The development of patents (drafting for new applications, creating value through prosecution and strategic patent portfolio development) regarding IoT innovation should consider the IoT business reality. Especially, the IoT patent development should support future development of IoT businesses and commercial implementations of IoT innovations. Additionally, the IoT patent development should support for both ecosystem players’ exploitation and customers’ use of the IoT innovation. The disclosures of the IoT patent can be considered as a system that is consist of several subsystems: environmental context, IoT sensor, information, transfer mean and processing tool.

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IoT Business Reality & Patent Development
I. IoT Business Reality
Goldman Sachs defines the IoT (Internet of Things) as the third wave of internet revolution: by connecting to the
internet billions of devices, the IoT opens up a host of new business opportunities and challenges. According to
McKinsey, the IoT has the potential to create up to $6 trillion economic value annually by 2025. The IoT has
various applications including, smart homes, connected cars, smart grids, smart healthcares, smart businesses and
smart cities. Many players across diverse industries including semiconductor, consumer electronics, ICT,
healthcare, retail, industrial & manufacturing and transportation are participated in the IoT business. Recently,
many global leaders in the IoT business provide the IoT platforms to create diverse platform-based business
models and form the IoT business ecosystem. According to the market research of Research and Markets, there are
more than 2000 companies (including 260 companies that are offering IoT platforms) that are selling IoT enabled
products, playing a vital part in the IoT technology infrastructure, or act as an enabler to the IoT development. The
IoT business reality can be summarized as follows.
• The IoT business will follow either evolutionary or revolutionary development step depending on the
innovation characteristics of the building blocks of the IoT - IoT devices: Devices that can sense/recognize
their surrounding environments and communicate with other devices; Networks: Connecting/communicating

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medium/infrastructure that can interconnect devices and connect devices to the internet; IT systems: Back-
end or embedded systems that can process information (data) obtained by the IoT devices (e.g. cloud
computing/big data analytics) and provide the value added services exploiting the information.
• A few major companies will not dominate the growth of the IoT market. Rather, virtually all of business
ecosystem players will involved in creating and developing the IoT market.
• It will take some time to reach the fully gown IoT market. The IoT product/service will keep making life
richer, safer and more comfortable and work easier, more productive and more efficient.
• The IoT business will be interdisciplinary across many industries. The IoT business will have synergies by
the convergence of many different technologies or business attributes. The IoT business can create entirely
new industries providing dramatically different values to the customers.
II. Patent Development Strategy for the IoT Business Reality
The development of patents (drafting for new applications, creating value through prosecution and strategic patent
portfolio development) regarding IoT innovation should consider the IoT business reality. Especially, the IoT
patent development should support future development of IoT businesses and commercial implementations of IoT

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innovations. Additionally, the IoT patent development should support for both ecosystem players’ exploitation and
customers’ use of the IoT innovation. To take care of the tasks of the IoT patent development in alignment with the
IoT business reality, the system approach to the IoT patent can be applied.
The disclosures of the IoT patent can be considered as a system that is consist of several subsystems:
environmental context, IoT sensor, information, transfer mean and processing tool.
• Environmental context is the context of the surrounding object(s) sensed by the IoT sensor.
• IoT sensor is a stand-alone or embedded device that can sense/recognize its surrounding environments
(including position/movement/identification) with networking capability.
• Information is the context data obtained by the IoT sensor for specific purpose.
• Transfer mean is the networking/communicating medium/infrastructure that can interconnect sensing
devices and connect sensing devices to the internet.
• Processing tool the back-end or embedded IT systems/processors that can process the context information
(e.g. cloud computing/big data analytics) and provide the value propositions exploiting the information.

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Following figure illustrates the IoT Patent system.

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Then, the system as a whole and each system can be construed to support future development of IoT businesses
and commercial implementations of IoT innovations.
For details regarding the IoT patent development, please contact Alex G. Lee (alexglee@techipm.com).
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