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Thursday, September 12, 2013

Intellectual Property Considerations when Evaluating a GPS Fleet Tracking System

Intellectual property and prior art are key factors when evaluating
GPS Fleet Tracking system providers.
Written by Thomas L. Grounds: If the adjective 'tried and true' is a notion you're familiar with - then consider how that may apply to your GPS Fleet Tracking system provider.

As a business develops products and services in the marketplace, it develops insight into how their customers operate, and how to most efficiently and reliably approach solutions.  Over time, they can develop a significant amount of intellectual property and 'art' in the market-space; some of which can be patented.  Anything not patented still has standing as 'prior art', or 'trade secrets'.

There has been some discussion in the media lately about intellectual property and patent trolls, which has set off some heated dialogue about the additional costs to businesses licensing patented technology of this sort.  

In the US, patents cannot be filed by corporations, they can only be filed by individuals or groups - though, corporations can acquire patents from these individuals.  Patents were originally awarded so that developers could have time to develop their ideas in the market without being pushed aside by larger forces.  It also gave them the right to license the technology so they could benefit from being an innovator.
'Flash of Genius' is a 2008 American
biographical movie about Robert Kearns and his
legal battle against the Ford Motor Co when
he developed and patented the
 intermittent windshield wiper.

However, not all competitors are willing to wait for the patent to expire, or to acquire a license, especially if the market is large and lucrative.  They may choose to infringe now, and wait out the patent holder - as in the movie "Flash of Genius".

Filing against an 'infringer' in the court system, usually (but not always) a corporation, can be difficult if the individuals holding the patent do not have funding and/or legal staffing to go up against potentially large companies with deep pockets; especially if the patent field is fairly technical, and there are a number of other patents in the same space, or if there is a lot of 'prior art' in the field.

So, in many cases, developers, designers, or engineers who have good ideas, who filed early and have been able to create the requisite models, demos, or systems to support their patent claims - but without the funding to carry them forward against the 'Goliaths' of their industry, feel that they are forced to either settle with the infringers on terms that are not necessarily beneficial to the patent owner; or they must team up with a patent troll for a potentially more favorable outcome.

Patent trolls typically buy up several patents in a particular market space, and then with large amounts of capital go head to head with leaders in a particular market.  They have the staff, and the funds to make sure that the 'Goliaths' can't just crush them in the court system.  Patent trolls may seem like a boon to small entrepreneurs going up against behemoths; but they can sometimes turn their patent portfolios around and use them as leverage against individual patent holders to get a larger portion of the profits.  They're no angels.

Because the purchase of the patent rights is mostly speculative, and the expenses of going up against such large entities varies but can be quite sizable (and risky) - patent trolls end up with the lion's share of the revenue from any licensing agreement.  80% is typical depending on the financial status of the developer, and how narrow or wide the patent coverage is on a particular market and how large their existing portfolio is.  This may or may not be comparatively beneficial to the original patent holder - especially if the idea is worth millions, if not billions in the marketplace.

So when I hear that we need new laws attempting to control 'patent trolls', it sounds to me like large businesses being resentful of the rights of patent holders, and/or poor behavior on the part of the patent trolls that are leveraging to enforce those licenses in court.  

I agree that the patent system - which was originally designed to give individuals a fighting chance against large businesses with deep pockets, is broken.  And while I don't personally believe in working with patent trolls; if carefully managed they can be effective sometimes, especially when the alternative is potential bankruptcy for the individuals going up against big business with no intention of negotiating.

So, how does this reflect back toward the GPS fleet tracking industry?  While portions of the science seem fresh and new to users, the technology has been around for a fairly long time - since the early 90's (or earlier if you consider Loran communications systems providing location over private 800MHz radio); and some of these early systems existed in the 'cloud' at that time; some written in Java to live on the Internet, even before 2001.

So you may want to look for companies that have been in the business for many years (or that have been 'rooted' in the science for more than a few years), with patents on their inventions (licensed or not), and with years and years of 'prior art' which can act as a form of protection - to the company, as well as their clients.
  
Prior art can be helpful in that even if the company doesn't own patents on all of it's techniques (such as geo-fence alerts), if it's use of the technology pre-dates patents in the industry, then it cannot be forced to subject to licensing.  There are several patent trolls looking for geo-fence infringers in the industry - and even though some of the new ad systems utilize geo-fencing in new and interesting ways, they are still using the same basic concept of setting up a fence around an object, and using a GPS tracking device to forward that data and make the comparison - and alerting the customer.

Newer companies in the industry may have a novel or new way of presenting location data, but since the data gathering techniques have been around for a long time, they are likely subject to licensing of these former patent holders - and that generally means, higher services or product pricing for companies that don't have the significant history in the market.

So if you are looking to keep your costs down, look at businesses that have a significant amount of time in the GPS Fleet Tracking industry, as well as patents, prior art and trade secrets that create a solid base of technology from which to build the next generation of GPS tracking innovative products and solutions. 

'Tried and true' is not just important indicator with regard to intellectual property - it's also a key to long term reliability in the market.