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The Role of Intellectual Property Analytics in Technical Management

A discussion on the importance of managing intellectual property aggressively in a technical management role. Knowledge is power, but many companies fail to utilize the ready cache of information that exists in industry patents today. In recent years there has been an increasing need for patent analysis, but that need has frequently been ignored.

There is no doubt that some major corporations have dedicated resources to focus on this area, but for the most part smaller companies, and certainly those in our industry, leave patent research mostly untapped. The most obvious need for this work is the increase in assertion and infringement potential that is currently occurring. However, there are other needs such as increased rate of acquisitions and mergers, increased pressure to monetize intellectual property assets, open innovation, and most importantly understanding the trends that are developing within the industry. These are some of the reasons why patent analytics should play an important role within the everyday business practices of most companies.

A quick look at the patent landscape within the industry still indicates that patenting has not subsided but has still continued at an aggressive pace. Not only is this trend evident in the United States, which had the highest number of patents issued until 2007 when it was overtaken by Japan, but also in China which surpassed the European Patent office making it the fourth most prolific country for patents. South Korea is ranked number three.

Figure 1: USPTO Patents & Applications US Class. 604/"Diaper"
Figure 2: USPTO Patents & Applications US Class. 428/”Nonwoven”

We can anticipate that these trends will continue; not only will we need to focus on North America and Europe, but take into account the technology boom that is occurring in Asia. The reason for this explosion in patenting on a global basis has been the realization that patents have become a strategic weapon in competition. As more companies are beginning to understand such tactics, they are adopting this same strategy. The advantage is obviously to the larger companies that can afford the high cost, making competition for the smaller companies ever more difficult.

As some of us still consider our industry to be technology driven, patents should become more of a core to business strategy. Even though this is primarily true for the smaller companies (i.e. under $2 billion in sales), the larger companies need to do a much better job at managing their current efforts and maximizing their dollar investment. These efforts will allow them to benefit from the fast pace of innovation. To do this, they must have developed and structured intellectual property management “mining” and intelligence business processes. Having well established patent analysis processes in place will not only allow them to increase team productivity and facilitate faster decision making in technology and product development, but also provide valuable insight and knowledge to their R&D teams and increase their efficiency.

If this is the case, why have not more companies adopted these processes? Having personally implemented some of these practices in some companies, it becomes quickly evident that it is not an easy job. The primary reason is the lack of resources that most companies face today, which does not permit the organizational discipline to maintain the effort towards this task. Most efforts at best become sub-orbital in nature and are discontinued not for lack of interest, but due to balancing the many priorities that are required to maintain the day to day business.

It is for these same reasons that smaller companies need to redirect their focus. By placing their energy in patent research and formalizing their business practices, a wealth of information can be made available to a company’s R&D organization thus providing the right intellectual property analytics to their organization.

Websites Tools
USPTO Anacubis
Google Patent Search Aureka
Esp@cenet VizInt Smart Charts
Free Patent on Line Derwent Analytics
Delphion Vantage Point
Thomson Innovation Anaqua
Patent Analysis Search System Pantros IP
Pat Base ipVision
Total Patent KMX Pat.Analytics
WIPS Global 3i Analytics
Surf IP MapOut
SureChem STN Anavist
Oweb MatheoAnalyzer

There are many techniques and programs that can make this task easier; some of the more established web sites and systems are listed in the adjacent table.

Other software can also be purchased to access this information and perform the auto-pilot analysis of the information in various pyrotechnically prepared charts. Although these programs eliminate the effort which is required to compile the data, the danger is that they typically generate “data dumps” that do not allow for the proper insight to be developed. Nonetheless, depending on the quantity of analysis conducted they may be worth the $2500 to $5000 cost for the software.

Most analysis of any patent estate starts with a basic patent search process. The typical analysis process is reflected in Figure #3. It is important that basic search questions as to purpose of the search be specific enough to make the search effort efficient. It is best to start this process with a broad mission statement as to the end result expected. Is the search to obtain a right-to-practice, file a new patent, spur product development, and gain competitive knowledge or defeat impending litigation? This way, instead of looking at patent data and figuring out what questions can be answered, it would be most beneficial if one would start with a broad policy question and figure out how the patent data can help clarify the question at hand.

Even though the process can be very tedious, which is one of the reasons why not too many organizations take the time doing them, we feel that it is best to utilize the search and click or manual method first before relying on the many generic intelligence applications listed in Table 1. These applications will require a significant effort to customize and have very lengthy learning curves.

At the beginning, this time could be better spent to develop the data base and understanding of the information available in a manual format. Once the basic process and data base has been developed and the practice of doing the work becomes habitual, a software approach can then be contemplated and the results will be better understood following this sequence.

Figure 3: Process for Patent Analysis

Also, the task of sorting out the “noise” in the patent inventory is best done by only those who understand the technology. Patent classification searches are just too broad to use by themselves to search for open space and to perform invalidity or infringement searches. In these latter cases, a more semantic analysis of patent text (i.e. keywords) must be used with classification data for finer discovery in each analysis search.

Keywords or patent text can be established by reviewing what the intended invention is, identifying the problem it solves, its need, the solution itself, the function, and the structure. Combining keywords is also useful in filtering the number of patents to only the ones that are relevant.

Another technique that is useful when “hunting” for prior art is to search under the key inventors renown within their companies and who are working in the field. Also, studying the number of inventors and, if known, reviewing their backgrounds or the departments that they may work in is another method that can reveal what phase of development the concept is and whether the company is planning to undertake commercialization.

A technique that is most useful in analyzing this data is called “clustering” or categorizing the filed inventions into similar buckets of technology, materials, processes or design features. By determining the number of patents in each of the buckets one can easily see the overall direction companies are taking. Some of the time these patents never see commercial applications, but usually within a period of five to eight years of patent filing the embodiments begin to emerge in commercial products. This often is the case when multiple patents are filed around the same theme.

An important technique besides simple patent counts and clustering is the use of citations on the same patent. By exercising this technique, it becomes readily visible which patents within any category are the dominant ones and those that deserve the closest scrutiny. Citations are an imperfect but useful map of the links between bits of knowledge. These reference prior patents or prior technology and are added to limit scope and avoid infringement. Some are added by the USPTO examiner; some are added for “teaching” of the prior art. The USPTO requires the use of all relevant prior art, while the European office requires only the minimum number to cover the prior art. It has also been correlated that patents that exhibit the most citations have also the highest market value when licensed or sold.

Once the basic patent search basics are mastered, one can then start to explore ways in which the information can provide useful data to the organization. Besides the two primary reasons for patent searches, prior art for filing new patents and for right-to-practice studies, there is a significant wealth of information that can be gleaned from the patent estates in each technology base within the industry. This information is relatively inexpensive to obtain, and it can be used to leverage the internal resources of an organization by providing guidance on the trends that are occurring within the industry. This is most relevant within personal care absorbent products where there are so few companies driving innovation.

One of the more important sets of information that can be obtained, and that few companies take advantage of, is performing trend analysis on the type of innovation that the industry leaders are performing. As of the last nine years, we have published patent applications which become public within six to twelve months of filing. Therefore, one can obtain a fairly good idea of what the industry is working on.

Examples of the type of trend analysis that can be done are best shown by the two charts that follow. The first chart tracks the number of patents that have been filed in the personal care absorbents industry in the last five years categorized into the different areas. The second chart includes the same categories but only for the patent applications that have been filed during the same time period. By observing the relative weighting of each of the categories, one can determine whether a specific category is acquiring momentum or is falling out of favor within the industry.

Figure 4: Patent Categories 2005 to 2010

This type of analysis can also be done for individual companies and can to some degree be predictive of what companies will be doing next in the market place. It is also a useful exercise in identifying “open” spaces, which are technical or product areas that are not receiving much attention and could be opportunities for new or smaller companies to take advantage of and patent within.

The reason that most organizations do not take the time to monitor these metrics is the time required to perform the task considering the number of applications that are published and patents that are issued. The review has to be fairly detailed in order to categorize the patents correctly, and as can be seen by the data in Figures 4 and 5, some of the categories probably should be further broken down into sub-categories as the buckets originally used to capture them may be relatively large. The data base for this time period for instance was the total number of patents that were shown in Figures 1 & 2 which equated to approximately 2403 different publications. To peruse this number and perform a relatively accurate assignment to each patent takes significant amount of time. No wonder few groups take advantage of this methodology.

Reviewing company specific data is also very revealing as this tends to determine the leadership within the industry as well as the areas of focus and the technology and product strategy that the key companies are pursuing. As it is quite evident in Figure 6, even though the number of patents issued to the two major companies in the industry is about the same, it is clear to see who is continuing their dominant pace in innovation for the foreseeable future.

Unicharm has also increased their activity during the last four years; considering their close association with SCA, their combined patent estate slightly surpasses that of Kimberly Clark.

Interestingly, activity in some of the smaller regional and private label companies has also increased with new players becoming visible. More insight can be obtained if the clustering of patent analysis is done within each of these organizations. This exercise will clearly show the areas of focus. Further analysis will also determine strategy and management style of the individual companies involved and can be used as a metric for the value of their R&D and their budget determination.

Outside of the trend analysis and strategy determination that can be gleaned from the broader macro analysis, patents as part of their purpose for being are a great source of technology for the R&D organization on a micro basis. This activity has always been pursued by the more astute engineers and scientists to their personal advantage, as it has been primarily done on an individual basis. Once an organization develops patent benchmarking and technology gate-keeping as one of their key business practices, the information derived from mining this field can be communicated to the entire organization. This allows for significant increases in productivity by the entire organization and not just of a few individuals. When companies have fewer resources at their disposal, having them not re-invent the wheel is worth significant cost and time savings.

Besides the gate-keeping benefits listed above, the knowledge that the organization gains from performing these tasks on a routine basis is invaluable. As more companies are learning to use patents as offensive marketing tools, litigation cases on patent infringement increase. Having a good understanding of the many patent minefields within the area you do business is just simply good common sense. This effort is an area which appears to be lacking, especially with smaller companies today. As a result, these are the companies that usually find themselves as defendants in patent litigation cases and are greatly disadvantaged because they have to start from scratch at developing their position. Validity searches are much more extensive and complicated than “patentability” searches or “competitive intelligence”, and their costs come at a premium.

In today’s climate of constantly churning organizations due to reductions-in-force and organizational re-engineering efforts, little continuity is established and the loss of company historians can have major negative consequences. Not having the required “organizational” knowledge and the internal data base available will cost more in the long run. By establishing formal patent analytic processes as part of the cost of doing business, significant cost savings and improvements in the productivity and quality of the research and product development performed can be achieved.

By A.D. Jezzi & Associates, LLC
Personal Care Absorbent Products, Materials and Processes
Rick obtained his B.S. in Chemical Engineering in 1970 from Drexel University. He started his career with Scott Paper Company where he worked on their air-laid new products. He pioneered and commercialized the Kroyer air-laid technology in North America with the American Can Company. He was Director of R&D with the Kimberly-Clark Company in the areas of Baby Diapers, Feminine Care, Adult Care and Non-Woven material development. During this period, he was accountable for many new material and consumer product initiatives supporting Kimberly Clark’s hygiene business. During the late nineties, Rick was Executive Vice President of Paragon Trade Brands, a private label baby diaper manufacturer. His last corporate assignment was with Clopay Plastic Products Company where he served as Vice President of Global Research and Development. In this capacity, he managed the overall technologies of the company in the areas of Hygiene, Medical, Industrial and New Business Development.

Copyright A.D. Jezzi & Associates, LLC

Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.For specific technical or legal advice on the information provided and related topics, please contact the author.

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