Japan Institute für Promoting Invention and Innovation

Innovation at IoT age in Japan, US and Europe
Tokyo, 2017-02-10

Challenges for Innovation in the
21st Century –a European Perspective
Dr. Bertram Huber
Rechtsanwalt,
IP*SEVA, Backnang (Stuttgart)

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)1

Topics
New terms – fundamental change Impact on economy and business A different society?
 Where are the markets?
 Effects on the intellectual property system Need for collaborations
 Conclusions


09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)2

New Terms, Acronyms
 IoT

 AI Big Data 3D printing
 GMO
 Industry 4.0
 Society 5.0

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)3

Industry

Source: Christoph Roser at AllAboutLean.com

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)4

Dramatically Increased Connectivity
 2010:5 billion connected peolpe 2020: 26 billion

connected things

Max Olofsson
Avanci, 201609.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)5

Digital India
 Today: 1 billion mobile subscribers in India
 Digital Farming („more crop per drop“) Health care to all Upgrade education continually

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

6

Disruption
By 2018, 33% of industry leaders
will be disrupted by digitallyenabled competitors
IDC, IoT and Digital Transformation, 201609.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

7

Profound Change
New digital business models are
the principal reason why just overhalf of the names of companies onthe Fortune 500 have disappearedsince the year 2000. And yet, weare only at the beginning…
Pierre Nanterme, CEO Accenture, 201609.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

8Complete Transformation
Big Data:
A revolution that will transform
how we live, work and think
Mayer-Schönberger/Cukier, 201309.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

9

Big Data and Artificial IntelligenceData transform industries and professions
 80% of all data is invisible to today‘s computers 85% of data is unstructuredComputing is entering a new cognitive area
 Computing to understand and learn

 Impact of Artificial IntelligenceProducts as such become capable of learningby themselves

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)10

Hope and Challenge
It is not the strongest of thespecies that survives, nor the mostintelligent that survives. It is theone that is most adaptable tochange.
Charles Darwin
1809 - 1882

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)11

Impact on Economy and Business

Internet of Things: connecting information technology(ICT) with operational technology (manufacturingindustry)

Relevance of services will grow exponentially Which services?
 New, disruptive digital business models


Who will be the core players?

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

12Germany‘s Position in Industry 4.0
Germany presently holds a leading position inIndustry 4.0
 Closely followed by the USA: platform economies ofSilicon Valley Internet companies, innovative start-ups,risk capital And by China: Government initiatives “Made in China2025” and “Internet plus”
 Japan: …
Recent analysis of the German National Academy ofScience and Engineering, Acatech, 201609.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

13

Standardization
Interoperability by means of a joint international
infrastructure must be standardized
 International means global!

It will likely not pay off to focus on proprietary solutions
instead, and certainly not alone

When debating details of standardization, lessons
learned from ICT FRAND licensing should be taken intoaccount Contrary to the general perception, ICT FRAND licensing
is spectacularly successful with probably 95% ofagreements concluded without dispute

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

14

New Business Alliances Needed

Already many examples
 Bosch with SAP
 Bosch with GE

 Schaeffler with IBM
 And many, many moreNotably, many cross functional alliances andcollaborations required Across industries
 Across technical fields

 In science, across faculties

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

15

Complexity Increasing
No single solution can handle the amount of complexity
 Combined and multifaceted approaches are neededIndustry 4.0 requires Management 4.0
 It is not enough to delegate responsibility to CTO „Fast failure“ culture: fail often, fail better

will be a powerful accelerator of migration to 4.0

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

16

New Paradigm for Ownership
Clear differentiation between hardware product andservices to vanish Opens opportunities for small and large companies butequally for start-ups
 How to identify respective opportunities?
 Take product (virtually) apart into all its relevant functions
 New perspective will open eyes to new possibilities ofcombinations of product with services
 Change perspective from individual product towards
network oriented functional perspective

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

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Identifying Innovations Early
Often difficult
 Examples: Hybrid car Hydrogen powered car
 …

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)18

Wrong Cost Calculations to be Avoided
When comparing technical alternatives, we must look atthe overall cost impact
 Looking only at the specific market price, while
disregarding later follow-on costs, results in distorted
judgment Unavoidable follow-on costs will have to be paid later –perhaps not by the enterprise as such, but by society,i.e., typically, by the taxpayer

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

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Risks

Security Data as such Paralyzing whole factories or, worse even, public utilities

Growing DDoS (distributed denial of service) attacks,
resulting in overloading and paralyzing websites
 Connecting IoT devices into botnets, e.g., Internet routers,

surveillance cameras, digital VCRs, etc.
 Often no servicing, no software updates

Privacy

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

20

Optimism
Many years of super growth
lie ahead of us
Alain Madelin
Former French Minister for Economy and Finance2016

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

21

A different Society?

Growing unemployment
 47% of total US employment at risk

Frey/Osborne, 2013
 Probably less dramatic in countries with better educational
systems, e.g., dual educational/professional training system inGermany

Protectionist measures will not help
 Demographic change: problem inEurope and Japan, not in the USA09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

22

Further Challenges
Decision-making: regulate or not?
 Society transformation: how to employ the unemployed?
09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

23

Advantages of Autonomous Driving


90% of traffic accidents are rooted in human causes(German Federal Statistical Office for 2014)

Improvement of traffic flow expected

Substantial increase of traffic security

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

24

Ethical Questions


Laws of Robotics (2058):
 A robot may not injure a human or, through inaction,

allow a human to come to harm
Isaac Asimov, 1942

2016: First meeting of Ethical Commission on AutomaticDriving, instituted by the German Federal Ministry ofTransport and Digital Infrastructure Material damage before damage to humans
 No classification of persons (regarding age, etc.)

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)25

Confront Erosion of the Middle Class

Measures to be taken
 Education and professional training
 Social Security systems, coupled with corresponding

commitment by enterprises for their employees Modernization of infrastructure More justice and fairness in the tax system
 Access to capital to be facilitated andentrepreneurship to be incentivized
Jo BidenFormer US Vice President
2016, World Economic Forum,
Davos/Switzerland

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

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Where are the Markets of the Future?
Developed countries, of course Developing countries in an increasing manner Africa in particular Promising: Japanese focus on Africa



Leapfrogging technology generations
 Mobile communication without passing via fixed networks
 Mobile payment

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

27

Intellectual Property

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)28

Any Effects on the IP System?
Ownership of data?

Who is allowed to use the data and for what purpose?

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

29

E Class Mercedes 2016 Model

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)30

Economic Relevance of the IP System
In the USA, 38 % of the economy
are IP intensive industries, where
45 million people work
Robert Slifer,
USPTO Deputy Commissioner
2016

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)31

Sufficient IP Protection?
Many new, additional business opportunities

Successful new business models are often only loosely
covered by, e.g., copyrights but not easily by patents

Business model protection to be revisited?
 Or deliberately not, in the interest of more competition?
09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

32

Challenges: Need for Collaborations
Mankind, world have existential problems:climate change All brilliant brains needed from all parts of the world

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

33

Buildings Alone Consume…
40% of global energy

25% of water

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

34

Demographic Development
World Population

billion8today

7654
3
2

10
1600

9 March 2017

1700

1800

1900

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

2000

35

Open InnovationOften misunderstood Open Innovation is not equal to Open Source Open Innovation aims at eliminating the ubiquitous„not invented here“ syndrome Cognizant of the fact that, as good as a company may be, there
will always be a higher number of brilliant experts in the relevant
technical field outside than inside the company

Access to jointly or severally generated results must
accommodate the specific interests of the parties
 As in technical collaborations generally,
all types of arrangements are possible

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

36

Conclusions
Fundamental change will impact all of us Companies to consider now areas of necessary change
in their business Organizational
 Mindset, company culture New business opportunities
 Collaborations and alliances

Profound debate in society about imminent changes,
involving all groups of society, necessary Intellectual property and competition law, as well asother regulatory fields, need attention
 It is all GLOBAL – with challenges andunprecedented opportunities


09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

37

Act Now!
A man who dares to waste onehour of time has not discovered
the value of life
Charles Darwin
1809 - 1882

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

38

Thank you very much for your attention!
Huber@IPSEVA.com
IP-LAW@huberb.de
www.IPSEVA.com

North America Partner Office:Los Angeles, CA, USA
Cannady@IPSEVA.com
Asia Partner Office:Tokyo, Japan
Kuji@IPSEVA.com

Intellectual Property for Sustainable Energy Ventures

IP*SEVA is a partner of

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

39

Intellectual Property for Sustainable Energy Ventures
Core focus on IP Strategy, Technology Contracts,
IP Education
 (Non-exclusive) Concentration on Sustainable Energy
and Environmental Technologies
 International Network Business Opportunities:

R&D Collaborations, Investment
 Law firms, esp. Patents, Corporate, Tax,Regulatory issues, Venture Capital

09.03.2017

Dr. Bertram Huber, Rechtsanwalt
IP*SEVA, Backnang (Stuttgart)

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