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Welcome to the IP arms race

Apple’s long-awaited entry to the wearable world raised IP’s focus on a highly-competitive industry, explain Emily Nuttall and Nick Allan.

The wearable tech scene is vast and growing. A recent CCS Insight report revealed that wearable technology sales are predicted to increase globally to 250m by 2018 – that’s 14 times more devices on sale than were being used two years ago.

For those still catching up on the trend, Apple is perhaps the best-known player in the space, with the advent of the Apple Watch one of the larger landmarks to successfully bring wearable tech to the mass market. The now-shelved Google Glass is another contender that has raised the profile of wearables to new heights.

Designed to make our lives easier, wearable technologies tap into a wealth of data on the quantified self, helping us to track, monitor and make decisions about our everyday lives. Extending far beyond smartwatches and glasses, wearables now infiltrate almost all aspects of everyday life, spanning fashion, fitness and healthcare. And it’s not just consumer products: Google is considering re-launching Glass with more of a business focus while Sony’s rival product, SmartEyeglass, is already gaining traction as a business tool, including a recent Virgin Atlantic trial.

As the wearable tech market races towards releasing new platforms and products, wearable tech producers are placing an increasingly heavy reliance on their IP. All wearable tech businesses, both emerging and established, rely on their ability to harness, protect and enforce their IP. As a maturing sector, businesses need to carefully consider the legal implications involved in a variety of elements, including trademarks, patents, design rights, copyright, database rights and confidential information.

With so many components making up a wearable device, including appearance, functionality and content, there are several IP issues to consider. Wearable tech businesses need to think about what to protect, how to protect it and, given that most IP rights are territorial in nature, where to protect.

For wearable tech businesses seeking to protect their IP assets, there are three main parts of their offering to think about: the invention, the data and the product itself.

The invention

The volume of patent requests has never been higher. In 2013 Google was reportedly awarded over 2,000 US patents – a record high.

A registered patent can be an extremely powerful and valuable IP right, providing a legal monopoly for up to 20 years, so it’s worth the effort.

A patentable invention must be something that is:

  • New: not previously disclosed, anywhere in the world;
  • Inventive: an unimaginative but skilled person in the relevant art would not come up with it; and
  • Capable of industrial application.

When considering what rights to put in place around a new product, developers should consider whether anything they are doing, or indeed if any of the components making up their device, meet this test and could therefore be made the subject of a registered patent in target countries.

Software is in some jurisdictions quite difficult to make the subject of a patent, but source code will be protected by copyright laws provided the code is original. However, it will not permit its owner to prevent the replication of functionality if the new program is coded from scratch. Wearable tech firms must ensure that their source code is kept confidential and that they are the owners, especially where third-party developers have worked on the coding.

The data

Protecting the rights to your technology is one thing, but considering how you will go about protecting the masses of data that it harbours is of equal importance.

The data collected by an Apple Watch could be aggregated, anonymised and sold to medical or actuarial businesses. Equally, it could be used for targeting future products and apps. As such, data needs to be considered as an asset in its own right.

There are a couple of options for businesses to choose from for protecting databases hosting this highly coveted data. The definition of a database is rather wide and the term can extend to cover things such as intranets or document management systems.

Copyright law can protect databases indirectly, protecting the creative arrangement of the data. Databases can also be covered directly by database right, an independent right introduced by European legislation that protects the investment in obtaining and collating the data.

When it comes to the data itself the only right that can be exercised is the right to confidence. Information not already known or disclosed to the public must be kept confidential and it must be made clear when passed on that first it is confidential information and secondly it is being imparted in confidential circumstances. Disclosing this information or data without permission is a breach of confidence that could see the disclosing party in court facing an order that they pay damages to compensate the owner.

The product

Another important aspect of IP is a product’s branding and design. For many consumers, the decision as to which product they purchase may ultimately come down to which brand they prefer. The brand can be an incredibly valuable asset and makes branding just as important, if not more integral, to the success of a product than the technical specifications.

A wearable technology business may want to protect its brand by registering a trademark. To do this successfully the brand must be capable of graphical representation, must not be purely descriptive and there must be no other identical or similar marks existing in the relevant territories for similar goods or services. A global wearable technology business should ensure that it has a worldwide strategy for trademarks, filing in all jurisdictions that matter.

When it comes to the look and feel of the product itself the relevant IP is design right, which comes in both registered and unregistered forms in the UK and EU and protects the aesthetics of the product. Registered design rights can last up to 25 years while unregistered rights last up to 15 years. In order to comply the design must be new and not purely functional.

Establishing ownership of designs is crucial. Externally contracted designers should provide IP assignments and a product’s design process should be carefully documented so that the date of design creation can be authenticated. Where possible, designs should be registered to enhance protection.

Ultimately, IP value is intrinsically linked to all wearable technologies. As increasing amounts of personal data – or as the European Commission calls it, ‘life data’ – is acquired through these devices there will be a growing desire for businesses to understand what IP rights they own and how to protect them in their dealings with third parties.

No one really knows what wearable technology will enable us to do in the future, but as the IP arms race quickens it’s clear that businesses should prepare to navigate through a set of legal and security-based hurdles.

For more information, please contact Emily Nuttall or Nick Allan.

This article first appeared in Intellectual Property Magazine.