Implications of Patents on Emerging Technologies Adoption

1. INTRODUCTION

As the U.S. market is maturing and competition is intensifying, IT service providers are adopting new measures to find additional sources of revenue. They have invested heavily in next generation technologies for developing digital platforms. Some of these are using SMC (Social, Mobile and Cloud) technologies, Analytics, IoT (Internet of Things), and Composite interfaces (combining gesture, movement, facial and voice recognition). The offerings using emerging technologies are highly commoditized and aggressively marketed. Therefore, these are accessible to competitive scrutiny. As few leaders are holding high amount of patents, other service providers are vulnerable to potential litigations. Most of the IT service providers seem to be oblivious to the impending threat looming due to strategic lacuna in intellectual property protection.

2. Patents, Hype and Adoption

The development and adoption of an emerging technology follows a hype cycle. First generation products build-on laboratory experiments. They create huge expectations and media hype. Currently, most of the patenting activities are focused on this stage of life-cycle. Service providers are rushing to secure IPs, without any significant initiative for commercial success. So, when the second and third-generation products are launched, they have to deal with a large number of existing patents awarded in their product domains.

3. Software Intellectual Property

Competitors can quickly launch an imitation, by copying the innovative design, technology, or application. There are various strategies adopted by early innovators to safeguard inventions. Currently some players in technology ecosystem have been trying to increase the entry-barrier for competition by resorting to IP protection with patenting.

In the following sections, we will examine patents issued in two emerging technologies domain. These patents are not only overlapping between themselves, but covering a wide genre of technology applications. In future, any commercial application leveraging these technologies can invite IP-violation legal notices.

4. Virtual Dressing Room

The concept relates to ability to try-on garments and other accessories, like jewelry, glasses, watches, purses, etc. without actually having them physically with the user. This application has high utility value for multi-store retail stores, where users can try a lot of options without store executives removing the items from shelves, helping in efficient inventory management, and enhanced customer experience. As first generation products are being launched, there are only a few examples of product adoption (mostly in pilot implementation stage). However, the patent activity is buzzing, with various vendors claiming to own IPs to multiple applications, across a wide range of business processes.

One of the earliest patents was assigned to Imaginarix Ltd., for virtual dressing over the internet. It is a method and a system for displaying garments over the Internet as though the garments were being draped over the body of a user. As media hype focused on novelty and utility aspect of technology, more vendors started exploring the virtual dressing skills in their technology innovation labs, and many of them have sought protection for their IPs of ideas or, first generation products related to a wide genre of applications, with little variations among them.

5. GEO-FENCING

The Geo-fencing concept relates to location tracking of individuals leveraging their mobile devices. When they are detected to be within a certain distance of a point-of-sale location, alerts are sent to their mobile devices. This feature is primarily used for digital marketing, to capitalize on human impulse to purchase for availing discount coupons.

Major vendors have availed following patents:

Where, Inc. can claim that all the above patents are building on its patent on location-based services.

The first patents in vehicle tracking, where the concept of geo-fencing originated, were filed during the earlier decade.

Passtime has secured a series of geo-fencing patents for GPS tracking and automated collection.

6. CONCLUSION

Clearly, competitive activity around emerging technologies has increased tremendously. In this scenario, the IP protection tactics has been used by few vendors to serve their short-term motives. But, this is detrimental to the growth of technology industry. Regulatory uncertainty has contributed to more confusion in this domain. In the collective interest, various players should come together and form an industry body to manage these issues. They can mutually agree to trade licenses for acquired patents, and ease of dealing in the IPs can reduce the cost of acquiring them substantially. This can reduce bottlenecks in product development, resulting in faster time-to-market. Additionally, the stakeholders across the value-chain can agree to stop filing patents for abstract ideas, at the early stages of development. Instead they can focus on developing the ideas with relevant applications in verticals, and seek protection for applications in specific usage scenarios, once the idea is development for implementation.

We recommend industry players to debate and come together as an industry body to frame common standards and have a congenial atmosphere for developing new service lines using emerging technologies.