The electronics industry is by and large dominated by a volume market, where innovation largely occurs incrementally and there is a number of big players with innovation departments and budgets to match. That means a smaller enterprise looking to carve out its own space in the market must keep innovating to stand out.
In our experience, a smaller player with strong IP can present a serious challenge to the big boys. IP disputes between the larger players very often get resolved through negotiation, but smaller firms that can robustly defend their commercial activities can also enjoy considerable success.
Some people argue that IP protection can curtail collaboration in new technologies such as autonomous driving. In that industry, though, the real barrier arguably is the lack of infrastructure to fully promote innovations. Electric vehicle companies such as Toyota and Tesla have released some of their patent portfolios for royalty-free use (with conditions). There is debate as to their motivation for doing this; but the business rationale is likely to be that they wish to encourage growth of the marketplace as this probably will lead to dividends for them in the end.
While robust IP protection requires funding, it should really be seen as an investment as opposed to a mere cost. It needn't always come at a high price either. There are many resources available to smaller firms from the UK Intellectual Property Office (UKIPO), that will very often give guidance and support to SMEs for free. What's more, electronics businesses won't always need to seek the highest level of protection through a traditional patent. Different levels of IP protection are available to suit different requirements and indeed budgets, meaning businesses can tailor a regime of protection accordingly.
For example in contrast to a patent, which lasts 20 years, a 'petty patent' is a shorter-term and often cost-effective way of protecting invention. Petty patents are available in more than 50 countries including France, Germany, the US, Japan and China.
Such protection is not currently available in the UK however. The current regime for patenting in the electronics industry is well established in this country, with little change on the horizon likely even though it can be hard to obtain full patent protection for some algorithm-based inventions. At a time when global AI patent activity is significantly increasing, often using known AI building blocks applied to new areas, further innovation could be unlocked in the UK if this shorter-term option for fast-moving and shorter lifespan developments was available.
Ultimately, some hands-on innovators may be reluctant to work with professional advisers, especially when budgets are tight. In our experience, however, those who truly grasp the extent of their IP and take appropriate steps to safeguard it from competitors stand best placed to reap the innovation rewards over the long term.
Saiful Khan is a partner and electronics industry specialist at IP law firm, Potter Clarkson
