e.g., IoT platform connectivity), the selected patents can be analyzed to find
candidates for the IoT standard essential patents (SEPs)and development as the IoT SEPs with respectto the
specific standards. Forthe IoT SEPs candidates, the claim-standard specification mapping can be performed to
generate EoU claim charts. For the development candidates as SEPs, the model claims can be constructed which
can make a candidate as a IoT SEP with respect to a specific standard. Additional claims can be constructed to
capture the unclaimed embodiments in the candidates’ detail descriptions.

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Alex G. Lee is a principal IP Strategist with TechIPm LLC, an IP strategy consulting firm based in Boston. He is
an emerging technology (Electronics, Computer, IT, Telecom, IoT) patent expert with extensive experience in
technology R&D & management, business development, strategy consulting, and intellectual property management
both in the US and S. Korea. He consulted Fortune 500 companies, patent monetization firms, law firms,
investment firms and research institutions regarding the strategy for patents acquisition, investment, prosecution,
development, litigation, monetization, and commercialization.
He earned Ph.D. in physics from the Johns Hopkins University and J.D. from the Suffolk University Law School.
He registered to practice before the US Patent and Trademark Office. He is a certified licensing professional (CLP).
He passed New State York Bar Exam. He is a member of IEEE, AIPLA, LES and ABA.

Internet of Things (IoT) Strategic Patent Development 4Q 2015

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