Immersive technology continues to explode. Users of immersive technology literally change their environment. They don't just experience visual or audio content - they live it. To bring immersive technology to the average consumer, virtual reality and augmented reality technology have become super hot. As startups and BigCos race to develop affordable, excellent VR and AR technology, ultimately the consumer will be the winner. But along the way, some companies will succeed - while others will fail.
Even if you are familiar with VR and its less well known cousin, AR, you may not be aware of how competition between startups and BigCos is impacting the industry. Patents are become an increasingly important tool to help VR/AR companies succeed, as competition heats up.
In particular, there are 3 reasons that patents are super important for VR and AR startups:
- BigCos are moving quickly into VR/AR.
- The number of startups is growing.
- Investment funding for VR/AR startups is slow.
But before we review each of these points, let's take a look at the state of play for VR/AR patents.
Virtual Reality has been a buzz word for a while now. While most people think of video game applications, the world of Virtual Reality is expanding way past the entertainment market and into the healthcare market, education, retail and engineering just to name a few. Augmented reality is catching up fast. Currently, the combined market is estimated to span anywhere from $80B to $182B by the year 2025. Recent developing technologies 5G wireless broadband and Internet-of-Things will support VR and AR technology in a way that will certainly help the technology to expand to many more fields.
Startups and smaller companies have been at the center of it all. These companies are receiving large amounts of funding from the big players, in turn making them key acquisition targets. Magic Leap is one such example. They are one of the fastest growing VR/AR startup companies and have raised around $1.42 billion, drawing $542 million from Google.
Oculus rift has already been hit with multiple patent lawsuits - which threaten its ability to continue to sell its VR headsets. Not all VR patent holders have been so aggressive, but it is only a matter of time until they begin to use the power of their patent to drive out those who are copying their technology.
Currently, Sony dominates the patent landscape for Virtual Reality, followed by IBM, Samsung and Microsoft. Sony currently holds about 800 issued patents and published applications. This is spread out among 150 inventions. Another player LG, has an astounding 1,000 issued patents and published applications in 16 different countries spread out over only 13 inventions. Players such as LG are aiming for broad geographic coverage. Next come the non-VR players who have strategically acquired companies with a diverse VR background. Facebook recognized the potential here and jumped in feet first by acquiring Oculus VR for $2 billion in 2014. Along with the many smaller companies that are being watched closely by big players or already acquired, there are personal inventors in play as well.
Next is Augmented Reality. This technology integrates real-world environment with computer-generated information, graphics and sound in the form of an overlay. Mixed Reality is an even further advanced version of Augmented Reality that features the interaction of virtual objects and real-world objects. The current leader of Augmented Reality is Microsoft with 602 issued patents and published applications spread over 151 inventions. Samsung, Sony, LG and Qualcomm follow Microsoft in terms of the number of AR patents that they hold. Around 2014, Microsoft and Google began acquiring start-ups in this field. Despite not initially being strong in AR, Apple acquired two of the strongest startups that operate in the augmented reality space, thus demonstrating the importance of such companies in the future.
WHAT DOES THIS MEAN FOR VR/AR STARTUPS?
First, ignorance of what others have patented is not a defense. Second, startups in this area need to be super careful to protect their own ideas with patents - while avoiding infringing (trespassing) on the patent rights of others. If even Oculus is having a hard time defending itself against patent lawsuits, startups need to be extra careful.
Second, competition between BigCos can be helpful for startups. Since Facebook acquired Oculus in 2014, the news has been flooded with acquisitions, product launches and collaborations. With the influx of companies operating in these fields, it has become important to understand the technology and the competitive aspects from the smaller players standpoint. This helps identify the most promising technologies and segregation of the high-value patents from the expanding pool of patents moving forward.
While these technologies span over quite a diverse portfolio today, this will only continue to grow along with the acquisitions of startups and small companies.
MAKE CERTAIN THAT YOUR VR/AR STARTUP SUCCEEDS
Patents are super important to help your VR/AR startup succeed. Let's see why.
BigCos are moving quickly into VR/AR. This is a big problem for startups. BigCos can swamp startups in terms of marketing budget and distribution. Innovation alone won't help if you can't get your product in the hands of users, because BigCos have sucked up all the oxygen.
The number of startups is growing. Being a super innovative startup is enough right? You can succeed with innovation alone - until you realize that your startup is literally one of hundreds of new startups in the VR/AR area. You have the best technology - but how can you prove it?
Investment funding for VR/AR startups is slow. The number of startups is increasing but the rate of funding is going down. The amount of investment in VR/AR startups actually dropped in Q1 2017 as compared to 2016. Ouch! Not only are there more startups, but now you have to compete for fewer dollars.
Patents can help you with all of these problems. Patents keep BigCos from stealing your hard won market niche. They also help you stand out from the crowd - making your startup the most desirable choice for funding or acquisition.
At KISSPatent, we know startup companies because we are one. We help you protect your valuable ideas and would love to help answer any questions you might have.