Monday, 7 December 2015

Changing of the Guard as CPA, LexisNexis mop up analytics firms

"Changing of the Guard in the Patent Information Market", an informative and thoughtful piece by Hugh Logue, was posted on Outsell Insight last Wednesday.  Seeing the words "changing guard" and "patent", the literary reader might supply the linking concept, this being the word "Alice", recalling the opening stanza of A. A. Milne's famous verse 
"They're changing guard at Buckingham Palace.
Christopher Robin went down with Alice"
and remembering that the US Supreme Court ruling in Alice Corp v CLS Bank International has had more impact on the IP world than almost any other legal decision.  But this is no children's rhyme. Hugh Logue's article goes right to the heart of the role of patent analytics today and its prospects for the future.  In relevant part it reads like this, with emphases added in bold red text:
As Thomson Reuters exits stage left from the IP information scene, LexisNexis and CPA Global expand by acquiring two innovative software-as-service providers.

... Following Thomson Reuters' major announcement on 11 November that it is seeking potential buyers for its IP & Science Business, leading patent service and information providers CPA Global and LexisNexis have both announced they are acquiring innovative IP startups ....

Now with CPA Global
CPA Global, a provider of IP management software solutions and outsourced legal services, announced the acquisition of US-based IP search and analytics software provider Innography.  
This is CPA's fourth recent major acquisition of an IP solution provider; in 2013, it acquired First To File, a Silicon Valley-based developer of electronic document management systems specifically tailored for the IP industry. In 2014, it acquired Patrafee, a leading Nordic IP services provider, and patent search and analytics service provider Landon IP. CPA was itself acquired by private equity firm Cinven in 2012 ...

The acquisition of Innography will strengthen CPA's technology and analytics capabilities, and accelerate CPA's shift from manual services to an information as a service provider. ...

Meanwhile, LexisNexis has acquired Lex Machina, a Silicon Valley-based startup that provides legal professionals with a predictive analytics platform to use for intellectual property litigation. ...

Implications: Outsell estimated in 2014 that Thomson Reuters' patent-related revenues amounted to $360m, while LexisNexis' and CPA Global's revenues amounted to $60m and $14m, respectively. As Thomson Reuters' IP & Science business goes through the transition of being divested, LexisNexis and CPA Global have the opportunity to use any resulting brand and product confusion to grow their market shares. The acquisitions of Lex Machina and Innography will accelerate this, not least because of their existing customer base of top law firms and major corporations. The CPA deal underlines the continued threat to information providers from the growing trend among professional service companies expanding into the information market ...

LexisNexis clearly believes that the combination of its content and capabilities with Lex Machina's predictive analytics technology will enable it to build an array of new legal analytics solutions across different practice areas. In Outsell's opinion, there is huge potential for predictive analytics within the legal information space, and patent solution providers have been at the forefront of innovation in this area .... 

... What is certain is that we are at the dawn of a new generation of IP information providers in which big data predictive analytics solutions, with rich data visualization tools that serve both core and adjacent markets, will prevail.
This recent swathe of transactions leaves Aistemos -- a relative newcomer in the field, having celebrated its second birthday just a few weeks ago -- as the only independent IP analytics company left standing.  What will this mean for the sector? Will its growth attract new entrants or will the battling giants make the terrain too inhospitable for them as they seek to exploit the profit potential of their recent acquisitions? We await further developments with interest.


  1. Do independent IP analytics practices have a future? Only if their customers aren't looking for a one-stop shop for all their business and financial needs. Unless of course the big financial consultancies like PwC and Ernst & Young are outsourcing IP analytics to them if they don't have their own in-house capacity.

  2. It all seems to depend on strategic purchases by the big players.

    Also IP analytics is at such an early stage of development that customers won't have the knowledge and sophistication to know whether they have paid for a good result or not. So they rely on the brand name of LexisNexis or CPA as their guarantee that the analytics supplier is okay.