The wearable technology industry is booming, with thousands of new innovations being incorporated into clothing, electronics, and accessories. According to industry reports, the wearable technology market is expected to reach over $50 billion by 2022 with an annual growth rate of over 15 percent. Additionally, a $5 billion sensor market is predicted to help drive a $160 billion wearables market through 2028.
The wearables ecosystem is far-reaching and includes product manufacturers, research and development associations, component manufacturers and suppliers, software solution providers, and end users. Given the developments in the wearables industry, everyone should focus on patents to protect innovations and gain a competitive edge in the growing market.
Healthcare and Wearables
Healthcare is becoming a high priority for device manufacturers, app developers, and apparel and sensor vendors alike. Wearable technology is being used to provide a wide range of health data to doctors, healthcare providers, and consumers looking to better manage their health and disease treatment.
Healthcare providers can collect data from patients to monitor recovery at home, ensure medication adherence and efficacy, and manage clinical trials for new drugs and medical devices. In the hospital, wearable advancements have improved communication through hearables, or wireless computing earpieces, and brainwave-reading technology. Wearable assistive devices, such as exoskeletons, exosuits, and prostheses are improving quality of life and enabling persons suffering from various injuries or ailments to live more independently.
Smartwatches are also gaining greater medical functionality, allowing for a broader range of sensors and tracking of more complex health metrics. Life insurance and health insurance companies looking to gain a better picture of the overall health of their insured will offer subsidized activity trackers and smartwatches in exchange for the sharing of health data. Tomorrow's wearables will become more fully featured and multi-functional, spanning health and fitness to communications and productivity.
hospital and home settings. The impact of wearables improving the patient experience and outcomes through continuous information to doctors and patients is just beginning,” said Brian Rosnov, Senior Managing Director and Co-Founder, Philips HealthWorks. The wearables industry shows no signs of slowing down, and wearable innovators need to maintain a competitive edge through a strategic patent portfolio that focuses on protecting the core technology, exploring new patent areas, and establishing worldwide patent protection.
Smart Patent Strategy Drives Growth
A strategic patent portfolio protects a wearable company’s core technology, which in turn helps secure funding and establishes a competitive advantage in the marketplace. Industry analysts claim that a start-up has about a 2.5 times greater chance of achieving success within 10 years of VC investment if it holds patents before the investment.
Patents are extremely important for wearable companies in all stages. For early-stage companies, patents are often the only way for investors to place a value on a company’s technology during development. In this way, patents can make up a significantly greater portion of enterprise value for early-stage companies. As a company grows, patents become the currency to secure financing through venture capital or private equity investment. Patents can also lead to collaborations, joint ventures, and licenses with strategic partners.
A Strategic Patent Portfolio Ensures Commercial Success
For early-stage wearable companies, the key is to develop a strategic patent portfolio that has comprehensive patent coverage around the company's innovations. The core technology must have adequate patent protection to provide flexibility and room to operate in the crowded market. To obtain broad patent protection, companies should file an initial patent application covering the core technology, followed by additional patent applications covering key improvements.
Wearable companies should consider both current and future business objectives and analyze ways that competitors may attempt to design around its patents. Wearables must interface with the body in ways that allow them to sense and measure useful parameters, while still maintaining comfort and style. Further, the functionality of wearables will only increase as developments in connectivity (e.g., mesh networks, IoT) and power management will better enable healthcare providers to remotely monitor patients and control treatment and drug delivery.
Wearable technology is complex and multifaceted, which can make patenting challenging. Developing a strategic patent portfolio includes filing claims covering the entire system (in particular, how various sub-systems work together to tackle complex problems in novel ways), as well as key components, control systems, disposables, apps, methods of use, and any other valuable aspects of the invention. Design patents can also provide protection for the ornamental appearance of wearables.
As wearable companies continue to improve their core technology, they should patent incremental improvements to form a “picket fence” of protection around the core technology. By filing patent applications that cover incremental improvements, wearable companies can expand their presence in the market and grow their patent portfolio as their technology improves and adapts to consumer preferences in the mainstream market.
Cross-Licensing Creates Opportunities to Collaborate
In a populated field like wearables, with thousands of innovations entering the market each year, cross-licensing with competitors can be another way to build a patent portfolio. Cross-licensing opportunities arise when companies have overlapping patents, and practicing one patent infringes another patent owned by a competitor. With cross-licensing, two companies can mutually agree to share patents without the exchange of license fees and with a promise not to sue.
Keeping Wearables on Track for Success
As wearable innovations continue to enhance and shape healthcare and the way we live, innovators must focus on protecting their inventions. By building a strategic patent portfolio that has worldwide patent protection, innovators can thrive in the growing wearables market.
About the authors
David J. Dykeman, is a registered patent attorney with more than 20 years of experience in patent and intellectual property law, and co-chair of Greenberg Traurig’s global Life Sciences & Medical Technology Group. David's practice focuses on securing worldwide intellectual property protection and related business strategy for high tech clients, with experience in wearables, medical devices, robotics, nanotechnology, life sciences, and information technology. David can be reached at [email protected] or (617) 310-6009.
Todd C. Basile is a registered patent attorney in Greenberg Traurig’s Dallas office. He focuses his practice on patent portfolio development and counseling, and is experienced in a wide range of industries, including wearables, robotics, medical devices, unmanned aircraft systems (drones), nanotechnology and software. Prior to becoming an attorney, Todd was a flight technology engineer at Bell Helicopter. He can be reached at [email protected] or (214) 665-3640.