In Pursuit of Patents

There is little doubt that protecting one's intellectual property is important for businesses both large and small. Statistically, 60% of the market valuation of the average industrial corporation is based on its intellectual property and that figure rises to 80% for high-tech companies. Patents make up a large slice of the intellectual property pie in any technology-driven company. Filing a patent, however, is not the end of protecting your technology. Indeed, it is just the beginning. A key ingredient to the success of any technology-based company lies in effectively managing its patent portfolio. One important and often overlooked aspect of managing your patent portfolio is patent tracking.

According to John B. Jones, Jr., Managing Director at Salomon Smith Barney, many companies lack the necessary diligence in keeping an eye on new technologies. “Over the long haul, businesses must continuously innovate to sustain product leadership. However, many are still practicing or analyzing innovation in an undisciplined or irrelevant manner.” “Patents and Market Value Forecasting,” Anthony Breitzman, Ph.D., The Annual International Conference of the Society of Competitive Intelligence Professionals, March 15, 2003, Anaheim, CA.

Tracking patents is an underutilized strategy that can help solve technical problems, provide a perspective on innovation in a particular area of technology, afford great insight into competitors' business and technology strategies and facilitate rapidly identifying competitive threats. However, with 10 million patents in the world already, and well over 10,000 new ones filed in an average week, keeping up with them can be daunting and labor intensive. The alternative, however, may be summed up in the Chinese Proverb, “the death of a thousand cuts.” Companies that fail to exercise the requisite diligence in maintaining their patent portfolio may be subject to the slow hemorrhaging of their market share, which eventually bleeds the vitality out of the company.

One of the main advantages of patent tracking is that it is a scalable exercise. The task can be as simple or sophisticated as you need. It can be done for technologies with only a few patents, as well as technologies with thousands of patents. Patent tracking can be broad (eg, lasers) or precisely focused (eg, diode-pumped short-pulse ultraviolet YAG lasers). It can also be normalized to reveal company-specific information. Another advantage is that it is an unobtrusive exercise. You can track companies, inventors and technology without alerting those that are being tracked.

Here are some specific reasons for tracking patents:

• Innovation Tracking. Patent tracking can provide a view of technological developments in your area of business. This information can help a company save on development costs by identifying licensing opportunities or to redirect research and development efforts if you discover your invention might infringe on an existing patented technology.
• Competitive Intelligence. You can also track the competitions' R&D processes by identifying the technologies for which they are seeking patent protection. By monitoring international patent applications, you can gain insight into a company's plans for international expansion.
• Infringement. There have been some recent notable lawsuits for patent infringement including, Eolas v. Microsoft for Web browser plug-ins, MercExchange v. eBay for computerized marketplaces and Amazon v. Barnes & Noble for its one-click system. Patent tracking can reveal whether someone else's technological developments infringe on your patents. Just as importantly, it can help prevent you from infringing on another's' patents before court action ensues.

Patent Tracking

Patent tracking can be conducted in a variety of ways. The most basic of these methods is the “Patent Count.” Simply count the number of patents for a technology area or particular company. Patent tracking can also be conducted using additional analysis tools such as: 1) Citation Tracking, which tracks those patents that are cited most frequently in a given time period, thus providing insight into the direction of innovation; 2) Technology Cycle Time Tracking, which can be used to see whether a company is building upon 5-year-old technology, 10-year-old technology, etc. thereby providing a view of that company's speed of innovation; and 3) Science Literature Linkage, which can be used to distinguish between those areas of technology that are going through incremental improvements as opposed to those areas that are especially innovative. Several Web-based services are available that will track issued patents and published patent applications that cite your own patents. With these types of “track-the-tracker” tools, you can see who is developing technology so similar to your own that they are required by the U.S. Patent and Trademark Office to cite it in their patents.

The Patent Count tracking method can be performed periodically at many publicly available patent Web sites such as the United States Patent Office (www.uspto.gov) or Espacenet (www.ep.espacenet.com). The advantage of using publicly available Web sites is that they are free. The disadvantage is that they have no means for automatic tracking nor do they provide more advanced tracking metrics. Options include service providers and software programs that provide patent tracking and analysis. If you are unsure about the technology of a software program or about using a service, your best bet is to hire a patent attorney.

Patent analysis is a powerful, unbiased, unobtrusive method for identifying the technological strengths and weaknesses of technology, competitors and regions. Companies who are patent savvy can make more informed decisions about entering new technological areas. They can determine whether certain products warrant patent protection or would infringe the patents of others and they can better predict where their industry and competitors are headed. Patent tracking is essential in effective negotiation of licenses and is crucial in determining the true value of a merger or acquisition candidate. Uncovering patents in your market is useful in finding infringers and in identifying licensable technologies and strategic partners. In the end, patent tracking should be a key strategic priority for technologically savvy companies.

This article originally appeared in The Connecticut Law Tribune, an American Lawyer Media publication.

There is little doubt that protecting one's intellectual property is important for businesses both large and small. Statistically, 60% of the market valuation of the average industrial corporation is based on its intellectual property and that figure rises to 80% for high-tech companies. Patents make up a large slice of the intellectual property pie in any technology-driven company. Filing a patent, however, is not the end of protecting your technology. Indeed, it is just the beginning. A key ingredient to the success of any technology-based company lies in effectively managing its patent portfolio. One important and often overlooked aspect of managing your patent portfolio is patent tracking.

According to John B. Jones, Jr., Managing Director at Salomon Smith Barney, many companies lack the necessary diligence in keeping an eye on new technologies. “Over the long haul, businesses must continuously innovate to sustain product leadership. However, many are still practicing or analyzing innovation in an undisciplined or irrelevant manner.” “Patents and Market Value Forecasting,” Anthony Breitzman, Ph.D., The Annual International Conference of the Society of Competitive Intelligence Professionals, March 15, 2003, Anaheim, CA.

Tracking patents is an underutilized strategy that can help solve technical problems, provide a perspective on innovation in a particular area of technology, afford great insight into competitors' business and technology strategies and facilitate rapidly identifying competitive threats. However, with 10 million patents in the world already, and well over 10,000 new ones filed in an average week, keeping up with them can be daunting and labor intensive. The alternative, however, may be summed up in the Chinese Proverb, “the death of a thousand cuts.” Companies that fail to exercise the requisite diligence in maintaining their patent portfolio may be subject to the slow hemorrhaging of their market share, which eventually bleeds the vitality out of the company.

One of the main advantages of patent tracking is that it is a scalable exercise. The task can be as simple or sophisticated as you need. It can be done for technologies with only a few patents, as well as technologies with thousands of patents. Patent tracking can be broad (eg, lasers) or precisely focused (eg, diode-pumped short-pulse ultraviolet YAG lasers). It can also be normalized to reveal company-specific information. Another advantage is that it is an unobtrusive exercise. You can track companies, inventors and technology without alerting those that are being tracked.

Here are some specific reasons for tracking patents:

• Innovation Tracking. Patent tracking can provide a view of technological developments in your area of business. This information can help a company save on development costs by identifying licensing opportunities or to redirect research and development efforts if you discover your invention might infringe on an existing patented technology.
• Competitive Intelligence. You can also track the competitions' R&D processes by identifying the technologies for which they are seeking patent protection. By monitoring international patent applications, you can gain insight into a company's plans for international expansion.
• Infringement. There have been some recent notable lawsuits for patent infringement including, Eolas v. Microsoft for Web browser plug-ins, MercExchange v. eBay for computerized marketplaces and Amazon v. Barnes & Noble for its one-click system. Patent tracking can reveal whether someone else's technological developments infringe on your patents. Just as importantly, it can help prevent you from infringing on another's' patents before court action ensues.

Patent Tracking

Patent tracking can be conducted in a variety of ways. The most basic of these methods is the “Patent Count.” Simply count the number of patents for a technology area or particular company. Patent tracking can also be conducted using additional analysis tools such as: 1) Citation Tracking, which tracks those patents that are cited most frequently in a given time period, thus providing insight into the direction of innovation; 2) Technology Cycle Time Tracking, which can be used to see whether a company is building upon 5-year-old technology, 10-year-old technology, etc. thereby providing a view of that company's speed of innovation; and 3) Science Literature Linkage, which can be used to distinguish between those areas of technology that are going through incremental improvements as opposed to those areas that are especially innovative. Several Web-based services are available that will track issued patents and published patent applications that cite your own patents. With these types of “track-the-tracker” tools, you can see who is developing technology so similar to your own that they are required by the U.S. Patent and Trademark Office to cite it in their patents.

The Patent Count tracking method can be performed periodically at many publicly available patent Web sites such as the United States Patent Office (www.uspto.gov) or Espacenet (www.ep.espacenet.com). The advantage of using publicly available Web sites is that they are free. The disadvantage is that they have no means for automatic tracking nor do they provide more advanced tracking metrics. Options include service providers and software programs that provide patent tracking and analysis. If you are unsure about the technology of a software program or about using a service, your best bet is to hire a patent attorney.

Patent analysis is a powerful, unbiased, unobtrusive method for identifying the technological strengths and weaknesses of technology, competitors and regions. Companies who are patent savvy can make more informed decisions about entering new technological areas. They can determine whether certain products warrant patent protection or would infringe the patents of others and they can better predict where their industry and competitors are headed. Patent tracking is essential in effective negotiation of licenses and is crucial in determining the true value of a merger or acquisition candidate. Uncovering patents in your market is useful in finding infringers and in identifying licensable technologies and strategic partners. In the end, patent tracking should be a key strategic priority for technologically savvy companies.

This article originally appeared in The Connecticut Law Tribune, an American Lawyer Media publication.