The Internet of Things Part I: Patent Prosecution Issues

Like any emerging technology, entrepreneurs and companies developing applications in the IoT space will seek patent protection for their inventions.  However, obtaining strong patent protection in the IoT space presents unique challenges.  For example, where do you focus protection?
Consider an example regarding the emerging technology of autonomous vehicles.  Such vehicles may rely heavily on IoT technologies, including vehicles equipped with IoT-enabled sensors capable of reporting on various variables such as vehicle position with respect to other vehicles and obstacles, environmental parameters which may be utilized to control aspects of vehicle controls, etc.  Furthermore, autonomous vehicles may utilize IoT-based information to assist in navigation, including IoT sensors located at strategic positions on a smart highway, in a smart city’s traffic-control architecture, etc.
The inherent difficulty in obtaining patent protection thus lies in that it is likely that there may be numerous players who own or produce the various components in such a scenario.  For example, if a company or individual has a patent covering relevant aspects of autonomous vehicle navigation, what are the options in case of infringement?  In such an example, it may be challenging to determine the infringing party.  In other words, such an example may lead to a case of divided infringement.
To avoid such issues of divided infringement, there is significant advantage to obtaining patent claims that a competitor can be shown to directly infringe.  One way of approaching this is to draft patent claims from the perspective of a single device in the IoT system.  For example, in the case of an autonomous vehicle, it may be advantageous to draft patent claims from the perspective of the vehicle powertrain control module.  The powertrain control module may include algorithms regarding a novel data-management control system or may comprise a module that receives data from various IoT devices, analyzes it, and provides instructions to various actuators to direct navigation of the autonomous vehicle, for example.  However, when drafting such claims, it is important to ensure that the claim idea comprises more than just an abstract idea, as will be discussed in greater detail below.
Structuring claims from the perspective of the vehicle control module may be advantageous in terms of avoiding cases of divided infringement, but it is important to keep in mind issues related to subject matter eligibility with regard to obtaining patent protection in the IoT space.  IoT-based patents are particularly challenging due to the fact that the vast majority of IoT inventions are rooted in computer technology.  In what is commonly known as the “Alice” case (Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 234 (2014)), the court found that a computer-implemented method for mitigating settlement risk was patent-ineligible because it “add[ed] nothing of substance to the underlying abstract idea.”  As a result, the USPTO and courts have increasingly used the Alice case to find computer-implemented inventions ineligible for patent protection, for failing to add “significantly more” to an abstract idea.
Clearly, such a decision by the court poses hurdles to obtaining IoT-related patents.  However, this does not preclude patenting IoT-based inventions, in particular with regard to autonomous vehicles.  Two recent Federal Circuit court cases illustrate examples of how computer-related inventions may be patentable.  In the first case, DDR Holdings LLC v. Hotels.com LP, the Federal Circuit found that patent claims to a system for generating composite webpages were not directed to an abstract idea because the claimed invention was “necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.” (773 F.3d 1245, Fed. Cir. 2014).  The second case (Enfish LLC v. Microsoft Corp. et al., No. 15-1244, slip op. at 12, Fed. Cir. 2016) established that patent claims directed to a relational logical model for a database were not abstract because “they are directed to a specific improvement to the way computers operate, embodied in the self-referential table”.  Thus, a potential strategy to overcome rejections based on the Alice case is either to draft claims demonstrating that an IoT-based invention adds significantly more than just an abstract idea, or to draft claims demonstrating an IoT-based invention is rooted in computer technology, or directed to a specific improvement to the way computers operate.
In Part II of this three-part series, we will discuss further strategies to obtaining patent protection in the IoT space, again using autonomous vehicles as an example.



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