For more than a year, we’ve been heralding the coming explosion in Internet of Things (IoT) technologies here on IPWatchdog. After strong showings at the Consumer Electronics Show in both 2014 and 2015, we’ve been checking in from time to time on a sector of technology which is expected to balloon towards 50 billion Internet-connected devices by the middle of the century. The early returns are pretty staggering as the sector has already become a billion dollar business for Qualcomm (NASDAQ:QCOM) of San Diego, CA. There’s a growing amount of merger and acquisition activity among chipmakers as well this year, which Reuters reports is already the strongest year for semiconductor and computer chip deals since 2000.
A white paper recently published by the intellectual property portfolio analysis service Innography gave us a concise snapshot of the current patent landscape in the Internet of Things sector. Interestingly, this paper focuses specifically on Bluetooth Low Energy (BLE) as the major area of its patent analysis. In our history of Bluetooth wireless communications we noted how the inter-device communication protocol would likely play a large role in the burgeoning IoT field. The Innography paper describes BLE and the more than 1,000 patents issued for BLE technologies as “central component[s] of enabling technology for ‘The Internet of Things.’”
The two largest patent portfolios related to BLE technologies are owned by Irvine, CA-based fabless semiconductor company Broadcom (NASDAQ:BRCM) and South Korean electronics giant Samsung (KRX:005930). A market map view of the top innovators in the BLE space shows that not only does Broadcom have a slightly larger portfolio than Samsung, it has also dealt with far less litigation than the South Korean developer. The large collection of companies clustering in the lower-left quadrant of this market map represent companies with smaller patent portfolios and lower revenues. The dozens of companies dotting this portion of the map could be an indication that mergers and acquisitions in the IoT semiconductor chip space may be far from over this year.
Within the sector of BLE IoT innovation there are a number of subsectors which showcase how certain companies have been focusing their research and development activities within various fields related to Bluetooth. Canadian telecommunication and wireless equipment developer BlackBerry Limited (NASDAQ:BBRY) has been the company most actively filing patent applications and receiving patents related to the development of smart batteries. The creation of smart battery technologies that could last for years within devices has been an important consideration for Internet of Things developers. Broadcom has been the company most active in the field of wireless interfaces while both the electronic device and smartphone fields are seeing a good deal of R&D from San Jose, CA-based telecom developer Nexstep, Inc.
Globally, China is establishing itself as a regional power of research and development in Internet of Things technologies. The largest concentration of related patent applications have been filed by inventors from that country. China’s 44.7 percent share of Bluetooth Low Energy inventions far outpaces the second-place United States, which is responsible for 15.8 percent of BLE patent applications, just over one-third of what Chinese inventors have produced. America does retain the top spot among countries where patents related to BLE tech are being filed with 1,056 active patents filed with the U.S. Patent and Trademark Office, according to Innography’s analysis. The World Intellectual Property Organization occupies second place with 751 patent filings in the field and the European Patent Office is third with 354 patents. This indicates that, although a majority of BLE innovation is taking place overseas, innovators from all over the world still see the American market as the best one in which to commercialize their products.
The Innography analysis may be useful to innovators who are looking to enter the IoT field but aren’t sure where they might be able to have the most impact. The Innography white paper provides a text cluster map that collected 322 text clusters from the abstract, title and claims of 1,000 BLE-related patents. Although plenty of development has already been seen in terms of electronic devices and mobile devices, areas of IoT tech involving master devices and access points may be underdeveloped emerging markets. As the Innography analysis points out, the text cluster data regarding access points indicates that intra-device communication for smart home technologies that controls thermostats, lights or locks is an area that has yet to experience a great deal of growth.
The patent market for Bluetooth Low Energy technologies is one that has seen a relatively low amount of litigation as of yet. U.S. court cases involving the infringement of patented BLE technologies spiked to 24 total cases in 2012 and 26 cases in 2014. In 2013 there were only four court cases filed, indicating that 2012 and 2014 were both years in which a much larger number of IoT products were brought to the commercial market. An overwhelming majority of these cases were filed in the Eastern District of Texas, which Innography notes is a district that has been friendly towards non-practicing entities in court cases. A heat map created by Innography depicting the major plaintiffs in 830 patent litigation actions shows three individuals sharing the last name Freeny are among some of the busiest litigators. Charles, James and Bryan Freeny are all linked through other patent filings to Automated Business Companies, a patent holding company located in Spring, TX, which has been active in five pieces of patent litigation against companies such as Citrix Systems, Canon USA and Sharp Electronics. Patent litigation in the field of Bluetooth Low Energy may also be affected by the fair, reasonable and nondiscriminatory (FRAND) licensing guidelines that apply to owners of Bluetooth patents.
Finally, we were intrigued to note that the Innography IoT patent analysis was able to identify what it considered to be a collection of 33 key patents within the Bluetooth Low Energy sector. These 33 technologies were held by a total of 17 companies, marking some very important players in the growing Internet of Things. A market map of these companies depicts Nokia (NYSE:NOK) as having the largest number of key patents. The relatively low amount of litigation in which that portfolio is involved could be an indicator of the strength of Nokia’s collection of BLE patents. Broadcom, Qualcomm, Zomm LLC and Intel Corporation also appear at the top of this list of companies holding key BLE patents.