Importance of Patents for Edtech Start-ups

Written by IP Guardian on 1 August 2022

Education technology, or EdTech, is the application or use of technology to improve, enhance or transform education delivery and practices. In technical terms, it may be hardware and software designed to facilitate teacher-led learning to improve students' educational outcomes. In this article, ‘edtech’ refers to the industry of companies that create educational technology.

Globally, education is one of the world’s single largest industries, making up more than 6% of GDP. It is expected that total global expenditure from governments, companies and consumers will reach around $7.3T by 2025. The EdTech sector is yet to gain a significant share of that expenditure, however, it has managed to grow leaps and bounds thanks to the impetus given by the pandemic. EdTech is currently estimated to be a US$250B+ market and is expected to grow to $404B by 2025. {Source: HolonIQ}. There are still 34 EdTech unicorns around the world (that have not gone public with IPO), offering successful educational technology platforms and innovative new methods of teaching that is expanding access to education for students all over the world. Some of these include BYJU’s from India valued at $22 billion, Yuanfudao from China valued at $15.5 billion, Articulate from US valued at $4.75 billion, GoStudent from Austria valued at $3.5 billion and Unacademy from India valued at $3.4 billion.

The EdTech sector in Australia is no different and the domestic EdTech start-up sector is now the second largest start-up community in Australia, behind only FinTech, more than doubling in size since 2017. The products and services include platforms for administration, student management, content management and learning management within the education sector, Digital learning content or services used by learners, education providers or corporations connected to education and learning. Growth in start-up activity and innovation is expected to continue for the foreseeable future as the sector grapples with what education looks like in an increasingly digitally enabled environment. Some of the top Australian EdTech companies/start-ups include OpenLearning, Inkerz, EdSmart, Paddl Co., SEQTA, Code4Startup and ORIGO Education. The Australian EdTech sector is an active exporter taking Australian education global with every Australian EdTech company that is generating more than $2M annual revenue exporting. Australian EdTech companies have created a massive economic impact with growing 800 EdTech Companies, 13000 Employees and an overall revenue of $ 2.2 Billion.

Wherever there is a technology and innovation, it is important to consider intellectual property and in particular patents.  Patents grant a monopoly right to the applicant over the use of their technology and thus provide a huge boost to a start-up or any organisation in setting up their market. Patents not only allow them to keep the competition away but also encourages people to keep on innovating. Securing patent rights provides assistance in securing investors who feel more assured about the uniqueness of the concept and protected against technology theft.

In the last 10 years there have been a lot of patent filings in EdTech domain across the globe. The following table shows the patent filing trends in this space from the top Patent Jurisdictions:

Edtech patent application

EdTech patent applications

{Source: WIPO}

As can be observed, the US leads the way in terms of countries, and Facebook leads the way in companies with most patent filings in EdTech and e-learning. Although the numbers are significantly lower than the numbers in US, Australia still ranks 3rd in terms of patent filings in Edtech and e-learning domain in last 10 years.

To gain more insight in Australia, the following table shows the Edtech patent filings in Australia only:

EdTech patent applications Australia

EdTech patent applications Australia

{Source: WIPO}

Again, Facebook emerges as the top patent filing Company with 15 patent applications, followed by the Apple Inc (10) and Advanced Elemental Tech Inc (7). It is interesting to note that the greatest number of patent publications were in 2020 which coincides with peak of the Covid 19 pandemic. It appears that the pandemic has completely changed the way the education world works. It has significantly impacted the education sector and possibly forced the speed up of digitisation in education sector.

Let’s consider the impact of patent filings on start-ups by way of an example. One of the top Australian EdTech start-upa is JIBB (Formerly known as Inkerz) (  JIBB turns a physical dry erase board or a whiteboard into an online whiteboard using any webcam for real-time collaboration. It provides a web platform that enables collaboration using real pen and paper. The company's application leverages AI technology to turn any smartphone camera into an artificial eye that captures the writing and drawings on a whiteboard and piece of paper, enabling clients to aid in idea capturing, sharing, and collaboration whether in the office or a remote place. It also allows users to create virtual classrooms and communicate with peers through chat, voice and video.

Patent filings by JIBB are shown below:

{Source: WIPO}

EdTech patent applications Australia

Inkerz Pty Ltd patent applications Australia

As can be seen from the above, it has four patent filings in Australia, two in US and two PCT filings. Interestingly, JIBB (or Inkerz) had 4 patent applications published from 2016 to 2020, but then have another 4 applications in 2021-22.  These four patent applications include:

EdTech patent applications Australia

Inkerz patent applications Australia

{Source: AusPat}

As the company is backed by patented technology (both national Australia and International), JIBB has raised a total of $2.9M in funding over 3 rounds. Their latest funding was raised on 1August 2021 from a Seed round. Brief details are provided below:

EdTech patent applications seed funding Australia

JIBB Seed Funding

{Source: Crunchbase}

It's impossible to draw definitive links between valuations, patent applications and ability to raised funding in Australia with the limited data available, however, in our experience securing patents will facilitate investment and increase valuation.

Patent protection provides a sense of security to investors who want to invest in a company and is a crucial tool to obtain the much-needed initial cash boost in a start-up, in terms of assurance of USP of the technology and security from technology theft. An intellectual property strategy and patents are critical to receive investments to grow a start-up company. Additionally, international patent filings allow expansion in foreign countries which is beneficial for founders as well as investors who may have a particular vision for future of the company. Considering a sector as important as education, having patent rights may also open further avenues for technology sharing, licensing and other modes of revenue generation. Most importantly, patents encourage innovation, and innovating new technologies enables us to educate a new generation in the best way possible. Although Australian patent filing in Edtech domain are increasing, with the pandemic providing a much-needed boost, there is still a lot of scope to grow further when compared with the patent filings in US.

If you have a EdTech-based invention and you would like to discuss the best strategy for a patent application, reach out to our team at IP Guardian. Our attorneys are experienced at handling EdTech patents and assisting you in protecting your Intellectual Property.

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