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The fitness wearables market is driving millions of shipments per year in silicon and devices. By 2019, IDC predicts that the worldwide wearables market will grow to around 155.7 million units. In addition to driving revenues — the fitness wearables market alone is projected to reach nearly $30 billion US dollars in 2016 as noted. The patent licensing landscape for this market is on the verge of explosive growth, especially since many of the patents used in IoT technology are nearly 20 years old.
Companies at the cutting edge of their industries have realized the immense value of their patent portfolios and are still trying to make the most of that value – but it is not easy. A semiconductor or electronics company can have tens of thousands of patents; finding the patents that are the most valuable is one of its biggest problems. These patents are needed to determine the strategy for patent sale, licensing or litigation, and without them the company is basically stuck and can’t move forward. The process is like sorting the grain from the chaff.
To maximize the return on investment from a patent portfolio, patent owners must determine which is more lucrative: sales or licensing. In general, patent licensing promises the highest total return on monetizing an IP portfolio because the IP owner can license the same asset or (a single patent or portfolio) to a number of different licensees. On the other hand, it may take three to five years to realize significant revenue from licensing. Additionally, licensing comes with a host of potential risks including litigation, invalidity arguments, and more. More and more frequently patent sales/transfers are part of licensing settlements to ensure there is more of a ‘win/win’ result for negotiating parties.
Technology is in a constant state of evolution, and the Internet of Things (IoT) is no exception. The top five emerging markets for the IoT – medical, fitness wearables, industrial, automotive, and smart homes – are driven by patented IP, much of which is being applied in IoT inventions. The patents for the five technology areas of the IoT – Things, networking, computing and storage, services and analytics – differ in content and maturity. The bottom line is that the technologies at the beginning of this system, Things, and at the end of this system, analytics, are the newest. The technologies in between, networking, computing and storage, and services, are established, but will evolve and scale for IoT. It is in these “in between” areas that we see the most dominance of mature companies.