The Internet of Things: The Basics

Authors: Kenie HoMatthew J. HlinkaChristopher C. Johns
Editor: Adriana L. Burgy


The Internet of Things, or IoT, is the latest development in our society’s evolution into a futuristic utopia. At its most basic level, the IoT consists of three elements:

  1. An Internet-capable device with a sensor;
  2. A wireless network connecting these devices; and
  3. A system that can store and analyze the data these devices collect.

IoT potentially affects nearly every detail of our lives, from connecting utility meters for real-time nation-wide analytics of water and energy usage, to deploying connected microphones city-wide to help police listen for gun shots and identify where the firing gun might be located. Anything with an on/off switch is a potential IoT device.

With the dawn of this new technological frontier, one would expect a surge in IoT patents. That is true for many hardware-based technologies, but recent developments in U.S. law have made patenting difficult for software-related IoT innovations.

IoT Challenges

The patent eligibility threshold is one of the biggest challenges for the IoT. By statute, a patent may be obtained for “any new and useful process, machine, manufacture, or composition of matter.” Courts, however, struggle applying this rule to software-related technologies. In June 2014, the U.S. Supreme Court decided a landmark case, Alice Corp. v. CLS Bank International, and set forth a two-step test for determining patent eligibility:

  1. Determine if the invention is an “abstract idea,” such as an algorithm, mathematical formula, or fundamental economic practice.
  2. If the invention is an abstract idea, determine whether the inventive concept is something “significantly more” that makes the abstract idea patent-eligible.

Patenting IoT

Can you still get a software-related IoT patent under Alice? Yes, but patent applicants may need to focus patents on narrower areas of protection. Patents that are too broad may be invalidated as “too abstract.”

One approach is to specify the use of particular hardware or tangible elements. By limiting claim coverage to a particular set of devices and a particular environment, even a software-related invention can be patent eligible.

Another approach is to provide specific operations, e.g., detailed algorithms. Trying to broadly patent straightforward steps in a software algorithm runs the risk of invalidating any issued patent, but by specifying, for example, the particular—and perhaps novel—steps, a patent is more likely to meet the Alice test.


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