Playbook for IP patent competitive intelligence and better business decisions

By Michael Bielski, Patent Attorney

Patents are valuable sources of competitive intelligence. Large patent datasets contain an overwhelming amount of information often making it difficult to extract value. However, extracted and organized properly, information contained in patents can be translated into valuable competitive intelligence that can help executives make better business decisions.

Patents can be a reliable source of competitive intelligence for one important reason – patents are expensive and require significant resources.

Therefore, technology that is patented often represents highly valued technology by the organization – technologies which most likely align with current or future products. This alignment is likely to increase in the future as organizations continue to develop and enhance their intellectual asset management (IAM) capabilities in an effort to eliminate ad-hoc patenting activity.

Developing a patent dataset

Patent datasets can be created in many ways. A patent dataset may be derived from the results of a freedom-to-operate analysis, or alternatively, from a broader search developed by creating search dataset terms around a particular technology area of interest.

Any competitive patent analysis must begin with a dataset of relevant patents; the more relevant the dataset the more accurate the competitive intelligence derived from that dataset will be.

Human-reading a patent dataset for relevance is time consuming but highly recommended prior to making business decisions.

Patent datasets derived solely from search terms may include patents that, after further review, are not really relevant to the product or technology space being studied.


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Evaluating patent datasets: Important fields

Once a patent dataset is determined to contain patents of interest relative to the technology, product, or business area desired, information from various fields of the patent can be extracted for analysis.

Important areas to evaluate include:

I. Inventors
In the United States, inventors are defined as individuals who have contributed to the claimed invention. A patent may have multiple inventors, depending on how many individuals contributed to the claims of the patent. Inventors obviously have technical expertise in the technology area, however, inventors may or may not have an ownership interest in the legal rights of the patent.

TIP: Value in analyzing inventors – find out who the innovators are in your industry. Executives asking themselves, “Who are the innovators in my industry?” should do so while being cognizant of the following:

Prolific inventors are often prime candidates to recruit into your organization, especially in areas where your organization may lack technical expertise. Whereas, inventor analysis is not only useful for analyzing current products and technologies of an organization, but it is also useful to help determine products and technologies an organization could likely develop.

Competitive R&D strategy
Tracking an inventor’s transition from one organization to another, by noting a change in the assignee on the inventor’s patents, may yield information regarding competitor R&D strategies. Recent changes in the assignee a prolific inventor is working for should be monitored carefully – especially when prolific inventors move to a top business competitor.

II. Assignees
Assignees are entities and individuals that have an ownership interest in the legal rights a patent offers. An assignee is often the organization employing the inventor of the technology.

TIP: Value in analyzing assignees – find out which companies are patenting in your industry. Executives asking themselves, “Which companies are patenting in our industry?” should be cognizant of the following:

Identifying and assessing collaborators and partners
Analyzing the assignees in a relevant patent dataset provides valuable information in directing potential collaborations. Potential contract manufacturers, customers, suppliers, R&D partners, licensees, licensors, acquirers and acquisition targets may all be derived from analyzing the patent owners in a particular technology space. Importantly, contract manufacturers can be evaluated before, during and after an engagement to get a sense for 1.) how aggressive their IP strategy is and 2.) are they filing patents on invention that derives from the engagement.

Assessing business competitors
Business competitors are known product and technology competitors that are expected to have patents in the relevant technology space. Analyzing how many patents an organization’s business competitors has allows executives to 1.) evaluate the relative IP investment made by their competitors, 2.) assess the dominant IP holders in the technology space, and 3.) assess collaborations between business competitors by evaluating co-assignees on patents.

Identifying and assessing IP competitors
It’s important to note IP competitors can also include organizations that are not known product and technology competitors, however, they do have patents in the relevant technology space. Therefore, your business competitors may be different than your IP competitors. Executives need to understand IP competitors because 1.) they may be preparing to launch competitive products and transition into a business competitor, 2.) they may license their patents to another business competitor, and 3.) they may be more likely to litigate in non-core technology areas.

III. Product / technology categories
Product / technology categories are user-defined labels for organizing a relevant patent dataset. These categories can change depending on the objective of the analysis and the product / technology space being evaluated. Importantly, the categories should organize the patent dataset in a way that provides valuable information to the executives of the organization.

For example, categories such as product areas; technology areas, customers, suppliers, competitors are each potential product / technology categories that can be used to organize a patent dataset in a meaningful manner.

Using patent classification codes (such as IPC, US Patent Classes) can sometimes be an efficient way to organize a patent dataset.

TIP: Value in analyzing product / technology categories –  find out what is being patented. Executives asking themselves, “What is being patented?” should be cognizant of realizing organizing a patent dataset by mapping each patent to a product / technology area or patent classification code allows executives to understand not only the number of patents that an assignee owns, but more importantly, what they are patenting. This analysis could provide executives competitive insight into product and technology strategies, competitive advantages, and IP strengths (and weaknesses).

IV. Filing Date
Filing date simply refers to the date that a patent has been filed. This is more telling than patent issue date (issuance is usually years after filing date) for competitive information purposes because the filing date allows executives to more accurately track the evolution of innovation and IP strategies in an organization relative to product / technology strategies at the time of invention.

TIP: Value in analyzing filing date – find out when something is being patented. Executives asking themselves, “When is it being patented?” should be cognizant of the following:

Understanding timelines
Organizing a patent dataset by filing date provides a timeline to the innovation and IP strategies of an organization. Earlier filings may be less relevant compared to recent filings. Recent filings may indicate new product / technology areas whereas older filings may indicate older, obsolete product / technology areas.  Closely monitoring how an organization’s IP filings change over time is valuable in understanding an organization’s overall corporate strategy.

V. Filing jurisdictions
Filing jurisdictions indicate where an organization has filed patents on an invention. The number of patents an organization has may not be a clear indicator of the level of invention occurring in an organization – a single invention may be filed in multiple jurisdictions.

TIP: Value in analyzing filing jurisdictions – find out where it’s being patented. Executives asking themselves, “Where is it being patented?” should be cognizant of the following:

Jurisdictional filings add significant costs to a patent portfolio
Whenever multiple jurisdictional filings are made by an organization, this usually means the corporation intends to conduct business now or in the future in a particular country. Observing trends in jurisdictional filings may give executives information on where competitors are outsourcing, selling product, making products or licensing products. Importantly, these trends may also indicate the perceived value of patents in a certain jurisdiction.

Therefore, a lack of patents being filed in a particular jurisdiction by an IP savvy organization is important to understand as it may indicate that it may not be worth the cost to file due to lack of patent enforcement.

Closing comments

Patents contain a significant amount of competitive information if they are analyzed in the right way. Understanding who is patenting in your business space, what they’re patenting, when have they filed and where they have filed provides tremendous insight into competitive business, technical and product strategies.

This information can be relied upon because patents are resource intensive documents – it takes a significant amount of time and intellectual capital to receive a patent.

Typically, an organization’s patents are a clear link to the current or future business objectives of an organization. Whether executives are making decisions about identifying potential contract manufacturers, partnerships, acquisitions, licensees or simply trying to gain a competitive edge in the marketplace, patent analysis enhance the decision making process.

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