Monday, 29 August 2016

Looking for something? Data search via DataSearch

We have been reading about media and information giant Elsevier's DataSearch engine. This tool which, according to its logo (below, left), is still at Beta level, is described in the Mendeley Blog as "the next step in making researchers’ lives easier".  DataSearch facilitates searches for a variety of research data spanning both domain-specific and cross-domain data repositories.

A swift visit to DataSearch leads one to the conclusion that it is almost too powerful: over-broad search terms will trawl copious quantities of results. For example a search under the term 'aquaculture' will retrieve nearly 9,000 results; getting on for 17,000 results for 'beer' [that's almost as many hits as for 'Elsevier' ...] and nearly 18,000 for 'prosthetics' [these are all topics on which Aistemos has posted patent analytics features: see our posts on aquaculture, beer and prosthetics].

Searches for fairly recently coined terms feature substantially less, because of the time-gap between a neologism being minted and its use in the literature; thus 'fintech' produces just six research results, 'blockchain' eight -- and the over 400 results for 'drone' deal more often with mall furry insects that go buzz than with unmanned aerial vehicles.

Once obtained, search results can be filtered by the following categories: image, tabular data, document, video, raw data, file set and slides.

The sources include both those that are owned by Elsevier, such as ScienceDirect, and freely accessible public sector materials such as PubMed Central, the US National Institutes of Health digital archive of biomedical and life sciences journal literature. There is however no apparent linkage to registers of patents, utility models, designs or trade marks.

It's good to see offerings like DataSearch.  IP analytics can go a very long way in depicting the relative strengths, weaknesses, geographical distribution and life expectation of IP portfolios -- but there may still remain a need to drill down and ferret out research results that deal with a specific technical issue, the physical properties of materials used in manufacture, and so on. And that is where devices like DataSearch, which can pinpoint that sort of information with precision, can be so valuable.

Friday, 26 August 2016

WIPO's Global Innovation Index: more than just a beauty parade?

The World Intellectual Property Organization (WIPO) Global Innovation Index 2016 was published last week. Compiled with the assistance of Cornell University and INSEAD, the Index is a useful resource for economists, politicians, scholars and journalists, if not for businesses and investors themselves. While intellectual property lies at the heart of innovation in this exercise ('patent' and its derivatives appear 575 times in the text, with 'intellectual property' appearing 332 times), the definition of "innovation" is wide and open-ended: 
" ... it is no longer restricted to R&D laboratories and to published scientific papers. Innovation could be and is more general and horizontal in nature, and includes social innovations and business model innovations as well as technical ones".
According to WIPO,
The Global Innovation Index ranks the innovation performance of 128 countries and economies around the world, based on 82 indicators. This edition explores the impact of innovation-oriented policies on economic growth and development. High-income and developing countries alike are seeking innovation-driven growth through different strategies. Some countries are successfully improving their innovation capacity, while others still struggle.
You don't have to be an expert to identify the main signs of a successful, innovation-friendly country. The presence of a skilled and educated workforce, the availability of technical facilities for prototyping and developing new products and services, a thriving commercial environment, an alert and inquisitive customer base with cash to spend, a willingness to take reasonable levels of risk, the ability to supplement gaps through licensing-in and cooperation with others, plus a supply of cheap money, attractive taxation regimes and access to information concerning innovations made elsewhere are all in the plus column. 

On the minus side, innovation is dampened by a variety of factors which include and are not limited to the following: layers of government red tape and regulatory provisions, civil and international wars, aversion to change, the entrenchment of vested commercial interests and a weak infrastructure for legal protection.

This Index is a good deal more sophisticated and detailed in its analyses, as one might expect from a 451-page document that charts the deployment of over 80 separate criteria by which innovation might be measured and discusses its conclusions. 

The Top 25 countries in the WIPO chart read like this:
  1. Switzerland (Number 1 in 2015)
  2. Sweden (3)
  3. United Kingdom (2)
  4. United States of America (5)
  5. Finland (6)
  6. Singapore (7)
  7. Ireland (8)
  8. Denmark (10)
  9. Netherlands (4)
  10. Germany (12)
  11. Republic of Korea (14)
  12. Luxembourg (9)
  13. Iceland (13)
  1. Hong Kong (China) (11)
  2. Canada (16)
  3. Japan (19)
  4. New Zealand (15)
  5. France (21)
  6. Australia (17)
  7. Austria (18)
  8. Israel (22)
  9. Norway (20)
  10. Belgium (25)
  11. Estonia (23)
  12. China (29)

The lowest-scoring countries, in ascending order, are Yemen, Guinea, Togo, Zambia and Niger. Not far above them come some large and heavily under-performing countries:
Venezuela, Pakistan and Nigeria. Over-performers include Kenya, Uganda and Rwanda (which now sits 40 places above Burundi, with which it was once twinned). 

Is this exercise simply a beauty parade, with the most attractive jurisdictions leading the way, or is there more to it? On one level it assists countries at the bottom of the table to see what they must do, or whom they must copy, in order to improve their innovation standards. On another level, it provides investors with guidance as to which markets are likely to provide the most fertile conditions for them to grow their profits. 

The Index itself is however much more than a list of countries and criteria: there is plenty of text in which the subject in hand is described, analysed and explained -- and it is in the text that analytics and big data both receive a mention as facilitators of the innovation process. This blog team is pleased to see this mention and hopes that it will encourage businesses and governments alike to make wider and better use of the information which is often so poorly harnessed when innovations are conceived and commercially exploited.

You can access the full WI
PO document here.

Thursday, 25 August 2016

Due diligence: more value, less cost in corporate transactions

"More value, less cost in corporate transactions" is the title of the next Aistemos webinar event, which takes place on Wednesday, 21 September [details are available from the webinar website].  Its focal point is the role of IP due diligence, offering a fresh approach to this topic. 

About this event Aistemos has this message:
"Who enjoys being locked in a data room? During a corporate transaction, analysing information provided by a seller is often slow, expensive and unrewarding. The information is often badly organised, incomplete and provided late in the day. 
In this webinar, you will hear from Aistemos CEO, Nigel Swycher and a featured guest speaker on how IP analytics has managed to transform the approach to due diligence in major international law firms.

Over the course of 20 minutes, you will learn how accessing accurate data sooner is critical to both accurate valuation and risk allocation. The webinar will consider how to
  • instantly identify IP that is owned, licensed or litigated;
  • compare and contrast companies that own similar or conflicting rights;
  • analyse the cost of acquiring and maintaining IP portfolios".
(If you can’t make it for the webinar, register anyway and we’ll send you a recording)
If you can’t make it for the webinar, which commences at 1500 pm BST, why not register anyway so that you will be sent a recording?

For registration click here.

Wednesday, 24 August 2016

Innovation: too important to leave to employees?

Innovation? Not more bother!
"True or False: Employees Should not Be Bothered with Innovation?" That's the question posed in this article by Copenhagen-based strategic adviser Stefan Lindegaard. This piece raises some points that call for comment. We reproduce them here:
"... If executives believe that busy employees cannot be “bothered” to look into [innovation], this sends a strong signal that they do not prioritize innovation high enough. This is very dangerous in a business world where innovation has finally started to get high on the executive agenda [but maybe not high enough: we hope to report on this when we've collated and studied the data from our "IP in the Boardroom" survey, here] and where it seem as if the future winners are those who know how to make innovation happen.

Let me add two other perspectives to the comment:

(1) You should not let every employee work with innovation in a company at the same time, but everyone should be given the opportunity to contribute – some way or another. This can be through clearly identified ways for employees to suggest ideas and projects and to build on those of others. It could also be through frequent innovation campaigns such as internal business plan competitions or challenges [There is however no one-size-fits-all rule. A workplace that is strongly geared towards innovation will almost certainly have a template for reporting and rating innovation and invention, maybe along the lines suggested by Donal O'Connell here, while workplaces where innovation is only an incidental and infrequent by-product of other activities may adopt a different approach].

(2) Even people that are busy with their daily work should be focused on improving the organization and innovating where it is possible and relevant. This is where most innovation actually happens and we tend to call this incremental innovation [one wonders whether this is decreasingly happening where technology and innovations are increasingly outsourced or are the product of open innovation involving suppliers and subcontractors; in any event it demands a level of loyalty and commitment to the welfare of the employer that may be on the wane as the prospect of having a job-for-life with a single employer is less frequently realised]."
Another factor that can affect an employee's contribution to innovation is the availability of relevant information.  Free access to published patent applications, news of the latest scientific and technological development and abstracts or full texts of academic literature is now generally no more than a few mouse-clicks away from any person with a curious mind and a creative bent -- and there is rarely a need to be at one's place of work in order to investigate new avenues of thought.  Whether the employee wishes to share his thinking with his employer and colleagues, or instead to strike out by himself or use his ideas as bargaining chips when seeking employment elsewhere, is quite another matter.

Tuesday, 23 August 2016

Brexit and patents: yesterday's news or tomorrow's problem?

"The impact of Brexit on intellectual property" is the title of a paper released last week by the UK's Chartered Institute of Patent Attorneys (CIPA) --the largest and most influential body of IP practitioners in exit-bound Britain. The basic message can be simply interpreted as follows:

  • In the short term: no change
  • In the medium term: maybe a little change
  • In the long term: perhaps a little bit more change, and likely for the better.

In the short term, since the UK government won't be pulling the Article 50 trigger, which starts the minimum two-year negotiation period which may be extended, before the end of 2016, the UK will be exactly where it is until at least 2019.  

Beyond that, the UK's current intellectual property rules and those laws that affect IP without being part of it (eg competition law, data protection, regulatory data rules) won't change until Parliament takes steps to change them -- and it is the generally held view of innovation commentators that these areas of law aren't even close to the top of the government's "must-change" list.  It's actually the things that aren't going to change which are of greater note: the system for litigating patent disputes will not now be manipulated so as to accommodate the impending Unified Patent Court (UPC) -- though CIPA, which supports the UPC, will be working to seek ways of integrating the UK into this intriguing and untried patent litigation forum.

In the long term, who knows? If the system is working well post-Brexit, there will be no specific reason to make changes.  The UK's tax regime may compete more aggressively with those of the European Union's remaining Member States, in the form of a bigger Patent Box [the European Commission's take on an early version of the UK Patent Box was that it constituted a 'harmful tax practice'; in any event the UK will have to comply with the OECD's BEPS provisions].

Other points of interest in the CIPA paper include the following:
"... There will be no change for the holders of trade secrets as the UK is already exceeding the minimum standards as specified by the EU Trade Secrets Directive. There is no need for the UK to implement the directive and there may be advantages in terms of greater legal certainty from not implementing it. The UK has had a cyber security strategy in place since 2011, which is regularly reviewed and updated ...

... A great deal of work needs to be done to ensure that laws enacted during the UK’s membership of the EU are fully reflected in UK law after Brexit. Constitutional experts believe that the sheer volume of parliamentary time required to re-enact more than 50 years of EU law by individual Act of Parliament means that most will be re-enacted en masse by UK Regulation. CIPA will press the Government for such action in relation to IP rights ...

Supplementary protection certificates ... were introduced in the UK through EU Regulation as national UK rights and CIPA therefore anticipates that pending and existing SPCs will be unaffected ... However, some modifications may be necessary. For example, the Marketing Authorisation (MA) on which the time period of the SPC is based is currently the first MA in the EEA but it could be argued that this should become the first UK MA. In the longer term, it is possible that the UK may enact SPC rights after the UK’s exit that are more favourable to innovator companies that carry out research and develop new products....

The UK has a sophisticated and highly successful litigation system, including the innovative and affordable Intellectual Property Enterprise Court (IPEC). The UK court system will continue to provide a fair and balanced system for litigation between parties post-Brexit.

The UK is a signatory of a number of international conventions in relation to choice of forum (of the court, etc.), recognition of judgements and conflict of laws (for example the Hague Conventions). This will continue post-Brexit and will continue to make the UK a good place to litigate IP disputes.

IP professionals in the UK enjoy a high level of legal professional privilege, which allows clients to be completely open with their legal advisors. There will be no change to these favourable privilege provisions.

Parallel imports and exhaustion of rights: the position may change following a Brexit depending on the precise arrangement reached. This is a complex area and CIPA is working with stakeholders to achieve the optimum position. There is a possibility that a Brexit could enable a more advantageous regime for rights holders ..."
The CIPA seems to have taken a firm, realistic approach to the unfolding events that will mark the realisation of Brexit. For patent portfolio owners and their professional advisers the watchword is vigilance and diligence: change won't come instantly and it won't come without due discussion and warning. At this stage there is little more that one can sensibly add.

Monday, 22 August 2016

Integrating cost control into patent strategy: from dream to reality

"Patent strategy and cost management: how many is enough?" was the title of this month's Aistemos webinar. Now, just a week after the event, we can bring you the complete and unexpurgated recording. The recording lasts for just 25 minutes and 48 seconds, and it comes replete with PowerPoint presentation.

If you are still a sceptic when it comes to an appreciation of the many and varied uses to which IP analytics tools can be put, this recording may address your doubts.

You can watch the webinar in full here

Earlier Aistemos blogposts on different aspects of patent strategy and cost-cutting can be found here, here and here.

Friday, 19 August 2016

A matter of opinion: the IP in the Boardroom survey

With apologies to anyone who has either completed the nine questions that constitute the ongoing survey on "IP in the Boardroom" or who has decided not to, this weblog is again running the text, below, of an earlier blog post which appeals for your response -- ideally before the end of August.  

While we are grateful for the responses already received, we are acutely aware that the credibility of any attempt to gauge attitudes towards intellectual property-based decisions made by companies is enhanced when a larger number of opinion-holders express their views.  

Apart from the survey responses already notched up, we can report that over 20 respondents have voluntarily agreed to be interviewed so that their views can be recorded and studied in greater detail.  This process adds meat to the bare bones of aggregated answers that lists of questions generate.

So, here's the text of our earlier request:
... but of course we do!
This June Aistemos ran a short survey on attitudes towards what is best referred to as "IP in the Boardroom" -- the issues concerning the formation of business plans and corporate policy for companies that depend on intellectual property (whether their own or others'), the level at which IP-relevant decisions are taken and the identification of the data and analytical tools that are most appropriate for providing the factual platform on which projections are made and decisions taken. The results of this survey were published and formed the basis for a subsequent Roundtable on the same subject [reported, together with some of the survey's findings, in "IP Strategy in the Boardroom: around the Roundtable", here].

Following the success of the earlier survey and the level of interest it generated, Aistemos has decided to conduct a further, more extensive survey, and will be publishing the findings in a report later in the year.

The link to the survey is accessible by clicking here. Do please participate if you can, since the results are more meaningful when they reflect the views and positions of a larger number of respondents. There are only nine questions and, while the aggregate of the answers can be of monumental significance, they are all clearly drafted and truly easy to answer.

Thursday, 18 August 2016

Universities transferring technology: beacons of light, or groping in the dark?

"How universities can focus their patenting on technologies with the highest potential" is a recent post to Tech Transfer Central last week by David Schwartz. This post is triggered by an earlier item in Times Higher Education by Bruno Reynolds and Ben Oakley (from Isis Enterprise, Oxford University’s commercialization arm).  Reynolds and Oakley consider what is described as "... a common dilemma at tech transfer offices: whether to kill or pursue patent applications for technologies with unknown commercial potential".  Schwartz continues:
According to data from the Association of University Technology Managers (AUTM), the U.S. tech transfer industry generates over $2.7 billion each year in licensing revenue. However, Reynolds and Oakley point out, only half a percent of all currently active licenses generate more than $1 million a year ["only half a percent" may be viewed as a reflection of unreasonable expectations rather than as an indication that licensing practice is at fault.  For one thing, major potential licensees may purchase patents outright rather than take a licence in them.  Further, given that licensors have to recoup the cost of the licences they take, and that the same product or process may require taking licences to more than one patent -- and that licence revenue is likely to be generated for several years, the 0.5% figure may be good].

“There is clearly work to be done in building a logical, data-driven best practice into the everyday kill/keep decisions of university patent portfolio management,” say the authors. “There is also a need to keep sight of the additional factors that have to be considered by TTOs in their decision-making processes, such as delivering impact … and promoting entrepreneurship.” ["logical, data-driven best practice" is something that the methodology of patent analytics can help shape, but there is little to suggest that most university technology transfer officers even know what is on offer, let alone set aside the relatively small budgetary allocation that can assist the "data-driven" side of their profitable licensing equation].

A team of tech transfer executives at Columbia University recently published a study examining patent prosecution practices and outcomes from 25 major research institutions. The study finds that only between five and 20 percent of university patents are ever licensed [again, between 5 and 20% may be a pretty good figure -- especially if one considers the criteria adopted by research institutions in selecting their areas of research -- criteria that are generally not limited to commercial potential, as Reynolds and Oakley acknowledge].

... Here are Reynolds and Oakley’s tips for developing a strategy that favors patents with the highest commercial potential.
  • Integrated decision-making processes. Seek to license a university technology out to organizations that own related prior art; these parties have already demonstrated a vested interest in your innovation, and therefore make more promising potential licensing partners [sensible -- on the assumption that this also includes entities that don't own related prior art but take licences from others in order to pursue their interests. They are less likely to suffer from the "not invented here" syndrome].  
  • Portfolio analysis. Organizing your patent portfolio by academic department helps the TTO target resources to prevent opportunities from slipping through the cracks  [This is a good discussion topic. Prospective licensees don't organise their businesses by academic department, so the proposition that this will help prevent opportunities slipping through any cracks may need some support. One might have thought that, the more organisation by academic department, the more cracks exist between them ...]. In addition, sorting out the projects that have stalled or hit difficulties allows resources and budgets to be managed more effectively.  
  • Decide quickly. It’s important to collect market feedback early on, and to establish a policy of only going forward with strong opportunities. “It allows resources to be concentrated on stronger possibilities and avoids wasting the time of academics and TTO staff,” the authors say [feedback -- and any other relevant information -- may need to be collected more than once, since extraneous factors like manufacturing cost, environmental constraints, the availability of materials and the level of consumer interest and acceptance cannot be relied upon to remain constant over even a relatively short period of time].
There has been an increasingly sophisticated approach to university technology transfer since the pioneering days of WARF over 90 years ago. Yet somehow, despite the maturing of this practice, it has often been perceived as lagging behind its potential to deliver quality research to industry and quality earnings for academic institutions.  Making use of intellectual property analytics may assist in closing the gap between potential and realisation.

Tuesday, 16 August 2016

Industrial (Robotics) Revolution: Dawn of the Cobots

Robotics still struggles to get
rid of ancient stereotypes ...
The series of Cipher Snapshots which we have featured on this weblog has attracted a considerable quantity of favourable attention [a list of blogposts involving the fruits of using the Cipher IP analytics tool over the past year can be found here].  Today we bring you yet another Cipher-driven post, which will be something of a revelation for anyone who is not yet familiar with the "cobot" (this neologism combines the words "collaborative" and "robot").

Industrial (Robotics) Revolution - Dawn of the Cobots

  • Traditional industrial robotics are now being challenged by low-cost, easy-to-deploy cobots
  • Incumbents are actively patenting and acquiring companies in the cobot space
  • Pure play cobot companies are rapidly growing their portfolios
  • Incumbents have a broad geographic coverage while the cobot entrants’ are typically narrow
Robots taking over the world is arguably an unstoppable trend. Global spending on robotics has grown by roughly 80% between 2010 and 2015 to $26.9 bn and is expected to more than double in the next 10 years (figure 1, below). A more nuanced view of the robotics industry uncovers the advent of a shift in the market – the emergence of the cobot.
Traditionally robots’ main industrial applications call for extraordinary precision. These robots need complex programming, are large and most of all expensive. The new generation of cobots manufactured by the likes of Rethink Robotics, Universal Robots (acquired in 2015 by Teradyne) and Gomtec (acquired in 2015 by ABB) contrast these characteristics by being low-cost, easy-to-deploy, simple-to-program robots that work side by side with production workers.

This emergence of cobots is mainly driven by advances in technologies such as artificial intelligence and sensor technologies coupled with increases in computing power. The results are robots that will revolutionise production. Another example of this is researchers teaching them to learn how to do tasks rather than them being programmed.
Figure 2 shows an overview of the industrial robotics patenting market. There is a clear divide in terms of patent portfolio size. The large incumbents are European (Kuka and ABB) or Japanese (Fanuc and Yaskawa) traditional robotics manufacturers. On the left hand with small patent portfolios, out of the 5 fastest growing companies 4 are cobot manufacturers with Amazon (who acquired Kiva Systems) being the exception.
While figure 2 showed that indeed the cobot manufacturers show high growth and momentum, the relevant comparison is to see if the traditional robotics manufacturers are showing interest in cobot related technologies. Figure 3 compares the growth of cobot and overall portfolios of the traditional robotics manufacturers. Two things can clearly be seen; cobot related patenting is relatively outperforming the overall patenting of these companies and that cobot patenting has been going on for a number of years.
The fact that patenting has been going on for many years allows us to plot the age profile of cobot patents comparing the leading incumbents. Figure 4 shows that ABB in comparison has the oldest portfolio. Kuka and Fanuc display medium aged portfolios with more evenly spread out patent families. Yaskawa has a fairly young portfolio with steep concentrations around the 3-year mark. All of the major robotics companies seem to hold a significant number of cobot related patents.
Figure 5 shows the geographical coverage of the companies’ cobot patent portfolios. Overall, large robotics manufacturers have a wider geographical coverage than cobot manufacturers. Yaskawa stands out as having the narrowest coverage among the major robotics firms. Rethink Robotics and Universal Robots have 100% coverage in the US with some coverage in Europe while Gomtec exhibits full European coverage.

There seems to be a change of tides in the industrial robotics industry. The divide between the incumbents and entrants is enormous on various levels: size of total portfolio, age profile, geographical coverage. The incumbents do also have reasonably sized cobot patent portfolios and appear to be growing.

The new players are too small to be a threat to the market leaders within their main business of industrial robots, but can well compete in the cobot space. As they create innovative products with lower price tags, enabling especially small companies to use robotics in their production, they can find their niche and disruptors such as Rethink Robotics are revolutionizing the market. We will see if they have the ability to turn the tables on the market leaders despite their small portfolios.

Monday, 15 August 2016

Trade secret asset management: a challenge, but not a hopeless one

Secrets: best when well managed
"Trade secret asset management" is a case study by Donal O'Connell (Managing Director, Chawton Innovation Services Ltd) that is worth a read (you can read it in full here). Regular followers of this weblog may recall that Donal has contributed content to it from time to time, and his most notable article is also on trade secrets management: it's "Trade secrets: a round-up of key issues" (here), which we hosted last December.

Since trade secrets represent assets that do not appear on intellectual property registers, that are hard to protect and difficult to assess and value, they represent a major challenge for IP analytics. They also pose particular problems for corporate IP management: they can be frustratingly tricky to identify and define -- and may be incorporated into the knowledge and skills sets of key employees who leave for other companies.

Trade secret management tools do exist, as Donal explains, and make a big difference not just to the degree of competence in terms of corporate management but also in terms of confidence -- when a company feels that it has a firm grip on the issues raised by trade secrecy and can make and implement its decisions on a more secure, better informed basis.

The case study which Donal has posted involves an innovative company headquartered in Europe but with operations in a dozen countries around the world. As he describes it, the company employs approximately 2,600 people worldwide. It is a market leader in its particular sector. The company's IP function is discharged by just seven people, located in offices in different countries but with the support of external law firms -- factors that can also place stress on trade secrecy policy.

This case study shows that trade secrecy asset management is far from being a hopeless task, so long as care and attention are given to proper processes, reportage and documentation. A follow-up warts-and-all case study is hinted at for 2017. We look forward to reading it.

Thursday, 11 August 2016

In praise of IP due diligence: more value, lower cost in corporate transactions

Cleaning up after a mega-M&A
is a truly tedious task
Intellectual property law and practice is not a place where fact and fantasy often meet.  This is particularly true of tales of due diligence, where fairytale endings are never contemplated, still less found.

It has been said of due diligence that, in the world of intellectual property practice, it is both the Cinderella and the Ugly Sister.  It's the Cinderella because, when it comes to billing for professional services attending any IP-driven satisfaction, it's the service that clients are least willing to pay large sums for, and it's the Ugly Sister because, when it comes to being sexy, it's a lot less appealing than litigation, negotiating transactions and other areas of IP practice that are more personally gratifying for whoever is tasked with doing the work. Worst of all, due diligence requires a great deal of attention to vast quantities of detailed information -- often without any sense of which specific items of detail might ever turn out to be of interest or importance in the future.  At least in the world of fairytales and fantasy, when kisses a large number of frogs, one has the expectation that one will turn into a handsome Prince. But in the world of due diligence, the frogs will stay pretty much as they are.

IP analytics operates in the zone of fact, not fantasy -- and while it can't turn frogs into Princes there is a good deal it can do, to improve the quality of decision-making and general understanding that underpins any large corporate transaction and to remove layers of unnecessary drudgery from the process of checking the legal basis on which that transaction is built.

The example given below (with the names of parties removed), puts IP analytics through its paces and shows, at a general level, how it can perform.
Case Study: IP Due Diligence


Due diligence can consume significant time and resources, and clients are reluctant to pay for commoditised work. Law firms are now deploying IP analytics to deliver fresh insight and to secure access to higher value and more substantive assignments. Cipher was designed by a team with over 30 years’ experience of IP due diligence, and is specifically designed to reduce costs and increase efficiency in an area which is increasingly important.


Frequently M&A and other corporate transactions involve companies with large and complex patent portfolios. While there is a need to understand the importance of these rights to the transaction, clients are highly reluctant to pay for the mundane verification of ownership and renewal. However, more detailed analysis involves aggregating and correlating data from a wide variety of sources. Even basic tasks such as analysis of status, age, territory and clustering are typically uneconomic and impractical. As an illustration, a manual review of 500 patent families would take over a month's labour on the part of a suitably trained person.


Cipher is able to respond to these challenges as follows:

1. Data aggregation

Cipher aggregates curated data relating to patent ownership and use:
Figure 1
Instant access to this combination of datasets makes it possible for the first time to deploy IP analytics into the mainstream of corporate transactions.

2. Technology areas

The commercial driver of a transaction is often a specific technology. Cipher is able to cluster the patent families in a target’s portfolio into distinct technologies. This capability enables teams to focus on what matters - and not waste time on distractions.
Figure 2
Figure 2 illustrates a portfolio: the largest cluster is Machinery, but that still only represents 39% of the portfolio.

3. Comparables

In due diligence, the most important thing is to have an understanding of the age and geographical profile of the patent rights owned by the target, and a qualitative comparison to similar rights owned by others (comparables).
Figure 3
Figure 3 is a Cipher heatmap which identifies other companies that own similar technologies to the target - sorted by reference to the target’s clusters. This is a classic analytics solution to a task that would be impractical to replicate manually at any reasonable cost or within any sensible timeframe.

4. Impact

Cipher provides a quantum leap forward in efficiency and added value:
  • Cost: using IP analytics for due diligence transfers the burden of low value/high intensity work to machines, reducing costs and releasing resources to higher value work. 
  • Focus: analytics reveals issues that would routinely go unnoticed. This provides the opportunity to deploy resources to the investigation and resolution of IP issues that will make a difference. 
  • Client satisfaction: Cipher provides insight beyond the reach of traditional due diligence. 
Differentiation and efficiency in the delivery of legal services is at the heart of trusted adviser relationships. At a time when IP issues are increasingly being elevated to board level, the IP challenge is to deliver insight that enables clients to make better decisions.

Wednesday, 10 August 2016

Subsidised patent infringement insurance: a good idea -- or a lazy substitute for one?

Picking up on a recent Katpost by Ellie Wilson, IP Finance blogger Mike Mireles comments ["Subsidized IP Litigation Insurance in Japan and Increased Enforcement in China", here] on an intriguing development in the Asia-Pacific.  The big news is that
" ... the Japanese Patent Office (JPO) has announced a program whereby half of the premiums for IP infringement insurance will be covered. The program is a partnership between the JPO, the Japan Chamber of Commerce and Industry, The National Federation of Small Business Associations, and three insurance companies [presumably the interests of Japan's mega-companies either do not require their involvement or are being looked after by the JPO]. Specifically, the subsidy is directed at making affordable IP infringement litigation insurance for SMEs that are operating in countries outside of Japan [that's a lot of countries: the World Intellectual Property Organization has 188 member states, all of which have patent protection of one sort or another -- and Japanese businesses have extensive foreign trading relations]. The announcement appears to cover both the need for the SMEs to fund IP infringement litigation against alleged infringers and to defend litigation [this makes sense, but no explicit mention is made of revocation proceedings and patent litigation on antitrust and competition law themes, which can also affect SMEs]. Notably, the announcement explicitly mentions China as a market of concern; although my guess is that a concern with so-called patent trolls in the United States is also an issue [the first half of 2016 has seen both a decline in the volume of US patent litigation and the quantity of troll-based literature, but the underlying risk of abusive patent litigation is still worth insuring against]. ...

Given the importance of SMEs to economic growth and job creation as well as the general high cost of litigation, it will be interesting to see if more countries move to subsidize IP litigation insurance [there may be problems in introducing subsidized patent litigation premiums in the European Union, where care must be taken to show that they are not a form of disguised subsidy of national businesses that may have a distorting effect on competition]. ..."
Professor Mireles ends by asking whether there are there any other countries that already subsidize IP litigation insurance. This weblog knows of none and notes that, as of the date of posting this article, no reader has posted information concerning any on to his earlier blogpost.  If you do have any relevant information, please do share it with him.

This weblog comments that the main issue regarding patent litigation insurance is not how much it costs, but rather how much it covers in relation to what it costs.  In the private and unsubsidised sector, take-up for IP insurance over the past three decades has been very slow, and a combination of insurer-protecting exclusions and high pricing, often based on an unscientific calculation of risk that makes no use of IP analytics, may be the main culprit,  IP analytics can do a great deal to frame any patent-related insurance risk within genuine factual terms of probability, and this might bring premiums down to the point at which publicly-funded subsidy is unnecessary.  If this is correct, then the Japanese subsidy is no more than a lazy substitute for the serious data analysis that is crying out to be done.

Monday, 8 August 2016

The Cipher tool: IP analytics in theory and practice

Readers of this weblog will have spotted the occasional reference to Cipher, the Aistemos IP data analytics platform which combines a vast aggregation of patent data with a variety of visualisations. There is plenty of information about Cipher on its web page, here, but not everyone has the time or the inclination to spend time reading text off a screen.  Accordingly, for the interest and edification of anyone who has two minutes to spare, there's a 118-second presentation which summarises Cipher succinctly: "Patents -- at the heart of the information revolution?" You can view it at your leisure by clicking here.

If you want to see what Cipher is capable of delivering, we've used it in the preparation of a number of our earlier weblogs. Do feel free to check them out and see for yourself ho handy Cipher can be:
* "Patents surrounding Pokémon Go – has someone caught them all?" August 2016

"Something new under the Sun? Photovoltaic patents take the limelightJuly 2016
* "Cutting unnecessary portfolio costs: an engineering company makes savings" July 2016

* "Expanding a professional relationship: how can IP analytics help?" June 2016

* "Microsoft and the missing Link? The LinkedIn deal has a patent profile" June 2016

"Steel: facing an innovation meltdown?" June 2016 
* "Cybersecurity: an update" June 2016

"Competitor behaviour revealed:an exercise in software patent dataMay 2016 
"Food for Thought: Trends in Hi-tech food and nutritionMay 2016 
* "Who is driving autonomous cars? A profile of patenting activity" May 2016

"Unicorns -- their message for the real worldApril 2016 
* "Rovi's patent position: not so bad after all" April 2016

* "Medical M&A – more than meets the eye?" March 2016  

* "White goods in the grey area: is there (still) a connected appliance ecosystem war?" March 2016

* "Patents: what lies at the heart of defibrillators?" February 2016

* "Drones: up in the air, but grounded in patent protection" December 2015

* "What we know and what we don’t: a review of patents for cybersecurity" December 2015

* "Nasdaq: shifting tides of value and the IP tidal wave" November 2015

* "Herding catfish? Time to cast a wider net over the aquaculture market" November 2015

* "Prosthetics: the next IP battleground?" October 2015

* "Strange Brew: beer patents under the microscope" October 2015

* "Car manufacturers or part suppliers: who’s in the patent driving seat?" September 2015

* "HERE today, gone tomorrow - but still here: the paradox of Nokia" August 2015

* "Fitbit wearable, profits bearable -- patents comparable?", August 2015

Thursday, 4 August 2016

Creating a global patent strategy: some finer points

"Creating a Global Patent Strategy: Advice from Silicon Valley" is a question-and-answer post on IP Folio which brings the views of an experienced and well-informed unnamed client. The interview contains a number of interesting points and perspectives. We noted the following, in particular:
... When do you go global? When is the right time?

Going global needs to be part of your discussion with the executive team. It must reflect and support your global business strategy and implementation roadmap, both in terms of geos and timeline. [Not everyone understands the word "executive" in the same way. The decision to go global with any IP strategy should, we believe, be taken at Board level and given the fullest available top-down support] ...

Are you considering cost when making this decision?

Not exactly, but in my experience the basic cost to get a simple patent family filed across five countries is probably about $150,000 over the 20-year life of the patents. This is a general estimate based on a very efficient prosecution practice, and a lot of money, particularly for young companies [given that much of the cost of a patent is front-loaded to the earliest part of its life, and that the preponderant majority of granted patents don't see out their 20 years thanks to technological advances and other reasons, the costing should look carefully at cash flow and possible borrowing requirements rather than just at the bottom line]. ... 
Do you distinguish between offensive and defensive patents?
Absolutely. You can go global for defensive reasons. Let’s say that you need to secure manufacturing rights in a country. While you may not be selling in Taiwan, you may be contracting out manufacturing with someone there. If so, you better think about whether you have the protection needed to keep manufacturing in Taiwan. Where do you see your product or service revenue going in the future? This is an important evaluation of market evolution. Are there areas where you are likely to have IP wars in the future? [This sort of defensive strategy requires a fair bit of thinking outside the box: it may be worth patenting not just in the country where your manufacture is outsourced but also where current and potential future competitors do their manufacturing or outsourcing too]. ...
We leave readers with the concluding words of this piece, which make encouraging reading for the IP analytics sector:
"Everyone should understand that there is no infallibility in IP. Hindsight and looking backward will inevitably throw light on decisions that proved wrong. Although 100% success is 100% unlikely, extensive research and methodical planning will increase your odds".
While the ultimate shape of any patent or other IP strategy will depend on many factors other than the fruits of Big Data-crunching and patent analysis, any decision that is based on reliable information can be expected to deliver far better results than a decision that flies in the face of facts. And IP analytics can help with the more mundane side of things too, by assisting in the making of the right cost savings [on which see "Cutting unnecessary portfolio costs: an engineering company makes savings", here]. 

Wednesday, 3 August 2016

IP in the Boardroom: now for a more extensive survey

Compared with other intelligence gathering methods,
the Aistemos IP in the Boardroom survey is a real joy
This June Aistemos ran a short survey on attitudes towards what is best referred to as "IP in the Boardroom" -- the issues concerning the formation of business plans and corporate policy for companies that depend on intellectual property (whether their own or others'), the level at which IP-relevant decisions are taken and the identification of the data and analytical tools that are most appropriate for providing the factual platform on which projections are made and decisions taken. The results of this survey were published and formed the basis for a subsequent Roundtable on the same subject [reported, together with some of the survey's findings, in "IP Strategy in the Boardroom: around the Roundtable", here].

Following the success of the earlier survey and the level of interest it generated, Aistemos has decided to conduct a further, more extensive survey, and will be publishing the findings in a report later in the year.

The link to the survey is accessible by clicking here. Do please participate if you can, since the results are more meaningful when they reflect the views and positions of a larger number of respondents. There are only nine questions and, while the aggregate of the answers can be of monumental significance, they are all clearly drafted and truly easy to answer.

Tuesday, 2 August 2016

Patents surrounding Pokémon Go – has someone caught them all?

If you have been on the Moon for the past month and have only just returned, you might just have failed to detect the existence of the phenomenally successful Pokémon Go -- is a free-to-play, location-based augmented reality game that has already spawned its own vocabulary and counter-culture. Readers of this weblog may or may not be players, but they may be pleased to learn a bit about the legal bases upon which such games are built. Accordingly here's our latest Cipher Snapshot, focusing on the highly topical issue of Augmented Reality. 


Patents surrounding Pokémon Go – has someone caught them all?

• Augmented Reality (AR) technology has seen a surge in innovation since 2010
• AR relies on many technologies and has many applications
• Main technologies are head-mounted displays and image processing
• Siemens were pioneers and hold a large and mature patent portfolio
Pokémon Go has proven that AR is here to stay. Granted, the excitement is not just about being able to see Pokémon in real life surroundings, with the help of your device’s camera. Its appeal also comes from the immersive user experience, in which players find themselves in an alternative world in which they are surrounded by characters they know and love. It’s all about discovering, locating, tracking and collecting those characters.

The craze surrounding this game has led Nintendo to more than double its share price, adding 15 billion USD to their market cap in just 13 days in July 2016. This suddenly makes the AR market very interesting for a number of players, and as the technology is not novel, having been around for a while, the question is who might benefit from this craze?

AR applications rely on a large number of underlying technologies, naturally tied to mobile devices but also specific applications or a combination of technologies.

Figure 1 breaks down currently active AR patents by technologies. The two biggest areas, making up more than half of the assets, are “Head-mounted AR display” and “Image processing” patent families. This is a good reminder that Pokémon Go is not the first attempt at AR. In 2013 and 2014, Google had their own craze with the now discontinued Google Glass; back in 2011, Qualcomm had an AR showcase at the CES show in Vegas, with something much more similar to Pokemon Go; and we see a number of related patent-intensive technology areas, such as mobile devices, GPS/location and AR gaming but these are not the only applications. The breadth of the application possibilities of AR are shown by smaller clusters within robot control and medical applications.

The two key questions are therefore: how old is this technology and who owns it? Figure 2 shows the split between applications and granted patents among the biggest innovators in the market. Notably, most players have a large pipeline with a large proportion of pending patents. Microsoft, which is soon releasing the “HoloLens”, has the largest amount of granted as well as total patent families. In contrast to other companies, Pantech, Siemens and Amazon have mainly granted portfolios. Magic Leap – the company that has raised major funding by the likes of Google and Alibaba – has the largest fraction of pending patents among the big players.

Figure 3 gives us a timeline view of innovation, hinting at who might have foundational innovations. Most notably, Siemens were pioneers with dozens of patents from 1999 to 2003, mainly related to medical and industrial applications. In fact, there are only a handful of other AR patents from that same period, with overall filing activity taking off in 2010. Pantech stands out with a single peak in 2010 and seems to have stopped the pursuit of more patents in the area. Microsoft were most active 2011 to 2013 until Magic Leap, with a strong increase in filing, surpassed them in 2014. Both Microsoft and Magic Leap focus mainly on technologies related to head-mounted AR devices.

Figure 4 shows a dynamic view of who is gaining and losing “patent market share” within the different technology areas. The size of the rectangles indicates the size of granted patent portfolio (i.e. the company’s share of the current patent market) and the colour indicates change in “market share” from 2014 to 2016.

Qualcomm, LG and Microsoft are gaining market share across the board, whereas incumbents Siemens and Pantech as well as Google have lost most patent-related market share in the past two years.

The AR market shows a lot of movement and tremendous growth lead by major companies. Different actors are moving in and out while the general trend is increasing. Although AR patenting has seen an enormous increase in filing since 2010, the “elephant in the room” is perhaps the fact that Nintendo is not a strong player in this space. In contrast Siemens, which might not be making AR headlines, stands out among the companies as it holds approximately 20 very early patents from between 1999 and 2002. This gives Siemens the opportunity to emerge as one of the big winners in AR as this will, if Pokémon Go is a sign of things to come, no doubt be another IP battlefield.

You can also access this Cipher Snapshot here. Other Cipher Snapshots can be accessed here.