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Industry 4.0 Heralds a Sea Change in IP Protection for Manufacturers

Smart Manufacturing, often referred to as “Industry 4.0,” refers to the fusion of digital manufacturing techniques with traditional manufacturing techniques. While there are many technologies that can be identified as playing a part in smart manufacturing, this article will focus on four that are currently receiving attention: cloud adoption, the Internet of Things (IoT), machine learning and artificial intelligence, and additive manufacturing. Successful deployment of smart manufacturing technologies can lead to faster, more efficient production that is also safer for factory floor workers. Implementation of these technologies also poses intellectual property challenges to which manufacturers may not be accustomed but that, if managed appropriately, promise great rewards.

Cloud Adoption

Cloud computing refers to the distribution of data and applications over multiple locations, allowing on-demand access to the data and applications from several locations by users. As with many other industries, manufacturers are adopting cloud-based computing techniques to enable agile manufacturing and provide real-time data to the production floor. For example, capacity loading information from several production machines, perhaps located at several different geographic locations, can be shared to a cloud so that it is accessible by a distribution unit in real time. This enables the distribution of work to production machines in an efficient manner.

Market Research Future forecasts $111.9 billion of cloud computing investment in the manufacturing sector. Manufacturers contemplating moving their production processes to the cloud should take a moment to assess whether the new process is patentable. While it may seem counterintuitive that moving an existing manufacturing process to a cloud-based platform would yield patentable subject matter, a brief survey of issued patents shows that changes necessary to modify a process so that it executes properly on a cloud-based platform can, indeed, lead to patentable subject matter. Moreover, newly-generated software routines to implement the cloud-based process are likely the subject of copyright, and protection for such materials should be evaluated.

A related issue for manufacturers moving to cloud-based platforms is the security of their systems and data. Cloud-based systems, because of their inherent interconnectedness with other systems, are susceptible to attack. In 2020, targeted ransomware emerged as a pervasive cyber threat to manufacturing. Such attacks are expected to increase as manufacturing companies adopt increasingly digital profiles. Companies adapting smart manufacturing technology need to protect their intellectual property and the resultant data that is generated. Data breach remediation is also likely to be important; information-stealing attacks make up about a third of cyberattacks on manufacturing concerns, with one in five companies successfully compromised.

The Internet of Things

The Internet of Things (IoT) refers to inclusion of sensors, processing ability, and communication technology in physical devices. IoT has already begun to change how we view devices in our homes; smart TVs, smart thermostats, and smart appliances are seemingly ubiquitous. That perspective change is coming to manufacturing as well, as several companies race to release a universal operating system for all IoT devices. Beyond the obvious changes to the manufacturing floor itself, manufacturers should be aware of two foundational changes IoT will make to their business: IoT will make protection of trade secrets increasingly difficult, and IoT will radically change the relationship a manufacturer has with the end consumer.

Traditionally, many aspects of a manufacturing line were protected as trade secrets. For example, the exact setting used for a machine to process raw material into the desired result might be something known only to the individuals tasked with running that machine. In the IoT world, that machine is interconnected with other machines, and that interconnectedness makes it a potential target for attack. Successfully compromised machines may give up their settings, preferences, and other secrets that make a manufacturing line “special.” So again, cybersecurity and data management will need to be priorities, not afterthoughts, in the factory of the future.

Looking outwardly, IoT radically changes the traditional relationship a manufacturer has with the end consumer, as it allows the manufacturer to have access to data regarding use of its end products. While collection of actual data on consumer usage is a fantastic benefit for manufacturers, it comes with obligations surrounding both the collection of that data and securing the data after it has been collected. Provided that the data collected from end users is done in a transparent, privacy-responsible manner, that data represents a commercial asset that may ultimately prove more valuable than the original business.

Machine Learning and Artificial Intelligence

The terms “machine learning” and “AI” are usually used to refer to techniques to enable machines to think like human beings. Applications of these techniques in manufacturing can include predictive maintenance, predictive quality and yield, digital twinning, generative design, energy consumption forecasting, and supply chain management. This area of technology may represent the largest opportunity for manufacturers to develop and maintain trade secrets relating to their operations. Identification of specific algorithms and the inputs provided to those algorithms to produce a desired result will differ between manufacturers, and a manufacturer that hits on a constellation of choices that results in superior performance will likely want to keep that from others in the field.

Additive Manufacturing

Additive manufacturing, sometimes referred to as “3-D printing,” continues to attract interest and venture capital money despite the recent decline in the consumer market. Additive manufacturing allows lighter, stronger alloys to be used instead of traditional materials. It also enables a more efficient supply chain in which parts are manufactured when and where they are needed, rather than being manufactured in one place and shipped to another.

Although some recent developments point to a future in which large, complex items such as entire vehicles can be printed, most current use cases for this technology are to produce parts or subsystems for use in larger systems. The ability to use additive printing technology to manufacture machine parts requires manufacturers to be cognizant of the patent law doctrine of repair and reconstruction, which distinguishes between permissible repair of a patented article and impermissible reconstruction of a patented article, the latter of which is patent infringement. Manufacturers of larger systems will likely want to consult with patent counsel to ensure that their patent coverage is as robust as possible. Similarly, manufacturers of smaller components may require more extensive indemnity provisions in service contracts to shift the risk of patent infringement back to the customer.

Each part manufactured by 3-D printing is represented as a data file that is used by the printer to manufacture the desired object. Manufacturers will want to consider to what extent their data files can be protected by copyright, allowing them to control the ultimate manufacture of the object represented by the data file.

Finally, manufacturers may find themselves able to protect their printing activities using trademark protection. If, for example, a manufacturer has a specific process that allows them to 3-D print a certain material, or finds that objects printed using their process have superior characteristics to parts printed using other processes, that manufacturer may wish to develop a brand strategy around the process, e.g., Printed Using MagicTM.

Smart manufacturing technology holds great promise for manufacturers while posing intellectual property issues with which many traditional manufacturers may be unfamiliar. Manufacturers that are able to identify those issues and capitalize on the opportunities they present will have the advantage in the shift to Industry 4.0.

© 2023 Foley & Lardner LLPNational Law Review, Volume XII, Number 193
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About this Author

John D. Lanza, Foley Lardner, Intellectual Property Lawyer, Technology Industry Attorney
Partner

John Lanza is a partner and intellectual property lawyer with Foley & Lardner LLP where he excels at helping companies identify and maximize the corporate value of their intellectual property assets. He provides strategic advice to his clients regarding the acquisition, transfer and enforcement of intellectual property rights and counsels them regarding their business operations in the face of adverse intellectual property rights. Mr. Lanza is a member of the firm’s Electronics Practice and the Technology Industry Team. 

617-342-4084
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