Thursday, August 6, 2015

IoT Ecosystem & Patent Strategy

I. IoT Business Ecosystem

A business ecosystem is the community of business entities that is formed by the competitive and collaborative interactions among business entities for new innovations. A business ecosystem evolves to form a new value network, and thus, to create a new market. The key building blocks of a business ecosystem are the platform providers and value creators. A platform provider develops a platform, which is a collection of core technologies/solutions with open interfaces for interaction with the value creators. A value creator creates values by exploiting the platform.

Many market researchers expect that the interconnected IoT (Internet of Things) devices will create a new market that will result in more than $1 trillion in value added to the global economy within 10 years. Recently, many global leaders in IoT business provide the IoT platforms to create diverse platform-based business models and form the IoT business ecosystem. According to the market research of Research and Markets, there are more than 260 companies that are offering IoT platforms. Some of the IoT platforms are as follows.

·         Samsung Artik platform can help developers create new sensor-enabled devices. Artik platform includes a family of processors and wireless connectivity that can power and connect everything such as servers, smartphones and wearables (

·         Apple HomeKit home automation platform can help developers create new securely connected home automation devices in iOS.  HomeKit enables users to discover HomeKit accessories in their home and configure them, or create actions to control the devices (

·         Qualcomm AllPlay Smart Media Platform allows simple wireless connectivity to individual speakers or an entire home audio system over the user's existing home WiFi network (

·         Google Brillo platform will help developers create connected home environment.

The number of competing IoT platforms is likely to increase for a certain period of time, and then, merge into several dominant IoT platforms through the IoT platform wars, which means the super-competition to form a cluster with value creators at some market positions in the evolved IoT ecosystem. The cluster of a platform will be complex because of participation of diverse ecosystem players across several different industries. Following figure illustrates the clustering of a platform with value creators across the smart home and connected car industry.

II. Patent Strategy for the IoT Business Ecosystem

The patent strategy for the IoT ecosystem should be in alignment with the evolution of the IoT ecosystems initialed by the dynamic reconstruction of value networks through the IoT platform wars. Most of all, the patent strategy for the IoT ecosystem should support the essential features of the dominant design IoT platforms for the IoT ecosystem: modularity, openness and scalability.

Modularity allows various platform components of core technologies/solutions compatible to the independently developed component technologies/solutions. Thus, the patent strategy regarding patent portfolio development for the component technologies/solutions should include the patent outsourcing through patent acquisitions and M&A processes.

Openness provides the flexible and transparent interaction interface for the efficient and effective development of value-added applications by the value creators. Thus, the patent strategy should cover the open licensing program. Additionally, the patent strategy should provide the strong protections to the ecosystem collaborators.

Scalability is the application capability across several industries. Thus, the patent strategy for the patent creation, portfolio development and exploitation should take care of the relationship with the IoT ecosystem players across different industries. This means that the strategic patent creation, portfolio development and exploitation should consider not only the traditional Porter’s competition strategy but also the ecosystem alliance strategy across different industries.

Furthermore, the patent strategy should support the value creation by the platform provider itself. Following is an example of the patent strategy that can support the value creation by the platform provider itself by exploiting existing patents.

HBS Professor Iansiti, the author of “The Keystone Advantage,” suggested technological assimilation as a new engine for technological innovations in his article “Creative Construction.” In the technological assimilation frameworks, a core innovation that once provided stand-alone products or services for a specific market can be the building blocks for mass market generating innovations through assimilation to broader platforms that were not existed at the time of innovations. A good example may be the GPS technology providing LBS (location based services) applications for smartphones and automobiles. Another good example may be the DVR technology of TiVo that was integrated into digital set-top box platforms. By contrasting all possible value propositions from a IoT platform to the potential value proposition(s) provided by the inventive departure(s) (novelty point(s)) of the existing patent(s), the integration feasibility of the existing patented technologies into the platform can be found, and thus, the new integrated value propositions can be developed.

For details regarding the patent strategy for the IoT business ecosystem, please contact Alex G. Lee (

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