Typically viewed as only a legal function, patent analysis and intellectual property (IP) landscaping can be useful as an advisory tool on a broad range of business functions, such as risk analysis, mergers and acquisitions, product planning and competitive strategy. As a result, investigating the patent landscape should be of interest to both chief financial officers and chief executives.
“Patent intelligence helps business leaders make better and more informed decisions,” says John F. Martin, chairman and chief executive officer of patent analysis software firm Innography. “When moving into a new technology or product area, it answers questions such as who is active in this technology and whether they are litigious, who are potential partnering firms and whether it makes sense to develop or license these technologies.”
Examining patent data can also help monitor competitor activity, including who is buying and selling patents, and enforcing them through litigation. “For example, using patent analysis for competitive intelligence, a premium electronics manufacturer was surprised to discover a previously unknown competitor that was in stealth mode and was working to launch several competitive products,” says Mr Martin. “Armed with information about the competitor’s product plans, the business was able to assess the potential risk to its own business and proactively develop a competitive strategy.”
Assessing potential acquisition targets – and ensuring a company doesn’t overpay – is another area where patent analysis can help. Mr Martin gives the example of a semiconductor manufacturer that had agreed on a price to purchase another business, but realised the patent portfolio was not as strong as it had first thought. “They were able to negotiate a reduction on the purchase price by over £20 million,” he says. Such investigation can assess the risks of future patent claims following an acquisition, he adds.
Patent intelligence helps business leaders make better and more informed decisions
In-depth analysis of patent data can also help organisations assess the value of their own portfolios and make decisions about which patents can be licensed to others and any potential sales opportunities. “Intellectual property is a multiplayer game,” says Mr Martin. “Companies need to know where they stand relative to their competitors and potential market entrants to fully understand the value of their portfolio and determine the best going-forward strategy.”
Staying on top of the millions of patents filed each year would require huge resources for an in-house team. Even where such capabilities exist, these tend to be based around traditional keyword searches, which can miss entries that use unusual terms or are from other industries. In addition, as many as 20 per cent of patents can be missed as a result of patent data errors. For instance, International Business Machines is spelt some 900 different ways in patent data, Mr Martin points out.
Organisations, such as Innography, use big data techniques to compile the latest information on patents, cleanse the data to correct errors and provide advanced search techniques going well beyond typical keyword search. The result is that multiple functions within organisations can learn valuable information about competitor activity and make informed decisions about their own strategy.
“Being informed about your company’s own portfolio is just the first step,” says Mr Martin. “The really interesting answers arise from how your organisation compares with the other players in the marketplace.”
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