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Patent the Internet of Things, or not?

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Kenie Ho, Partner, Finnegan

The Internet of Things (IoT) is the big next step as we continue evolving from the Flintstones’ prehistoric lifestyle to the Jetsons’ futuristic utopia.

IoT-enabled cars may soon drive you to and from work and find parking without your input or intervention. IoT-enabled homes will automatically regulate your house, from keeping your refrigerator stocked to running your washer/dryer, lighting, and home security. IoT medicine will remotely monitor your aging relatives’ health and automatically treat them in case of emergency.

With all these advances, you might think that companies are patenting IoT inventions left and right. That’s true for many of the technologies converging to form the IoT ecosystem, like sensor devices at edge nodes, network hardware, and protocols in the connectivity layer, data servers, and security.

But much of the innovation in the IoT space comes from creative use cases — the high-level IoT applications as seen by the user. And recent developments in U.S. patent law will make it challenging for companies to patent these types of inventions.

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Alice in IoT Wonderland

In June 2014, the U.S. Supreme Court decided a landmark case, Alice Corp. v. CLS Bank International, which affected many, if not all, U.S. patents relating to computer and Internet-based technologies. The Alice case laid down a test for determining what types of inventions are patent-eligible.

The test can be briefly summarized as follows:

1) Determine whether the invention is an “abstract idea,” such as an algorithm, mathematical formula, or fundamental economic practice, and

2) If the invention is an abstract idea, determine whether the invention is something “significantly more” than just the abstract idea that transforms the abstract idea into a patent-eligible invention.

Ever since that case, patent applicants have been working hard to interpret the meaning of “abstract” and “significantly more.” In the meantime, courts and agencies around the country have used the Alice test to strike down a number of software-related patents. 

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Putting Alice to the test: Some examples

Wireless Media Innovations LLC, a Delaware-based company, recently sued Maher Terminals LLC, a marine cargo container moving company. Wireless Media accused Maher Terminals of infringing two patents relating to monitoring container identification codes and generating reports including the locations of the cargo containers. The inventions were found to be not patent-eligible under the Alice test because they were too abstract. 

Similarly, in another case, Thales Visionix Inc. sued the U.S. government and Elbit Systems of America LLC for patent infringement. Thales develops helmet-mounted display (HMD) systems that track a pilot’s head movements to produce an integrated display. Elbit provides HMD systems for the F-35 Joint Strike Fighter. The judge in that case found that Thales’ patent failed the Alice test, stating that the concept of “determining the relative position of a moving object [i.e., the helmet] to a moving reference frame [i.e., the airplane]” is something derived from Newtonian principles and that the patent is simply directed to the abstract idea of tracking two moving objects.

Both cases are under appeal.

Can you still get a software-related IoT patent under Alice?

Yes, you can. But innovators may need to focus patents on narrower areas of protection. If a patent is too broad, a court might decide that the invention is “too abstract” and invalidate the patent.

One approach is to specify the use of particular hardware. If an inventor limits the patent to a particular set of devices and a particular environment, it is possible that an invention, even a software-related invention, will be found patent-eligible.

Another approach is to provide specific operations, such as detailed algorithms. Broadly trying to patent straightforward steps in a software algorithm runs the risk of invalidating any issued patent. Patenting narrower inventions by specifying, for example, the particular — and perhaps novel — steps, will produce patents with a better chance of surviving the Alice test.

Finnegan associate Christopher Johns co-authored this post.

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