The Internet of Things (IoT) is transforming industries like manufacturing, agri-tech, energy, and healthcare
But who actually has ownership of the Intellectual Property (IP) of Internet of Things (IoT)* software that you are developing to connect your tools and equipment? With the rise of Industry 4.0 boosting organisations’ productivity, IP ownership has never been so important to understand.
As software engineers who create client-owned digital IP, MyOxygen often come across clients entangled in an unclear IP ownership situation.
Here is what you might not know regarding IP, IoT, and software
IP is a curious thing in software. Ideas of the mind usually legally belong to their creator.
In software development, adopting the creator-owner model can result in “vendor-lock”, with precarious situations developing in which you, the client, remain dependent on a software developer that retains ownership of your software’s IP. Not ideal.
With connected devices, it can be better though. This is because it’s much harder to replicate both the software and your hardware.
You own the device you want to connect to. You own the hardware. So if your hardware is protected, no one else can replicate the value you’re generating with the software.
However, it’s by no means a guarantee that most software developers will give you the IP rights to the software they build for you.
How IP generates value
Not having the IP rights to the software that your business relies on, matters. From added costs to unhappy clients to unconvinced investors, IP ownership (or your lack of it) can have huge repercussions.
If your software has well-chosen performance indicators and delivers a good and useful experience to your users, it’s a value generator.
In combination with your connected devices, smart, outcome-driven digital IoT software can help you:
IP also has the power to:
But as soon as IP rights are brought into question, spiralling costs required to make changes and long project delays can result.
Industry 4.0 - The Fourth Industrial Revolution
The implementation of IoT software, analytics, and machine learning in manufacturing and other key industries is so massive that it’s being compared to the introduction of steam power.
Imagine a network of factories heaving with sensor-laden equipment. These sensors collect a huge variety of data. That data can be used to reduce the cost of running the equipment.
Machinery is fixed before it breaks down. Automation increases. Processes are optimised. They become safer. Visibility is total. Everything can be overseen from a distance.
Information that used to be siloed – data from your supply chain, sales, customer service departments – can be integrated. Decision-making advances by leaps and bounds.
It’s hard to overestimate the impact this is having and will continue to have. It’s not being referred to as 4IR or the Fourth Industrial Revolution for nothing.
Choose a partner you can trust
The digital IP rights to your IoT software can generate and add immense value to your organisation. This makes it vital that you can trust the partner you are developing it with.
Explore what their policy for IP transfer is early on. Make sure the transfer of ownership is documented.
Consider funding
Banks such as NatWest offer commercial loans against the value of intellectual property (**Fintech Finance News, 2024). Loans can be secured against up to 50% of the value of the firm’s intellectual property – software, patents, copyrights, trademarks and registered designs – as determined by the bank’s specialised IP valuers and their tailored systems and processes. These loans hint at the potential that unlocking value from IP and intangible assets could have for the UK economy. In the 20 years during which MyOxygen has partnered with organisations like the NHS, MoD, OVO Energy, and many others, we’ve seen how things can go wrong.
We’ve also seen how the creation of value-driven, client-owned? digital IP has empowered organisations to take advantage of everything Industry 4.0 has to offer.
*IoT refers to the connection of traditionally non-digital equipment to the internet or private networks.
**Fintech Finance News, April 29, 2024. Article accessed here: https://ffnews.com/newsarticle/fintech/software-company-sci-net-secures-first-ip-backed-loan-from-natwest/
How does your organisation plan to implement Industry 4.0?
Want to talk about your next software project??
Get in touch with Emma Gregory, Head of Growth at MyOxygen: [email protected]