Many in the tech world and Washington have railed against the encroaching and limiting effect of patents on innovation, but when the chips are down, IP and patents remain key cornerstones in how tech companies and their founders are making sure they will be able to build their businesses and stick around for the long haul. Tony Fadell, the legendary former hardware supremo at Apple and now CEO and co-founder of new smart home device startup Nest, today revealed that Nest already had 100 patents granted, with 200 more on file with the USPTO and another 200 ready to file.
“At Nest what we did was make sure that we are putting [effort in] a ton of patents,” he said on stage today at the LeWeb conference on Paris. “This is what you have to do to disrupt major revenue streams.”
Nest, which first hit the market last year with a smart, design-friendly thermostat that you can control remotely with an iPhone app, this year added to its range with a smart smoke and carbon monoxide detection and alarm system. But the company has also had its share of patent heat.
It has been embroiled in a thermostat-related patent infringement suit brought by appliance maker Honeywell initially in February 2012, and in November 2013 saw another patent suit get filed from BRK, makers of the First Alert smoke alarms, for infringements related to Nest’s second product.
Nest has also taken steps to buy insurance from elsewhere to shore up its patent position. In September it announced a deal with Intellectual Ventures — one of the most well-known of the patent hoarders — for access to some 40,000 patents via IV’s “IP for Defense” subscription-based product. Nest can draw on these patents as a defendant or in the event of a counterclaim — as it happens to be in the case of Honeywell.
Part of the IV deal also included the acquisition of an unspecified number of patents, “in areas of interest to Nest, including systems and methods for automatic registration of devices.” It is unclear whether Fadell’s patent citation today — totalling some 500 in all if you count granted patents, those waiting approval, and those yet to be filed — include the patents that Nest would have picked up from IV.
You might argue that part of Fadell’s bullishness about patents comes out of necessity because of these suits, but on the other hand you have to remember that he comes from Apple, one of the most aggressive technology companies when it comes to using patents to defend its products, and also filing a lot of them almost as a smokescreen to mask what it may be planning next.
Patents are not the only game in town, of course. In talking about what he saw as important elements of building a business, Fadell also touched on the challenges of hardware startups, and the pitfalls of Kickstarter. You can get a lot of public support (and even financial support) for an idea, but “if you do not plant the seeds early enough” for how you will manufacture and distribute that concept at scale, he said, you will not go anywhere. (Yes, he said this last year at LeWeb, too.)
The other area that Fadell believes we are seeing a shortfall is in how disruptive products are being marketed to consumers.
“You have to communicate what the problem is and what the benefit of the solution is,” as well as giving people an easy way to purchase it, he said. That is part of how you build trust for new, intelligent devices. “If people cannot trust our brand, our things will never sell,” said Fadell. “The ‘Internet of Things’ will never take off if people do not trust the products.”