Companies at the cutting edge of their industries have realized the immense value of their patent portfolios and are still trying to make the most of that value – but it is not easy. A semiconductor or electronics company can have tens of thousands of patents; finding the patents that are the most valuable is one of its biggest problems. These patents are needed to determine the strategy for patent sale, licensing or litigation, and without them the company is basically stuck and can’t move forward. The process is like sorting the grain from the chaff.
Patent landscaping is one way to help companies find their patents that have the highest potential for value. The process can be shown graphically: every dot on the paper is a patent. Where there’s a cluster of dots it means the technology area of each patent is very similar, and where there are no relevant patents, there is white space. With such a visual means companies can start strategizing about how their patents can be used.
Traditionally, the standard way of initiating the patent process is using invention disclosures. Someone has an idea, writes out an invention disclosure and hands it to the intellectual property group. The group then decides on whether to patent this idea or use it as a trade secret. Today, however, different processes, such as strengthening of patents, strategic patenting and patent acquisition, are becoming more and more popular ways to improve a patent portfolio.
In the case of strengthening, patent applications are being reviewed more often, typically after they are published – up until just after their notice of allowance. Companies often do this to see whether the patents read on the products of other businesses with which they might negotiate in the future. Keep in mind that the patent application may have been in the patent office for two to three years at this point and the industry will have developed new products during this time. It is worth the effort to see if this invention is now being used by others.
At this point, patent applications are being matched to a product rather than a patent. What that might produce is an indication of use rather than solid evidence of use. This indication of use analysis can be fed back into a patent prosecution group. If they have enough to work with within the patent specification, they can adapt the claim language to better match the product that’s already in the market and then file a continuation.
This is not a new process. It was first used more than 10 years ago; however, it may have been too early for its time. Over the past three to four years it has become much more common practice as people are focusing on improving the quality and effectiveness of their patents, in particular for future cross-licensing.
Strategic Patenting and Patent Acquisition
Many companies are also trying to find ways to develop and strengthen their patents in strategic areas that are currently seen as white space in the patent landscape. There are two potential options for this: tasking a design team with thinking about how to broaden the patent portfolio more effectively, or acquiring patents. Patent acquisition gets faster results but it has to be weighed against higher costs.
The other trend is that of patent divesture, abandoning or putting patents up for sale. Given that maintenance fees are very expensive and because of the sheer number of patents owned by large companies, it comes as no surprise that retaining all the patents can be unsustainable in the long term. As an example, a large semiconductor company can easily have 20,000 U.S. patents, in this case the cost of maintenance fees alone is $400M USD over the lifetime of these patents.
Different techniques are used to identify patents for divesture; detectability (or the ability to detect use of the invention) is infrequently used but can be one of the biggest assets in planning a divesture strategy. To put it very simply, a patent is not considered valuable unless it can be used to help protect a company’s freedom to operate or if it can be monetized (typically this means licensing or selling the patent). If a company can’t prove that someone else is using its patented invention, then is it valuable? In addition to looking at this criterion, which helps to find those patents that are either too expensive to prove use of, or impossible to prove use of because the methodology is just not available, companies should also look at the market size—is this invention in a large enough market sector to be valuable?
The Best Defense
The best defense is a good offense. This means being prepared. Clearly, companies need to come to a negotiation with solid claim charts, which show indication or evidence of use. However, one of the biggest trends today is that companies are taking a proactive approach to their defense. This means they are making sure that they have ammunition — claim charts — on the shelf for potential future negotiations. These are usually less expensive claim charts that show indication of use, but that don’t necessarily have a fully documented piece of evidence.
For example, it may mean that that only four out of five claim elements are well documented. The fifth element may be much more expensive to document so companies leave it on the shelf until it may be required and then finish the analysis just in advance of the licensing negotiation.
Mining for Data
Patent and data mining is a core function for any company seeking to tie technology development to business strategy. It provides a foundation for strategic decisions regarding IP acquisition and technology development. A case in point is the challenge of trying to map patents to a particular company which has a high revenue in digital signal processing. Patent mining will figure out which patents in a portfolio would most likely match that technology area, using a number of filtering techniques.
In another situation, a company in the initial stages of developing their licensing strategy will want to find the right match of their patents to different markets, companies and projects. Patent and data mining can help find which is the best match and what strategy to move forward with. In doing so, companies must think about their own customer space as they typically don’t want to sue their own customers. Therefore, a provider of communications network equipment that had a number of patents that were in a space that might read on cloud companies, might have a very good play. This is because the company would be working outside of its customer space.
Companies that successfully sort the grain from the chaff, that find their most valuable patents based on their business and IP strategies, will be able to use them strategically for years to come. Finding these patents alone is not always the best course of action. A collaborative approach with a company like Chipworks allows companies to leverage decades of patent intelligence speed the process and ensure the most comprehensive evaluation and work is completed.