Reports on smartphone or drug patent battles have been regular news feed in the IP industry lately. A great deal to infer from these reports is the impact that Intellectual Property (especially patents) exercise on an organization’s business.
Years of investment and research on a technology is based on potential revenue that can be generated and provide returns on investments. This is when building a strong patent portfolio brings rewards to a business. Licenses, mergers and acquisitions hold value in a global economy where expenses and profits can be shared, and patents function as promising assets.
Patent assignees can opt for the following models:
Top players in a technology area often get a new invention licensed, if case of threat to their existing product. Further, in-licenses can help introduce products in a new region, outside the hold of a licensor. The license further provides a way out of additional burden associated with acquisitions, while providing an opportunity to share profits.
An assignee can license their invention to another organization. These are mostly universities and research institutes that have an IP cell aimed at out-licensing in-house R&D. Individual inventors are also common in this category. Organizations not involved in manufacturing or selling can depend on the organization having better operations facility and sales network.
Assignees with complimentary IP grant licenses to each other. This is a common practice for mutual benefit. Corporations also create spin-offs to create a niche IP pool.
Keeping tab of competitors’ IP and their value is therefore crucial for organizations. Specific business and market based searches help achieve this objective. The searches provide insights about the competitors in a subject technology, their rankings based on their patent portfolios, revenues, strength of their portfolios (based on licenses, term expiry, and citation analysis etc.). Further, an organization seeking researchers for collaborations on various projects can access the information on top inventors working in the subject technology, their present organizations and locations. Further, the analysis involves market news based on growth indices such as CAGR (compound annual growth rate) for an upcoming sector, expected revenue rise etc. Market research of similar products may be performed, which may comprise a similar product’s market presence, sales, growth over the years, expected advancements and corresponding revenues.
One of the important business aspects for a corporation is to periodically review their business direction, in terms of the strategy implemented so far, return on R&D investments, impact of all the patent filings on revenue, including licenses and a comparative analysis of the corporation with competitors. Therefore, the searches provide Benchmarking analysis that includes a detailed analysis on the competitors. The competitors are studied on various inherent and external factors. The inherent factors include yearly patents filed and ratio of R&D investment to the filings etc. Since organizations have different business models, weighted average of such ratios is represented corresponding to years. The ratios provide a measure of the competition thrown at a corporation by the competitors. External factors represent licenses to other corporations, tie-ups with research institutes and universities that are filing patents etc. The analysis displays a corporation’s relative ranking with competitors and aids in understanding competitors’ strategies on innovation. The analysis may resolve conflicts regarding unutilized products/patents by providing a roadmap to licensing and mergers/acquisitions. Such benchmarking serves as a business review that can be performed quarterly or yearly.
Informed business decisions are not restricted to a corporation’s ranking among competitors alone. Further, competition analysis allows a corporation to get access to detailed and specific data regarding competitors’ filing patterns, expected investments, future licensing and partnerships etc. The corporation may thus, resort to rebuild their own strategy, financing and expenditures. The report may include competition analysis for jurisdiction of interest. For example, filing costs for patent families in different jurisdictions to be incurred. Additional information on costs and timelines may be provided as well. The complete analysis can be restricted to a competitor functional in same technology with similar portfolio as the corporation of interest.
Based on requirements, searches can be customized to provide deciding information on partnerships, mergers and acquisitions, due diligence, risk assessment among others. For example, two competitors teaming together to bring a blockbuster drug in the market may act as a deterrent for a third organization that might have to resort to license agreements with the former two. The organization might also advance to aggressive patent filings to secure current investments. Similarly, an upcoming start-up may want to undergo risk assessment to avoid possible IP conflicts from non-practicing entities by keeping a tab on the expiration of competitive patents. Such search and analysis is as important to an industry giant as to a small player. A stable corporation can buy patent portfolios of small corporations or individual inventors that are short of investors or funding. Due diligence before taking over a patent portfolio can uncover inactive patents (abandoned publications/nearing expiry patents) and patents embroiled in infringement suits and litigation that can possibly be too costly to be an asset. Another example is about a key player expanding globally. The player can monitor patent portfolios in the jurisdictions of interest by assessing the strongest patents, the inventors, the assignees actively filing for patents and national licenses.
The searches and analysis rely on a number of free and paid databases, publicly available resources such as company blogs, product brochures, investment and partnership data.
Hence, irrespective of market share, business search and analysis is imperative for each organization investing highly on R&D to weigh the advantages and challenges of their business decisions.
We at OutsourceIP are well versed with the business of our clients and perform the searches with the utmost technical sophistication while keeping in mind the business requirements of our clients.