TechInsights and Chipworks: a connected future
The aim of the merger between TechInsights and Chipworks is to create the global leader in advanced technology intelligence and technology-founded patent advisory services. The combined companies will operate under the name TechInsights, and will have the most extensive database of technology intelligence on electronics; be a leading provider of reverse engineering analysis in semiconductors, electronics and software; and have an unmatched team of experts in key technology disciplines, and in portfolio management and patent monetisation best practices.
Mike McLean, senior vice president of intellectual property services at TechInsights, says: “TechInsights and Chipworks are two of the largest players in the reverse engineering and technology patents support space, and we are bringing together the capabilities and the library of technical content that both companies have. We think this will be an incredibly valuable resource to patent owners and users of competitive technical intelligence.
“The volume of information available and the amount of expertise that is being brought together will be unrivalled, and we’re very excited about the prospect this creates for our clients,” Mike McLean adds.
Both firms have a long history in understanding the technology and IP of connected devices, and TechInsights’ customers are increasingly interested in the ‘internet of things’ (IoT). The Oxford English Dictionary definition of IoT is “a proposed development of the internet in which many everyday objects are embedded with microchips giving them network connectivity, allowing them to send and receive data”.
However, this definition of IoT undersells the breadth and potential of this world of connected sensors, devices, data analysis and services. Ian MacLean, vice president, patent intelligence services at Chipworks, says: “We’ve been hearing a lot about IoT at conferences for a few years and we are now seeing IoT-driven patent portfolio activity and licensing. Our clients want to understand both the underlying technology of the devices in the IoT as well as how they interact and the implications for their businesses.
“You have a merging of old and new technology, combined with new use cases and business models, along with a blend of experienced patent holder incumbents and emerging players, all of whom are battling for a piece of the new market.”
In this space, he says, “we have some very established players who are very experienced in managing and leveraging IP, and then you’ve got disruptive new entrants who often lack the powerful portfolios they need. It’s still evolving, and trying to figure out which technologies and business cases will win and what the patent landscape is going to look like is still very much in development”, Ian MacLean adds.
Mike McLean says that IoT covers a broad range of markets. Consumer areas such wearable technology, automotive, and home automation are garnering lots of press but have some adoption challenges. Industrial and B2B applications of IoT in areas such as smart cities, agriculture, manufacturing and retail are seeing significant growth and appear to be approaching maturity sooner.
Ian MacLean adds that “there are some interesting use cases emerging that bridge consumer and B2B worlds—remote medical monitoring is a prime example. However, adoption is hampered by concerns of regulation, implementation costs and data security and privacy issues”.
All about the ecosystem
To understand the IoT, Mike McLean says that he takes an ecosystem approach. “First you have the device layer, then the system layer and finally a services layer. At the device level you are collecting data and transmitting that into a broader system. At the system level you have the infrastructure for connecting all the things together and transmitting that information between layers. At the services layer the data is analysed and stored; from here new uses and markets are found for the aggregate data.”
So what does IP maturity look like within IoT? Ian MacLean says that “from a patent standpoint we see greater crowding in the first two categories, where foundational technologies are being redirected to new applications. The patent landscape is crowded and there is less room for emerging companies. Diligence is required to carefully understand the patent landscape before entering and to make sure appropriate protection is obtained, as well as establishing freedom to operate”.
"Portfolio management is crucial to smart IoT portfolio growth.Know what you have and how you stack up against the broader, and evolving, marketplace."
He continues: “The IoT involves complex interactions between different systems and there will be situations where multiple actors are involved; in these cases, care must be taken to address divided infringement. The highest potential value resides at the services layer, in analytics and value added services. However, this is the more challenging IP management area.”
There have been a few high-profile patent assertion events in the IoT space to date, but on the whole we are in a period of portfolio building, as patent owners get to grips with understanding the evolving IoT market and developing their business and IP strategies. Mike McLean adds that, “the patent opportunity at the moment is building a strong portfolio. Are you thinking through five years, ten years from now? Does your portfolio support your business objectives?”
“To develop your portfolio, either grow organically through strategic filing and patent improvement or make a more dramatic move and do something substantial such as acquiring a portfolio or business. Building a portfolio smartly is key right now and that should include taking a broader look at adjacent technology and use cases,” Mike McLean adds.
“A lot of people are good at building a portfolio on one technology piece of the ecosystem,” he continues. “But if you build a stronger portfolio by considering other market segments or products then it can provide you with significant business leverage.”
The interplay of connected devices and systems in IoT causes particular challenges for patent owners trying to demonstrate the value of their inventions. So where does TechInsights see the most IP opportunity and challenge?
“At the device level reverse engineering is more straightforward, and so initially expect to see licensing efforts concentrated here. Demonstrating evidence of use at the system layer is more complex,” says Ian MacLean.
Discussing the third layer, analytics and software, the success of patent leverage at that level at the moment is “still up in the air”, Ian MacLean adds. “These areas are sensitive to patentability and validity challenges under section 101 in the wake of Alice v CLS Bank.”
IoT has been an important player in mergers and acquisitions (M&A) deals over the past year or so, involving some well-established companies.
In February 2015, Intel acquired semiconductor company Lantiq in a deal centring on smart gateways and intelligent access networks.
The acquisition expanded Intel’s activity in the cable residential gateway market and aimed to broaden its offering to other gateway markets, including the digital subscriber line, fibre, long-term evolution, retail and IoT smart routers.
Ian MacLean says that although this merger wasn’t a big one, it brought Intel into a new space and a new era.
The acquisition of Broadcom’s IoT business, he adds, was another important M&A deal this year. Cypress Semiconductor acquired Broadcom’s wireless IoT business and related assets in an all-cash transaction of $550 million. This move bolstered Cypress’s capabilities in wireless connectivity and helps grow its consumer IoT business.
Advice for large patent owners
While Cypress and Intel are starting to understand the importance of IoT for their business and patent strategy, Ian MacLean and Mike McLean have some sound advice for other large patent portfolio owners who are interested in IoT.
Ian MacLean says that “you have to figure out where your focus of interest is going to be because it’s really difficult to span all of it” and he advises patent owners to understand the competitive and patent landscape and IoT value chain. There are some IoT-specific challenges for IP owners, continues Ian MacLean. “IoT is currently a fragmented space with a large number of players with competing protocols and technologies. Standardisation will occur, and this will bring FRAND issues into play.”
Portfolio management is crucial to smart IoT portfolio growth, says Mike McLean. “Know what you have and how you stack up against the broader, and evolving, marketplace; if you have a big portfolio it’s sometimes hard to know what specific assets there are, so being on top of portfolio management is key.
“It’s important to understand which pieces of your portfolio are relevant to IoT and to understand how that value can be demonstrated,” he adds.
Ian MacLean is vice president of patent intelligence services at Chipworks, a TechInsights company. He provides strategic direction and leadership to a team of engineers, analysts and customer service professionals dedicated to providing IP groups and law firms with the ability to get maximum value from their patent portfolios. He can be contacted at: imaclean@chipworks.com
Mike McLean is senior vice president of intellectual property services at TechInsights. He leads a team of patent and engineering professionals who help technology organisations protect, manage and use their patent rights. He can be contacted at: mmclean@techinsights.com
