I.
IoT Application Business Models
A
business model is the way in which a company makes money through its business.
The key building blocks of a business model are the value proposition, profit
model, and business resource. The IoT (Internet of Things) has various
applications across diverse industries including, smart homes, connected cars,
smart grids, smart healthcares, smart businesses and smart cities. The key
building blocks of business models for IoT applications can be summarized as
follows.
A.
Business Resource
·
IoT devices: Devices that can
sense/recognize their surrounding environments (including position/movement/identification)
and communicate with other devices
·
Networks: Connecting/communicating medium/infrastructure that can interconnect
devices and connect devices to the internet
·
IT systems: Back-end or embedded 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
B.
Value Proposition
·
Automation: Providing various automation
services for the customers’ job to be done (e.g. order the out of stock product
automatically; mobile payment; self driving car)
·
Care: Caring for customers (e.g. monitor
customers’ body status and provide various health care services; control
customer’s home cooling and heating/lighting system for energy savings)
·
Business Intelligence: Providing better
working tools/environments (e.g. analyze customers’ shopping behavior for
proactive promotion/advertisement)
·
Entertainment: Providing fun to
customers (e.g. virtual reality games)
C.
Profit Model
·
Device/IT system sales with value added
services
·
Subscription fees
·
After-market sales (e.g. part sales)
·
Third-party sales (e.g. advertisement)
Combing
the key building blocks, various business models for the IoT applications can
be developed.
II.
Post-Alice Patent Eligibility Test
The
Supreme Court’s Alice Corp. v. CLS Bank decision provided two-step process to
determine whether an invention is the patent-eligible:
Step
1. Determine whether an invention claims ineligible subject matter (laws of
nature, natural phenomena and abstract ideas)
Abstract
ideas identified by the courts include fundamental economic practices, certain
methods of organizing human activities, a mental process and mathematical
relationships/formulas.
Step
2. Determine whether an invention, otherwise directed to an abstract idea,
recites elements, either in isolation or combination with the non-patent
ineligible elements, that provide “significantly more” than the abstract idea
itself (sufficient to “transform the nature of the claimed invention into a
patent-eligible application,” and thus, there must be an “inventive concept:”
“Simply appending generic computer functionality to lend speed or efficiency to
the performance of an otherwise abstract concept does not meaningfully limit
claim scope for purposes of patent eligibility.”).
Courts’
decisions provide the examples of claim elements that provide “significantly
more” than the abstract idea itself:
DDR
Holdings, LLC v. Hotels.com: The patent provides “an Internet-based solution to
solve a problem unique to the Internet that (1) did not foreclose other ways of
solving the problem” (preemption of every application of the abstract idea),
and (2) “recited a specific series of steps that resulted in a departure from
the routine and conventional sequence of events” (departure from a human
activity implemented into generic computer functionality)
Fairfield
Industries, Inc. v. Wireless Seismic, Inc.: The patent outlined “a specific
method of data transmission that is a (1) new, useful and practical application
of a generic relay system” (new, useful and practical application beyond
generic system functionality; improved technology), and (2) recited a “close
connection to a specific machine, the seismic acquisition unit” (connected
(implemented) to specific computer functionality)
Diamond
v. Diehr: The patent provides “a method
that is directed to a mathematical relationship and steps that could be
performed mentally,” but has additional process of shaping uncured material into
cured synthetic rubber (amount to significantly more than the abstract ideas
because transforms a particular article to a different state or thing)
USPTO’s
Guidance on Subject Matter Eligibility also provides additional examples of
claim elements that provide “significantly more” than the abstract idea itself:
Please visit following site and see the appendix 1.
III.
Patent Eligibility of IoT Business Models
Patents
for the IoT application business models can claim various value propositions incorporating
claim elements (steps) using the relevant business resources (and/or profit models).
With respect to the patent eligibility test, most of the value propositions of the
IoT business models can be identified as abstract ideas because they are the certain
methods of organizing human activities and a mental process. Thus, one must devise
claim elements that provide “significantly more” than the abstract idea. Simply
transferring the sensed data through the wireless networks or processed the data
for providing customer-aware services will not sufficient to transform the
nature of the claimed invention into a patent-eligible application. Rather, it is
necessary to provide claim elements that connect to a specific machine/article (e.g.
medical device, thermostat, drug) and 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 use the value propositions to improve other technologies.
For details regarding the patent development
strategy for the IoT business models, please contact Alex G. Lee
(alexglee@techipm.com).
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http://www.techipm.com/
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