The Apple Watch was only released in April this year, yet Apple has already announced the Apple Watch 2. It seems, then, that Smartwatches, are leading the way in wearable tech, and this is likely to continue in 2016, with the digital watch titan, Casio, also set to launch its own smartwatch.
Enormous growth is predicted for the wearable technology sector generally over the next few years and CCS Insight predicts sales to increase globally to 135 million by 2018.
However, wearable technology is not limited to smartwatches. Google Glass was withdrawn as a consumer product, but it may be re-launched soon with more of a business focus. Glass’s Sony rival, SmartEyeglass, is already gaining traction as a business tool, including a recent Virgin Atlantic trial.
Pure fitness and health devices like Fitbit and Jawbone are also increasing in popularity, and Google may even be releasing a prescription-only medical wristband for patients. High-tech clothing products are also available, such as the Ralph Lauren smart polo shirt that monitors heartbeat, respiration and stress levels or Sensoria’s smart socks.
Wearable tech businesses, as with other technology businesses, have a heavy reliance on their intellectual property (“IP”). The difference between a successful wearable tech business and a failing one, may well be its approach to harnessing, protecting and enforcing its IP. In that regard, there is a bundle of overlapping IP rights to consider, including copyright, database rights, trade marks, patents, design rights and confidential information.
Here are some useful practical tips on how businesses entering this space can protect their IP assets, categorised as (i) invention rights, (ii) data rights and (iii) product rights.
Wearable tech products, from the hardware’s monitoring sensors, to the software that manipulates the resulting data and provides an end-user experience, are undeniably smart.
Developers should consider whether anything they are doing amounts to a new invention that could be made the subject of a registered patent in target countries. A registered patent, while expensive to obtain, can be an extremely powerful and valuable IP right, providing a legal monopoly for up to 20 years.
But not everything “clever” can be patented. A patentable invention must be:
- New: not previously disclosed, anywhere in the world
- Inventive: an unimaginative but skilled person in the relevant art would not come up with it
- Capable of industrial application
Bear in mind also that software is generally not considered patentable in the UK and EU.
However, source code will be protected by copyright laws instead, provided the code is original. It will only protect the code itself, but not entitle its owner to prevent the replication of functionality, if the new program is coded from scratch.
Wearable tech businesses should take every care to ensure that their source code is kept private. They should also ensure that they actually own the copyright in the code since, by default, sub-contracted or commissioned developers (who are not employees) will own the source code they create, unless the contract states otherwise.
Much has been written about data protection from the perspective of the customers of wearable technology, but wearable tech businesses should think about that data as an asset in its own right. The biometric data collected by an Apple Watch or smart polo shirt could be aggregated, anonymised and sold to medical or actuarial businesses, or it could be used for targeting future products and apps.
A database can be protected either indirectly by copyright law or directly by ’database right’, an independent right introduced European legislation. Both rights prevent third parties from copying or extracting a substantial part of a database without permission.
For copyright, it is the creative arrangement of the data that is protected; for database rights, it is the investment in obtaining and collating the data. Usefully, the definition of what counts as a database is wide, and things that are not traditionally considered ‘databases’ may be covered, e.g. intranets or document management systems.
But what about protecting the data itself? The only right that can be said to protect the data itself is the right to ‘confidence’. Information not already known or disclosed to the public must be kept confidential if it is made clear, when passed on, that (i) it is confidential information, and (ii) it is being imparted in confidential circumstances. Anyone seeking to disclose or publicise such information or data, without permission, would be in breach of confidence and could be stopped by a court injunction, or may have to pay damages to compensate the owner.
A wearable technology product’s branding and design can be more important to its success than its technical specifications. Whether you wear a smartwatch with watchOS or Android Wear probably depends on you being a fan of Apple or Google, which just happen to be the two most valuable brands in the world.
A brand is usually best protected by registering a trade mark, which gives the owner a territorial monopoly for that mark, for specified goods and services. For example, a wearable technology business might want to register its brand for:
- Medical instruments (class 10)
- Clothing, footwear and headgear (class 25)
- Sporting activities (class 41)
Once granted, protection can last forever, provided that use is continuous and renewal fees are paid. In order for a trade mark to be registrable, however, it must be: capable of graphical representation; distinctive; and not purely descriptive. There must also be no other identical or similar marks existing in the relevant territories, for similar goods or services; which could include unregistered marks with sufficient reputation. A global wearable technology business should have a worldwide strategy for trade marks, filing in all jurisdictions that matter.
What the product actually looks like is clearly key for wearable technology; from the consumer and legal perspective. This is the market where fashion and technology combine: as Alan Dye, Apple’s head of User Interface Design put it, “if you’re going to put something on your body and wear it and it’s going to be on your wrist, we can’t not pay attention to that.” The relevant IP right is design right, which comes in both registered and unregistered forms in the UK and EU. Design right protects the aesthetics of a product. The design must be new, and not purely functional. It can last up to 25 years if registered or 15 years if unregistered.
As with the creation of copyright works, ensuring ownership of designs is crucial. External contracted designers should provide IP assignments and a product’s design process should be carefully documented so the date of design creation can be authenticated. Where possible, designs should be registered to enhance protection. Given the potential importance of the design of a wearable technology item, in staving off competition, such practical steps can be of real, tangible value down the line.
There is a suite of IP rights involved in a wearable technology offering which, properly harnessed and understood, often constitute the real value of the business. IP rights can be monetised in a number of different ways, depending on the business model adopted:
- Licensing to third parties for certain purposes
- Assigning rights that are no longer useful to the business
- Using rights, and keeping them protected (registration or confidentiality)
- Enforcing rights against third parties, in cases of infringement
It is usually through a combination of these that a business carves out its niche and thrives, but it can only do so if it first understands what IP rights it owns, and how to protect them in its dealings with third parties.
Emily Nuttall and Nick Allan, associates at technology and digital media law firm Kemp Little