Thesis defence about “Analysis of the changing patent infringement risk situation in a digital transformation scenario” by Leonhard Brader at the MIPLM 2020

1. CEIPI
Master of Intellectual Property Law and Management
ANALYSIS OF A CHANGING PATENT INFRINGEMENT RISK SITUATION IN A
DIGITAL TRANSFORMATION SCENARIO
Master Thesis
submitted by Leonhard Brader
© 2020 CEIPI MIPLM, Strasbourg

2. Content
• Patent infringement
• Internet of Things (IoT)
• Patent infringement risk analysis
• Analysis Part I
• Analysis Part II
• Applicability of Analysis
• Conclusion

3. Patent infringement
• Patent law is territorial law. International harmonisations as TRIPS, EPC etc.
• Focus on exemplaric regulations from TRIPS EPC PatG
• Patentable subjects?
• in all fields of technology,
• provided that they are new,
• involve an inventive step
• are capable of industrial application. (TRIPS Art 27, EPC Art 52)
• Term of patent protection: period of twenty years counted from the filing date (TRIPS Art 33)
All technical industry products, that were new and inventive the last 20 years can possibly be patent
protected, today.
• Right of the patent owner
• prevent third parties from the acts of: making, using, offering for sale, selling, or importing (TRIPS Art 28
(1))
• Claims of patent owner against infringer are typically (PatG):
• Stop infringement
• Get damages if infringement is commmited careless or intentional (PatG Art 139)
• Exclusive right to license
Sources: World Trade Organisation, TRIPS Trade-Related Aspects of Intellectual Property Rights
European patetn convention EPC
Deutsches Patentgesetz PatG

4. Patent infringement - Infringers perspective
• Patent infringement with or without awareness
• In worst case stopping infringement
• stop making, using, offering for sale, selling, or importing of features or products
• of using the processes, potentially relevant in value creation (TRIPS Art 28 (1))
• Potentially damages or a subsequent license contract
• Infringer strong dependent on patent owner, wich has the exclusive right to
give a license for a patent (TRIPS Art 28 (2))
• Except FRAND -> costs
• Except Compulsory license
Sources: World Trade Organisation, TRIPS Trade-Related Aspects of Intellectual Property Rights

5. Internet of Things (IoT)
• IoT enabler of indsutry 4.0 and digitalisation of products next to Big
Data, Cloud computing, Aritificial intelligence etc.
• IoT enables real world objects with speech, vision, hearing, smell,
and touch, so inanimate things can perform jobs more accurately and
responsively collaboratively and with learning
-> enables products to provide additional customer benefits
• IoT architecture
• Physical layer, perception layer, transmission layer, computation layer and
application layer
• Interaction of technologies in different layers
Source: Amy J.C. Trappey et al. A review of essential standards and patent landscapes for the Internet of Things: A key enabler for Industry 4.0 2017

6. Internet of Things (IoT)
• Application Layer
• Computation Layer
• Transmission Layer
• Perception Layer
• Physical Layer
Source: Wurzer MIPLM 2020 Strategy Development
Amy J.C. Trappey et al. A review of essential standards and patent landscapes for the Internet of Things: A key enabler for Industry 4.0 2017

7. Internet of Things (IoT)
Vorwerk Thermomix TM31
• the last „offline“ Version
• launched 2004
Vorwerk Thermomix TM6 physical product
• physical product
• Wifi Interface
• Touch display,
• launched 2019
On the first view a quite similar physical product, but….
Source: Vorwerk website
Internet

8. Internet of Things (IoT)
• Additional customer benefits and differentiation criteria in TM6
• Provided by additional digital functionalities
• Provided by technologies of the additional layers
Source: Vorwerk product video, youtube

9. Patent infringement risk analysis
• Does the digital transformation to an IoT solution change the patent
infringement risk situation for the providing company?
• Exemplary analysis of Thermomix
• Why is Thermomix suitable as analysis example?
• Thermomix represents an Internet of Things concept -> layer model applicable
• Information about point in time of digital transformation of Thermomix
available
• Differentiation criteria mainly outside the physical product (-> patented by
Vorwerk)
• Patents regarding physical exist before digital transformation
Source: Wurzer et al. Vorwerk Thermomix Case Study

10. Patent infringement risk analysis
• Methodology
• Part I
• Comparison of the Patentportfolio of Vorwerk before and after 2004
• Identification of additional patented technologies of Vorwerk
• Mapping of additional technologies to Interent of Things layers
• Verification of Thermomix relevance with example patents
• Part II
• Confirmation of technology relevance with citation analysis
• Analysis of regions covering additional technologies
• Size of additional technology fields
• Filing dynamic in additional technology fields
• Owner structue in additional technology fields

11. Patent infringement risk analysis
• Strasbourg 1971
• Technological classification of patents
• Assigned by patent office
• Multiple assignment per patent possible
• Folder structure
Source: Espacent, European patent office
• IPC Classification

12. Analysis Part I - Dataset
Data set definition
Search Database Questel Orbit
Search Date 20.08.2020
Assignee Vorwerk
Keywords in Fulltext* Kitchen or cook* or recipe
Publication date Before and after 01.01.2004

13. Analysis Part I – Portfolio comparison
0
5
10
15
20
25
A47J H02K A47L A23G B02C B05B B22D B65H D06F F04D F24C G01C G01G
Thermomix patent potfolio before 01.01.2004
KITCHEN EQUIPMENT; COFFEEMILLS; SPICEMILLS; APPARATUSFORMAKINGBEVERAGES
Dynamoelectricmachines
Noise of dataset: DOMESTIC WASHING OR SUCTION CLEANERS IN GENERAL

14. Analysis Part I – Portfolio comparison
IPC class Denomination of the IPC class
Assigned number of
patents in class
A47J
KITCHEN EQUIPMENT; COFFEE MILLS; SPICE MILLS; APPARATUS FOR MAKING
BEVERAGES
23
H02K Dynamo electric machines 6
A47L DOMESTIC WASHING OR SUCTION CLEANERS IN GENERAL noise
A23G
COCOA; COCOA PRODUCTS, e.g. CHOCOLATE; SUBSTITUTES FOR COCOA OR
COCOA PRODUCTS; CONFECTIONERY; CHEWING GUM; ICE-CREAM;
PREPARATION THEREOF
1
B02C CRUSHING, PULVERISING, OR DISINTEGRATING IN GENERAL; MILLING GRAIN 1
B05B SPRAYING APPARATUS; ATOMISING APPARATUS; NOZZLES 1
B22D
CASTING OF METALS; CASTING OF OTHER SUBSTANCES BY THE SAME PROCESSES
OR DEVICES
1
B65H HANDLING THIN OR FILAMENTARY MATERIAL, e.g. SHEETS, WEBS, CABLES 1
D06F LAUNDERING, DRYING, IRONING, PRESSING OR FOLDING TEXTILE ARTICLES noise
F04D NON-POSITIVE-DISPLACEMENT PUMPS 1
F24C
OTHER DOMESTIC STOVES OR RANGES; DETAILS OF DOMESTIC STOVES OR
RANGES, OF GENERAL APPLICATION
2
G01C
MEASURING DISTANCES, LEVELS OR BEARINGS; SURVEYING; NAVIGATION;
GYROSCOPIC INSTRUMENTS; PHOTOGRAMMETRY OR VIDEOGRAMMETRY
1
G01G WEIGHING 2
G01K
MEASURING TEMPERATURE; MEASURING QUANTITY OF HEAT; THERMALLY-
SENSITIVE ELEMENTS NOT OTHERWISE PROVIDED FOR
1

15. Analysis Part I – Portfolio comparison
Assignable to additional IoT layers
Noise of Dataset, DOMESTIC WASHING OR SUCTION CLEANERS IN GENERAL
Assignable to physical layers ?

16. Analysis Part I – IoT layer assignment
IPC class Name of the class
Assigned IoT
layer
A47J
KITCHEN EQUIPMENT; COFFEE MILLS; SPICE
MILLS; APPARATUS FOR MAKING BEVERAGES
Physical Layer
B01F
MIXING, e.g. DISSOLVING, EMULSIFYING,
DISPERSING
H05B
ELECTRIC HEATING; ELECTRIC LIGHTING NOT
OTHERWISE PROVIDED FOR
A23L
FOODS, FOODSTUFFS, OR NON-ALCOHOLIC
BEVERAGES, THEIR PREPARATION OR
TREATMENT,
F16C
SHAFTS; FLEXIBLE SHAFTS; MECHANICAL MEANS
FOR TRANSMITTING MOVEMENT IN A FLEXIBLE
SHEATHING; ELEMENTS OF CRANKSHAFT
MECHANISMS; PIVOTS; PIVOTAL CONNECTIONS;
ROTARY ENGINEERING ELEMENTS OTHER THAN
GEARING, COUPLING, CLUTCH OR BRAKE
ELEMENTS; BEARINGS [5]

17. Analysis Part I - IoT layer assignment
IPC class Name of the class
Assigned IoT
layer
G05D
SYSTEMS FOR CONTROLLING OR REGULATING
NON-ELECTRIC VARIABLES
Perception
Layer
G05B
CONTROL OR REGULATING SYSTEMS IN
GENERAL; FUNCTIONAL ELEMENTS OF SUCH
SYSTEMS; MONITORING OR TESTING
ARRANGEMENTS FOR SUCH SYSTEMS OR
ELEMENTS
Perception
Layer
G08C
TRANSMISSION SYSTEMS FOR MEASURED
VALUES, CONTROL OR SIMILAR SIGNALS
Transmission
Layer
H04L
TRANSMISSION OF DIGITAL INFORMATION, e.g.
TELEGRAPHIC COMMUNICATION
Transmission
Layer
G06F ELECTRIC DIGITAL DATA PROCESSING
Computation
Layer

18. Analysis Part I - Verification
• Verification with example patents of the new identified classes
• Perception Layer
• EP3206096
• Title: CONTROLLING FOOD PROCESSING STEPS OF A MULTI-FUNCTION
COOKING APPARATUS AND REMOTE KITCHEN APPLIANCES
• IPC group: G05D 23
SYSTEMS FOR CONTROLLING OR REGULATING NON-ELECTRIC VARIABLES
Control of temperature
-> Physical product multi-function cooking apparatus as actuator
• EP3269280
• Title: CONTROLLING MULTI-FUNCTION COOKING APPARATUSES
• IPC group: G05B 15
CONTROL OR REGULATING SYSTEMS IN GENERAL; FUNCTIONAL
ELEMENTS OF SUCH SYSTEMS; MONITORING OR TESTING
ARRANGEMENTS FOR SUCH SYSTEMS OR ELEMENTS
Systems controlled by a computer
-> Physical product multi-function cooking apparatus as actuator and sensor

19. Analysis Part I - Verification
• Transmission Layer
• EP3186899,
• Title: SYSTEM COMPRISED OF AN ELECTRICAL KITCHEN APPLIANCE AND AN
ADD-ON MODULE
• IPC group G08C 17
TRANSMISSION SYSTEMS FOR MEASURED VALUES, CONTROL OR SIMILAR
SIGNALS, Arrangements for transmitting signals characterised by the use
of a wireless electrical link
-> Exchange of data with a kitchen machine
• EP2801928
• Title: METHOD FOR COPY-PROTECTED STORAGE OF INFORMATION ON A DATA
CARRIER
• IPC group H04L 29
TRANSMISSION OF DIGITAL INFORMATION, e.g. TELEGRAPHIC
COMMUNICATION Systems controlled by a computer
-> Copy protected data transfer to household appliance

20. Analysis Part I - Verification
• Computation Layer
• EP3590393
• Title: METHOD FOR DIGITIZING A COOKING PROCESS, KITCHEN APPARATUS
AND SYSTEM FOR DIGITIZING A COOKING PROCESS
• IPC group:G06F-016
ELECTRIC DIGITAL DATA PROCESSING Information retrieval; Database
structures therefor; File system structures therefor
-> Information data processing regarding cooking process
• New identified classes and assignement to IoT Layers verified with
example patents covering Thermomix TM5 or TM6 functionalities.

21. Analysis Part I - Result
• New IPC classes identified
where Vorwerk filed for
their digtial transformed
products TM5 and TM6
• Relevance of example
patents for TM5 or TM6
verified
-> Additional digital
technology used in TM5 and
TM6 located in identified
classes
-> New identified classes (not
visible before 2004) contain
potentially patent
infringement relevant third
party patents
IPC class Name of the class
Assigned IoT
layer
G05D
SYSTEMS FOR CONTROLLING OR REGULATING
NON-ELECTRIC VARIABLES
Perception
Layer
G05B
CONTROL OR REGULATING SYSTEMS IN
GENERAL; FUNCTIONAL ELEMENTS OF SUCH
SYSTEMS; MONITORING OR TESTING
ARRANGEMENTS FOR SUCH SYSTEMS OR
ELEMENTS
Perception
Layer
G08C
TRANSMISSION SYSTEMS FOR MEASURED
VALUES, CONTROL OR SIMILAR SIGNALS
Transmission
Layer
H04L
TRANSMISSION OF DIGITAL INFORMATION, e.g.
TELEGRAPHIC COMMUNICATION
Transmission
Layer
G06F ELECTRIC DIGITAL DATA PROCESSING
Computation
Layer

22. Analysis Part II – Citation analysis
• Citation Analysis of Example patents, cited and citing patents
• Citation performed by Patent Owner, Examiner or Third party
applicant
• Patents with focus in direction kitchen machine visible
• Patents with general aspects of IoT layers as sensor and actuator
technology, information and communication technology or data
processing visible
• Confirms that additional IPC classes and IPC groups describe
additional area in patent literature, where additional potentially
relevant patents regarding Thermomix are located.

23. Analysis Part II – Size of relevant area
IPC class Layer Number of patents
A47J-043 Physical Layer 69.281
G05D-023 Perception Layer 74.873
G05B-015 Perception Layer 33.437
G08C-017 Transmission Layer 80.191
H04L-029 Transmission Layer 478.598
G06F-016 Computation Layer 119.882
• Main IPC groups of physical device compared to additional groups
based on example patents

24. Analysis Part II – Filing Dynamic
• Taking 18 month non disclosure in regard
• G05B-015 (Perception Layer) and H04L-029 (Transmission Layer) had
a maximum in 2015 and in 2016 and following slight lower numbers.
• G06F-016 (Computation Layer) had until 2014 low numbers, strong
increased until 2018 to nearly 40000.
• Overall growing tendency of the additional identified IPC groups
based on example patents

25. Analysis Part II – Patent owner
• A47J-43
1. Joyoung
2. Shaoxing Supor Domestic Electrical Appliance
3. Midea
• Domestic appliance provider, including Vorwerk place 10.
• G05D-23
1. Hitachi
2. Toshiba
3. Mitsubishi Electric
• Big technology companies, Midea 7.
• G05B-15
1. Panasonic
2. Honeywell
3. Toshiba
• Big technology companies outside domestic appliance market

26. Analysis Part II – Patent owner
• G08C-017
• State Grid Corporation of China
• Siemens
• Samsung Electronics
• H04L-029
• Huawei
• IBM
• ZTE
• G06F-016
• Alibaba Holding
• IBM
• Tencent Technology

27. Analysis Part II - Result
• Field of possible relevant patents significant extended
• Based on example patents, increasing by factors and growing
• For completeness further research neccessary
• New patent owners
• Big technology companies outside domestic appliance market

28. Applicability of analysis
• Internet of Things concept
• real world product
• additional digital technologies
• Technology of additional layers different to technology of physical product
• Limits
• Analysis not valid for products including already IoT layer technology in
physical product.
• Example: Mobile Communication Tester
• Technology of transmission layer already included in physical product.

29. Conclusion
• Increased patent infringement risk, due to significant increased
technological areas in patent literature
• Increased patent infringement risk management effort
• Identification
• Extended search field
• Potentially more relevant patents identifiable, in additional fields
• Evaluation
• Increased number of patents
• Unknown or new patent owner
• Risk control
• Increased number of patents
• Unknown or new patent owner
• Avoiding of economic damage and Freedom to operate
• Big new patent owner
• Further research neccesary for organisation of significant increased patent
infringement risk management.
Source: DIN 77006

30. Conclusion
• Examples for influence on strategic positioning in industry
• Risk that competitive forces are increased due to increased patent infringement risk
-> risk of lower profitbility.
• Higher risk for…
• Increased bargaining power of customer – exclusive USP available?
• Increased threat or substitute products – increased costs for estalished product
• Increased threat of suppliers – interoperability with communication standard
• Increased threat of new entrant – patent infringement as lever reducing or removing entry
barrier
• Increased bargaining power of complementor – forced cooperation, share in cooperation
Increased threat of rivalry of direct competitors – differentitation criteria exclusive available
-> minor increased risk of threat based on direct competitiors patent portfolio
(as long as the big technology companies are not direct competitors)
• For a complete industry analysis including the role of the new patent
owners is further information and reseach neccessary
Source: Wurzer MIPLM 2020, Strategy Deveopment
Michael E. Porter, The Five Competitive Forces That Shape Strategy, 2006

31. Conclusion
Patent infringment risks as growing future challenge for companies
transforming to digital business models.
Thank you.