Navigating the intangible landscape: in data we trust
The big data revolution has made its mark on many industries from agriculture to e-commerce. Information about almost anything is available at the touch of a smartphone screen, and data providers such as Thomson Reuters and Bloomberg have built vast businesses peddling instant facts and figures. Yet the intellectual property (IP) sector has remained stubbornly resistant to change.
This is due to one chief culprit: systemic data blindness across the IP industry. Information about different kinds of IP -- even patents and trade marks, which are ostensibly in the public eye -- is often difficult to access, or worse, can be incomplete or even inaccurate.
The perils of data blindness
Business leaders would never be content to accept inaccurate information about revenue and profit, or settle for half a competitor analysis, yet they have been forced to make do with half the story when it comes to IP. In a recent report, financial services giant EY claimed that big data analytics was one of the most disruptive forces to impact deal-making this year, but the forecast made no mention of IP as a sector facing change. Yet change it must.
Sir Francis Bacon once said, "Ipsa scientia potestas est," knowledge is power, and this has never been more true than it is today. IP data is increasingly becoming a crucial component of corporate decision-making. Information about patents, trade marks, licensing revenue and other considerations can make or break deals and decide whether a new product is to be developed or a new service to be introduced. If up-to-date and correct IP data is not available, these strategic decisions are much harder to make. For example, even in the US Patent and Trademark Office data, the name ‘International Business Machines’ is spelled more than 800 different ways, which makes the patent database almost impossible to search effectively.
Sir Francis knew that good data
helps bring home the bacon ...
“Outside the major patent offices, there can be cases where filings are in a poor state, lost, or have other problems,” says Justin Watts, IP partner at global law firm Freshfields. “It’s hard to get one’s hands on the data, so you have to work with that uncertainty. That means lots of warranty clauses in deals and an assumption that there will be a good degree of post-closing work so that IP rights go in the right places.” This situation is far from ideal, he adds. “But we have to do deals in the context of the current system.”
The state of play
Aistemos’ recent survey of 80 high-level executives from some of the world’s most innovative companies, including BAE Systems, Siemens and Bayer, demonstrated a struggle to get hold of the right IP information within one’s own organisation, let alone access data regarding IP rights in a client or competitor corporation.
When asked, “Do you have access to the information you need relating to your organisation's IP?” the majority of respondents said they could “always” review data about registered IP, but the tally dropped significantly for IP licences and IP disputes, falling even further for IP valuation.
It is professional services and accountancy firms that are finding it toughest to get the information they need to advise adequately on deals. While registered IP, such as patents, were accessible most of the time for these respondents, data on licensing, disputes and valuation were only available “sometimes” for the majority.
The research shows that the advisory community knows that their clients have data, and they want to use that data to give better quality counsel, but they are being stymied by the current system. If this is the state of play within some of the world’s innovation giants, it suggests that data deprivation must be widespread in the mainstream.
Drowning in data
Last year, the Economist Intelligence Unit found that 60pc of executives were already using big data to generate more revenue within their organisations, while 83pc claimed that it was making their existing range of products or services more profitable. As companies produce more and more data, the insights derived from this information have the potential to be even more disruptive. In the world of IP, data is becoming more readily available, not only because of tools such as Cipher, but because of changes to how data is catalogued and displayed. The European Patent Office, for example, has opened up access to more than 90m patents through its free tool, Espacenet. Google has also moved into this space, providing indexed and searchable IP rights through Google Patents. But it’s almost impossible for a human being to analyse hundreds of thousands of relevant patents; that’s where machines come in.
“There is large amounts of patent and IP related data available,” says Michael Durst, chief executive and founder of Itonics, an analytics and software firm supporting R&D. “This means more data that has to be researched and analysed and evaluated. It’s coming from all over the world now, especially China and the US. But the big data revolution has not really arrived; it’s still in the making.” Yet many of the systems devised to help companies access and manage IP data have not kept pace with the clients they serve. “A lot of the existing software looks like it’s from the eighties,” Durst says. “Companies are still turning to external resource, such as specialist law firms, to fill the gaps. Companies like Aistemos are showing that it’s possible to cherry pick the relevant data and analyse huge pools of data, but it is early days.”
As the available data pool swells and machine learning becomes more sophisticated, it will become increasingly possible to crunch information in a way that is useful and effective. “There’s no doubt that the direction of travel is consistently towards more complete datasets and better access to data,” says Freshfields’ Watts. “But there’s still a long way to go.”
An incomplete picture: better than no picture at all
Customers shopping with the e-commerce giant Amazon have become accustomed to the use of big data to prompt suggestions regarding new purchases. Sometimes, the algorithm gets it right; other times the products listed miss the mark. Consumers and businesses alike accept that big data cannot always give a precise answer -- but that it may provide a helpful nudge in the right direction. This is true of IP data as well as internet shopping.
“You know you’re looking at an incomplete picture, but tools like Cipher give you enough information to ask the right questions,” says Watts. “Cipher’s reports were very useful in a recent transaction. I was able to rapidly get to grips with a company’s IP structure and identify two-dozen key questions about how the company operated its IP and the vulnerabilities that needed to be addressed. That ability to ask sensible questions was very important indeed. The alternative is to do nothing, which is worse. It is possible, given unlimited time and an unlimited budget, to dig out most of the IP cuinformation that is pertinent to deals, he adds, but that is rarely an option. “We work on very short timescales in M&A and clients are very cost sensitive.”
“Results aren’t always clear when reviewing available data,” admits Durst. “You must ask yourself if this really provides a clear view, or are we just looking at a specific segment? Can we compare this data to other data sets? But it’s better to look at incomplete data than look at nothing at all. Even a data set that is only 80pc complete gives you a solid idea of what’s going on in the market.”
Big corporations in established industries often know what their large rivals are working on but struggle to keep up with innovations at smaller firms or start-ups, which may be moving in new and unforeseen directions.
Both Watts and Durst see tools such as Cipher as being a tool for innovation more than a weapon for litigation. “Innovation isn’t about just having an idea and creating a product, it’s about finding where the opportunity lies,” Durst explains. “If you can see patents were filed in last three years in the markets you’re playing in, or are looking to move into, you can decide what to focus on.”
Working towards a more informed future
In recent years, new online databases have been launched, attempting to provide accessible resources for those outside the IP bubble. Aistemos’ own tool, Cipher, does exactly that: aggregate, analyse and, importantly, visualise IP data to support strategic decision-making.
IP experts all seem convinced that within the next decade, big data and the move towards further transparency in the IP sector will make it much easier for companies to find opportunities, innovate, and protect their know-how.
Aistemos CEO Nigel Swycher predicts the future in this way:
Earlier posts in this series:“In a world where innovation is the life and soul of major companies, it is essential that there are reliable ways to measure and compare performance. There is no shortage of data, and advances in AI and machine learning now make analysis available to everyone. In 5 years, we will be faintly amused that it took so long to bring transparency and understanding to the world of IP.”Trust will be more and more crucial as time goes on. It will not be enough to access the right IP information, but rather it must come from a trusted provider who can break down and analyse these vast swathes of facts and figures and present them in a format that is digestible by everyone at all levels, and not just by the IP experts.