Prototyping an IoT platform for automated IP licensing payments
12/06/21
< Project overview >
Introduction
This project proposes to implement a DLT (distributed ledger technology) for automating licensing management in the IoT industry. Despite the recent drive in digitisation and automation of manufacturing processes and companies management, license agreement management for intellectual property (IP) remains a mainly manual process, prone to human error and constrained by quickly unbearable complexity.
Particularly for manufacturing and selling electronic devices, manufacturers/OEMs are potentially burdened by the cumbersome task of managing many different agreements, for each of their manufactured products, by keeping track of the royalty base values, computing the correct amount and paying their licensors. On the other hand, licensors have to trust licensees and how they computed royalties, or rely on expensive audits that are often too long and not affordable for smaller companies, plus these can negatively impact relationships.
To alleviate these two problems of complexity and lack of trust, both parties are often forced to resort to only employ simple licensing agreements, missing out on potentially fairer remuneration for the considered IP.
To solve this issue we proposed and implemented a DLT based system, called ALPS, that allows for accountable, enforceable and transparent licensing agreements. Such a solution is possible by translating licensing agreements into smart contract bundles (smart licenses) that are then deployed and executed on a permissioned DLT.
Project aims
The aim of the ALPS mini-project was to address the unsatisfactory status quo in the largely manual and error prone intellectual property (IP) management field by providing an automated licensing payment and management system based on smart licensing agreements. This goal has been achieved by developing a demonstrator prototype of a distributed ledger technology (DLT) solution as a trusted computing platform to automatically track, secure, and enforce licensing agreements. This allows for license agreements to be cheaper, more fine grained, and more complex, as their execution is delegated to the DLT, easing the burden on the participants.
Moreover, the ALPS technology enables novel business models (eg pay per use models) as the license agreement’s visibility is extended to the entirety of the DLT. This means that, if product usage information is accessible by the DLT, then novel licensing models, eg outsourcing part of the royalty charges to users, become possible.
What was done?
The main efforts during this project have been directed towards better understanding the problem at hand and building a working prototype. We have conducted several meetings as well as participating and/or organising targeted workshops with recognised IP experts (partially in collaboration with TUM – Technical University Munich). We have also run a collaborative project with a UK based SME (AND Technology Research Ltd) and an iTeams project in Lent Term.
Insights from these engagements have been helpful in directing our efforts towards the most pressing aspects of the currently inefficient IP management processes. This knowledge has been directly put to fruition in our practical work, by designing and implementing a prototype demonstrator accordingly. In particular we have completed a web and app-based simulator software, capable of providing a test environment for potential users to appreciate the benefits of our proposal compared to traditional models.
Results
Through our interviews and workshops we have been able to pinpoint the current status quo of inefficiencies and market needs.
This has allowed us to clearly define the desirable advantages for our proposed ALPS technology, as well as potential novel business models for managing licenses in the IoT industry. We have completed a demonstrator prototype as a web app simulator, capable of managing an ecosystem of licensors, licensees, and devices containing a set of different IPs as well as associated licensing agreements. The software can simulate royalty revenue streams with the passing of time, intuitively visualising the results, and allow for fast prototyping and comparison of license agreements.
Deliverables and other tangible outputs
Publications/patent
Theye, J, di Franceso-Maesa, D, and Tietze, F, ‘On-demand licensing for a fairer digital economy – a simulation study’, Technovation (under review).
Tietze, F, Di Francesco-Maesa, D, and Theye, J (2020) ‘On-demand IP licensing for the digital economy’, CTM Working Paper Series, Institute for Manufacturing. Cambridge, UK. doi: 10.17863/CAM.62025
Di Franceso-Maesa, D, Tietze, F, and Theye, J (2021) ‘Putting trust back in IP licensing: DLT smart licenses for the Internet of Things’, IEEE International Conference on Blockchain and Cryptocurrency. Virtual.
PCT patent filed on the ALPS proposal based on prior UK patent application.
Software product
Web application to realise an IP licensing ecosystem simulator.
Android app to gather data on mobile phone components usage (in collaboration with TUM (Technical University Munich).
Hardware product
We have designed and set up a three server backbone to run a permissioned distributed ledger to host a practical implementation of our proposal.
Prizes
Our project was one of the winners of the 2020 Cambridge Blockchain Prize.
Workshops
We have organised a workshop to introduce our novel concept of Bill-of-IP, titled ‘Bill-of-IP: use cases and challenges’, held virtually on 29 September 2020 with 12 participants.
Other
We have been selected as a use case project partner for the iTeams 2020–2021 cycle at the University of Cambridge.
We have been selected as an industrial partner for the Lead User Project 2020 organised at TUM – Technical University Munich.
We prepared and submitted an Innovate UK Smart Grant with a FinTech partner (total volume approx. £1 million), unfortunately unsuccessfully.
We are in the process of producing a dissemination video to showcase the ALPS technology.
One completed master thesis completed by a visiting student from TU Munich.
Two completed IDP projects from three TU Munich students.
One iTeams project at the University of Cambridge.
We have been accepted and will be participating in this year’s Impulse programme for tech innovators at the University of Cambridge.
Impact
Today’s IP services are largely offered through in-person interaction and still require many paper based transactions. Digitalising the procurement and delivery of licensing related services will result in time and overall cost reduction, while allowing the same actions to be performed with a significantly lower carbon footprint. Moreover, it has the potential to significantly widen the client base due the inexistence of physical boundaries.
This project is therefore likely to benefit the UK’s and international digital economy, the IP industry in particular and as an indirect consequence, innovators and their beneficiaries as a whole.
Next steps
We plan to improve upon the current software prototype developed as hardware infrastructure/permissioned DLT network set up to provide a full functioning client for the first test users and selected test use cases. We are currently developing a further software component to implement a dApp for users to directly access the ALPS DLT without the technical background needed to understand its underlying components.
Furthermore, we are carrying on our research and design on two key components of our system: trustable oracle data feeds and transparent financial royalty setting. We are also planning to approach industrial partners identified from the engagement with the TU Munich for a joint research grant. We have been accepted and will participate in this year’s Impulse programme for tech entrepreneurs.
Lessons learned
The interaction between IP industry experts, with practical knowledge of the field, and academic researchers, with an open mind to innovation, has been one of the main strengths of the project.
At all times we have been able to keep our theoretic proposals grounded in the real needs of IoT IP licensing. The external collaboration with TUM – Technical University Munich, has helped immensely to increase our interdisciplinarity even further. The internship sponsorship via Pitch-In helped to attract one very capable master thesis student.
The global pandemic situation has forced us to move most of our work online, thus rendering some of the originally planned industry workshops more difficult to organise, forcing us to consequently rearrange our targets mid project. In hindsight it would have been better to focus more efforts on the software prototype development since the start and less on the industry consortium building. Nonetheless, via the TU Munich engagement we finally managed to identify some high value targets for potential industrial collaborations.
What has Pitch-In done for you?
Being only one project amongst many has given us the possibility to know about the other groups’ projects, including during the dissemination Pitch-In manufacturing webinars that took place during autumn 2020. Moreover, the constant help and support from the Pitch-In operations manager to solve problems or find external partners for specific tasks has been often invaluable for the project to keep progressing.
Project lead
Dr Frank Tietze – University of Cambridge
Dr Frank leads the Innovation and Intellectual Property Management lab (IIPM) which focuses on IP issues that are of strategic relevance for technology-based firms and new technologies for reinventing IP management.
See further information on this project via the Institute for Manufacturing website.