http://webdev.innography.com/blog/ en tstading@innography.com Copyright 2008 2008-12-18T01:37:00-06:00 http://www.innography.com/blog/post/op/ http://www.innography.com/blog/post/op/#When:01:37:00Z While we’ve all known the U.S. has been in a recession for some time, NBER finally made it official, admitting that the current recession began in December 2007. This revelation begs the question, “What now?” My last post described how past recessions have led to increased litigation, but it didn’t cover innovation trends. The latest and most interesting of these trends is Open Innovation. Open Innovation is most crucial in a down market when costs-cutting measures and layoffs are adopted and companies are once again required to do more with less. They no longer have the luxury of large R&D budgets and overhead expenses. Excessive budgets and long development cycles simply cannot be supported in such economic environments. Rather, companies need to get a product to market as quickly and inexpensively as possible — and Open Innovation represents a badly needed solution. Today the term innovation tends to be overused business jargon that is meant to suggest a more effective use of business resources, but Open Innovation is actually something quite different. It’s a concept that acknowledges the reality that innovation happens everywhere — not just inside your corporate walls. Embracing Open Innovation means that you adopt the practice of acquiring innovative IP outside your company and merging it with your own IP pool. The key to Open Innovation is where to find it. Ideas can be found everywhere, but finding those ideas that relate to a customer’s pain is difficult. Simply put, you need to know what you don’t know — a vexing task at best. For example, pharmaceutical companies regularly work with universities to help harvest ideas and to commercialize them. But if you don’t have an established relationship with someone, how do you know when an opportunity even exists? While there is no short answer, the best advice I can give you is to seek out and discover customer pain. In a down economic market, customer pain will speak the loudest. If a customer is not in pain, they won’t buy the aspirin. Focusing on customer pain will illuminate a path to its most appropriate solution. To illustrate, let me provide a real-world example. One of our customers was considering a move into the Green technology space given its recent focus and customer demand. However, they soon discovered that there are many definitions for Green technology and the company needed to get to market quickly. Their conundrum: how do we meet this customer demand and fulfill their perception of the company as going Green, and still go to market without years of research delays? The solution: rely on key words in your search that relate to the attributes of the problem (e.g. anti-microbial, recyclable, hygienic, odor controlling, etc). Doing so can yield opportunities outside your industry that you might not have considered. This company did exactly that and what they discovered was startling. The results initially seemed incorrect because they were previously unaware that the IP they uncovered even existed — precisely because it was outside their industry. By asking why something showed up outside their industry within their innovation landscape, they were able to discover what they didn’t know existed. The ultimate result was that they found a medical technology comprising all the attributes of the solution they were seeking as a naturally occurring substance. Having this information in turn enabled them to get to market faster, create a new product, partner with a leading supplier and innovate without having to create it all in house — a perfect example of Open Innovation. User Insights 2008-12-18T01:37:00-06:00 http://www.innography.com/blog/post/will-a-recession-impact-the-patent-industry/ http://www.innography.com/blog/post/will-a-recession-impact-the-patent-industry/#When:20:47:00Z With the US and international markets in turmoil, everyone is focused on the economy. The Dow and the NASDAQ have experienced historic drops, and many people may be concerned about which industries will grow or contract, and what that means for their job. Given the economic conditions, what will happen to the IP and Patent industries? The short answer is that there is good and bad news. First, the good news. Historically speaking, in recessions the US patent filing and IP litigation markets have experienced significant growth. While I have not found an academic explanation for this, let me attempt to explain my personal view. When money becomes tight, companies look for alternatives to increase their cash flow and find two paths: 1) product innovation, and 2) litigation. For product innovation, this means creating indispensable products that people can’t live without, meaning you need to increase R&D and also to protect your innovations. For litigation, companies try to enforce their IP rights to protect their product revenues by asserting their patent positions.  No matter what the reason, patent activity (litigation, innovation, etc) only surges in response to a recession.  The following chart illustrates the IP and Patent Litigation over the last 40+ years in the context of 3 documented recessions. As you will see in the chart, recessions caused increased growth in the patent and IP litigation. Over the course of 3 years following a recession, there was an average 30% increase in activity across three different periods. While leading up to the recession there was only slight growth, there was never really a dip in patent litigation. To further this point, we can also look at the number of patents filed during those same periods of recession. The following chart shows similar increases in response to recession.  On average, patent filing activity increase 10-11% across the three recession periods. Now for the bad news. The flip side of this increase is that companies may be facing increasing litigation costs as they defend their products and market positions. With a statistical increase in litigation activity, there is a strong likelihood more companies will be sued over patent infringement. This may be especially difficult with the increases in patent troll activities. As I’ve mentioned in previous posts, companies are already seeing more infringement letters than ever before. So what is the outcome? What does this mean to you? First, I think companies need to look to innovation as the key to increasing margins and maintaining market presence. Without innovation, companies will have decreased sustainability and will be susceptible to competitors undercutting them on costs and beating them on functionality. As part of innovation, this also means looking for good deals in the IP world.  Tons of good patents are available for licensing and can accelerate your development if you know where to look. Second, I think companies need to be more vigilant and structured in their litigation defense and strategy activities. With increased litigation, you have to become a very unattractive target for litigation.  Being able to respond quickly and intelligently to threats/infringement will immediately dissuade would-be litigators. Furthermore, many of your competitors may try to copy or steal your products in an attempt to increase revenues.  The only way to prevent this is to constantly monitor and track your competition. You can either be the victim or the savior when IP theft strikes, so understanding the competitive landscape becomes even more important for litigation and competitive product activities. While these are difficult economic times, companies can come out ahead if they take advantage of these historical trends. One thing is certain: the patent industry will continue to be strong and grow.  The only question is whether you take advantage of that growth or not. Sources: University of Houston Patent Statistics NBER Business Cycle Expansions and Contractions USPTO Filing Stats Industry Outlooks 2008-10-09T20:47:00-06:00 http://www.innography.com/blog/post/correlating-patents-with-litigation-data-to-determine-legal-risk/ http://www.innography.com/blog/post/correlating-patents-with-litigation-data-to-determine-legal-risk/#When:18:45:00Z Rather than looking at different information sources in isolation, one of our guiding philosophies is that the answers to many business level questions are found at the intersection of different types of data. So what does this mean from the perspective of someone looking to do real-world analysis? Let’s use correlated information to examine the litigation risk involved in a certain technology landscape. Imagine we are a company that either (a) makes tooth whitening products, (b) is looking to start a new business unit in this area or (c) is considering acquiring another company in this area. One thing that we may want to consider is the risk of IP litigation – in which technology areas and from which companies. Simply searching patent data will tell us how many patents are in this area and possibly who owns them. Searching litigation cases is not much help without putting those cases in the context of which patents or technology areas are at issue. By correlating the patents to the litigation cases we can do advanced analysis around which technology are most heavily litigated, who the top plaintiffs are, who is being sued most often and which patents are at issue more than others.Using Innography we perform a simple search for ‘tooth whitening’ and return a set of results for the patents that match this query. Then we may want to know which of the technology areas are most heavily litigated; we can see that patents involving using light to cure a whitening composition – and the composition itself – are litigated more often than tooth bleaching trays. We also see that the top litigating companies are Ivoclar Vivadent, P&G and Dental Concepts, and that some patents are litigated disproportionally more than others. We can then correlate the litigation parties with financial data to discover which are the large companies and which are the small or unknown litigators. Finally, we can correlate and pivot on many different dimensions of this data to do decision tree-like analysis to determine the risk factors and how we could mitigate risk to aid in making our decisions. All of this analysis is possible only when we have patent, litigation and financial data available in a format that is able to be analyzed in context of each other rather than in isolation. Application Trends 2008-10-01T18:45:00-06:00 http://www.innography.com/blog/post/ju/ http://www.innography.com/blog/post/ju/#When:00:25:00Z I remember the first time I opened a web browser back in 1994 and thought this was going to change the way we do things. This turned out to be a understatement as search engines have now indexed billions of patents. The web has been so successful that people now have TOO much information and need to put it all together. To compensate, companies over the last 14 years have continually refined user interfaces and visualizations to make information easier to understand. There have been at least a dozen iterations on user interfaces and designs, and it is still a work in progress. I am going on record that user interface design will be a driving force for innovation in the patent intelligence/research space. Just like the internet, patent researchers face the same problem of too much information. In 2007 the US patent office alone had a backlog of over 750,000 patent applications, and in 2008 expects to have over 500,000 new patent applications filed. However, the patent industry has stopped following the path of improved user interfaces. Somewhere around 2001, the patent industry stopped trying to improve the user interface and gave up while the search industry continued to innovate. I predict that in the next few years the patent industry will catch up with the search industry and bring some revolutionary ideas to the table. The goal is to make the data work for the user to support their job, and not the other way around. Here is an example to illustrate the evolution of the user interface: Today, most systems are in IP Search 1.0, where it is just a table list that requires browsing through thousands of results. The user has to make the data work for them, but is required to modify it significantly.  Generation 1 More creative systems are leveraging navigation and visualizations to help users find information quicker and get to the answer faster. It reinforces the information they are looking for, finding hidden companies or information that is immediately relevant and useful. Generation 2 Going forward, the user interface that will drive change will reinforce what the user is trying to achieve. It will integrate with their daily research process, track information in a way that makes sense and can be used to communicate a point. The interface should be presentable to others and immediately make a point.  Generation 3 As more information becomes available, we will see more creative and integrated ways to utilize this information to reinforce people’s jobs. It is a very difficult challenge, but we at Innography are dedicated to making an impact in user interface design for patents. Please use this blog to post ideas or suggestions for UI design. Help us revolutionize Patent Intelligence! 2008-09-16T00:25:00-06:00 http://www.innography.com/blog/post/simplify-your-search/ http://www.innography.com/blog/post/simplify-your-search/#When:05:54:01Z Three Rules of Work: Out of clutter find simplicity; From discord find harmony; In the middle of difficulty lies opportunity.  --Albert Einstein One of the things I’m constantly asked about is the specifics of our search capability. I’ll often run down the list, from the common to the more obscure. Overall, the response to our breadth of options has been very positive. I’ve even gotten involved with porting some of the queries from different engines to ours. This can be a dizzying experience. The level of complexity in some of these queries is amazing. For the more involved case (and even for the simple one) it’s good to take a step back and focus on the goal of the project. Often the questions are much more mundane than the queries. What’s happened is that the user has been forced over time to modify the query to get a relevant data set. This caused a morphing of what was once probably something very simple and clear. Some users are so used to this that they can write (and even think) in this complex boolean logic. The answer is usually not in directly porting the boolean logic to our system. By understanding the goal, the options available with Innography can often rescue us from this unnecessary complexity. Being in the right vicinity is the most important part of the answer. I lightly touched on the advantages of the patent classification system in my last blog post. The classification system is one of the vicinities. By limiting your search space to relevant technologies and applications, your query can be simplified to more easily capture the relevant data. There are other vicinities. A list of competitors, a date range, or even inventors can all be vicinities. Even business information such as revenues or the amount of litigation might give you a vicinity. It all depends on the final goal. The filters available on the left side of any result set are how you can get to the right vicinity. I’ve been able to assist our users in transforming complicated, hierarchical boolean logic down to just a few plain keywords with a few filters. When that happens, even I can understand what’s being searched. The added advantage to simplified search is that our users are able to easily modify it to get immediate insights. This changes the game. It makes the search process about insights rather than data retrieval. Pushing the insights into the search process gives our users the power to make decisions during the research rather than as a result of it. It might take a little while to get used to this process, but once implemented our users find it invaluable. User Insights 2008-09-03T05:54:01-06:00 http://www.innography.com/blog/post/dumpster-diving-and-other-ip-analysis-patterns/ http://www.innography.com/blog/post/dumpster-diving-and-other-ip-analysis-patterns/#When:18:26:00Z Software design patterns are generally reusable solutions to commonly occurring problems in software development. It is usually not a direct code snippet or solution, but rather a high level description of how to solve a problem that can be applied to many different solutions. One of the nicest things about software design patterns is that each pattern is named in a way that lets software designers share ideas using a common vocabulary. Software designers and programmers can discuss their use of a ‘decorator’ pattern or an ‘adapter’ pattern without having to dig in to the code level. So what does any of this have to do with IP analytics? I have recently seen some presentations about named IP strategy patterns. At the LES spring meeting this year for instance there was a presentation on putting together an IP ‘playbook.’ They provided named ‘plays’ such as the ‘pied piper’ strategy for publishing your invention in trade journals after you file a patent application. At Innography, we have seen many reusable ‘patterns’ of slicing through data for valuable insights. For instance, here is an IP analysis pattern that we have been referring to as ‘Dumpster Diving.’ If you were looking to acquire patents on the cheap you might examine recently abandoned (expired due to failure to pay maintenance) patents. You may catch a discarded patent in a resurrection window where the owner could bring the patent back to active status and reassign it to you. Since we know that it was not valued enough by them to pay annuities on the patent, you might be able to purchase that patent for pennies on the dollar of what it would cost you to acquire it from someone with a stronger negotiating position. This is an example of a re-usable ‘pattern’ for IP analysis. As IP analysis tools become more mature and prevalent, I expect that we should be hearing more about these analysis patterns and best practices for getting useful business insight out of IP data. 2008-08-18T18:26:00-06:00 http://www.innography.com/blog/post/the-real-deal-behind-yahoo-and-microsoft-patents-as-financial-assets/ http://www.innography.com/blog/post/the-real-deal-behind-yahoo-and-microsoft-patents-as-financial-assets/#When:16:58:01Z Last week there was a rumor that Microsoft’s real intention behind acquiring Yahoo is around valuable IP. This article talked about how everyone was scrambling to find out which patent Yahoo held that was so critical to Microsoft.  This was interesting on two levels: 1) what IP asset is so valuable to warrant billions of dollars to purchase Yahoo, and 2) what would Microsoft do with that asset if they acquired it? While I admit this is the first I had heard of the rumors, I can’t say that I’m surprised.  Microsoft has been heavily attacked on multiple IP fronts with several hundred of millions to billions of dollars judgments against them.  Depending on where they are going in the future, they know the price of not innovating and what it costs to get it wrong. I think the true take away from the story is that patents are a huge financial asset and are now a large focus of acquisitions.  However, the lack of solutions to find, assess and financially analyze patents is the big pain.  All of Silicon Valley is scrambling to understand what is so valuable, but they will all fail without some synthesis of business, legal and IP/technical information.  For tax accounting, risk analysis, forecasting and financial metrics, patents have been neglected in how companies manage them like true financial assets.  As more stories like Microsoft surface, I predict the evolution of standard industry financial practices for patents.  The only way to do so will be to interconnect with financial accounting systems, ERP systems, HR systems, etc to get a completely seamless picture of patents as financial assets.  Imagine being able to attribute patents to product revenue, market growth, HR incentives, product planning, SOX compliance reports and tax returns.  All other financial assets have been incorporated into this model, and I predict this will become standard operating procedure within the next 5-10 years.  As Microsoft knows better than anyone, the value of Yahoo is not just in operations, but in future markets and protection against new threats.  I’m passionate about this future and believe we are at the Early Majority phase where patents will become the first assets to be valued for daily operations. Technology Forecasts 2008-08-09T16:58:01-06:00 http://www.innography.com/blog/post/the-prior-art-paradox/ http://www.innography.com/blog/post/the-prior-art-paradox/#When:20:08:00Z Admittedly I am not an IP attorney, or for that matter even a patent or IP expert. Having been introduced to the market only a year and half ago, a lot of the concepts and practices are new to me. I have to admit that I find it to be a very fascinating field. One of the things that has really jumped out to me while talking to our customers and prospects is the divide—make that chasm—that exists in corporate attitude and policy regarding whether to allow inventors, engineers, and researchers to view prior art around inventions and projects they are working on. This is one of those issues that it seems there is are only two colors black and white—no shades of grey. On the one hand, many companies do not want researchers to search for or view any prior art as part of their standard research process. The thinking here, driven it seems by corporate legal, is that by not allowing the inventors to search for or view related art that the company is maintaining “plausible deniability” in the event of any potential future infringement actions. And in fact, current patent legislation fully defines and supports this practice, and to a large extent encourages patent filers to perform minimal prior art searching on their own. I personally think this is one of the flaws in the current patent system and the reason that in many cases prior art is missed by examiners, and is a great argument for the currently being tested patent peer review and the move toward patent legislation reform. (NB: This is my personal opinion and does not represent the views of Innography). This approach represents the traditional view of intellectual property as a defensive only mechanism, still held by a large number of companies. On the other hand, is the approach that seems to be widely adopted by companies that are embracing innovative strategies and open innovation. Companies in this camp encourage researchers and engineers to fully understand the IP landscape. By exposing them to prior art and related IP from their field as well as other fields and industries, they are encouraging truly innovative and unique approaches to their projects. By seeing what has already been done in the area of their invention, they can invent around existing art to develop truly novel technologies. This approach often identifies opportunities for collaboration through licensing or partnering that can help these innovation-driven companies introduce new products to market faster. In these companies, an innovation approach has replaced the traditional courtroom approach and is leading to truly unique ideas being developed faster than ever before. My own observation here is that I find the dichotomy to be striking, in fact more so than in any market I’ve ever been associated with. Perhaps it is a very good indicator of a shift in market behavior and attitudes and represents a new way of thinking about intellectual property as the intangible, leveragable asset that it is. Neither approach is right or wrong, but it is definitely an issue that finds companies polarized. For our purposes as a company, it doesn’t really matter which camp our customers fall in since our product can support/accommodate either approach and we already have customers firmly entrenched in each camp. For my way of thinking the open approach makes more sense—but hey that’s just me! User Insights 2008-07-30T20:08:00-06:00 http://www.innography.com/blog/post/lsa-is-great-theory/ http://www.innography.com/blog/post/lsa-is-great-theory/#When:05:39:01Z Well, it may be all right in practice, but it will never work in theory. --Warren Buffett Since its inception in the 80s (US4839853), many search applications have trended towards LSA as a method for correlating concepts. We often find that what sounds great in theory falls short in practice. In the realm of Intellectual Property (IP), Latent Symantic Analysis (LSA) seems one of these situations. LSA can be described as a technique using statistical analysis to find associations between terms. Without getting into the mathematics, documents with similar yet uncommon terms are considered semantically close. In theory, the methodology should be excellent for classifying text without actually reading or understanding it. In fact, for general text as may exist on the internet, LSA can prove useful in finding a handful of very related results. Our task in the IP arena is quite different. The very specific terms used in these technical documents can often confuse LSA systems. But we also have a key advantage within IP—it’s been classified by an expert examiner at the patent office. That examiner knows precisely the concepts described in the invention. Many users in this community are already very familiar with the US and IPC classification systems. Each system has its pros and cons. Making both classification systems available and approachable is a basic function that every patent application should provide. In addition, being able to leverage the knowledge embedded in the classification systems is key. When a document has several classifications tagged, they must all be taken into account by the application to accurately contain the invention. Another problem with LSA is scalability. True LSA requires growing matrices that become difficult to manage and scale with large document sets. Shortcuts can be taken, but queries that are not pre-calculated can take minutes to hours to days. With today’s demand for instant information, users cannot be expected to endure such delays. Instant access to the data is a must. Finally, LSA provides little room for user control. Its algorithms are static until updated by the provider. I believe applications that learn from the user are better than ones that try to teach the user. Providing a responsive, accessible and repeatable method to teach the application keeps control in the hands of the expert—you! These are all commitments we take seriously as we strive to provide the best application possible. Application Trends 2008-07-22T05:39:01-06:00 http://www.innography.com/blog/post/passive-vs-active-what-is-really-interesting-about-patent-polls/ http://www.innography.com/blog/post/passive-vs-active-what-is-really-interesting-about-patent-polls/#When:03:46:01Z Recently we’ve seen a number of Patent Pools emerge (e.g. Alliance Security Trust Patent Pool) as a mechanism to defend against Patent Trolls.  At its core, a Patent Pool is a financial vehicle designed to allow companies to pool their money and resources for either offense or defense.  It won’t help you avoid litigation, make your quarterly numbers, or even release new products, but it does help to take away some of the fuel from patent trolls.  However, I don’t want to talk about Patent Pools in this post, but what I think highlights a much bigger trend. The interesting point is that Patent Pools highlight a fundamental shift I talked about in an earlier post… a shift from being PASSIVE to ACTIVE.  Just 10 years ago, most patents were filed solely in hopes of one day being used to defend against litigation.  Companies would sit on their patents and use the shear size of their portfolio to win battles.  However, we’ve seen this is a losing strategy (i.e. RIM vs. NTP) given the current landscape.  Instead of managing IP in isolation, there is a wealth of opportunities if you ACTIVELY manage your IP.  With the shift toward these Patent Pools, companies are finally seeing that they need to actively manage IP around them, not just what they own.  I forecast this will only increase as companies learn to take full advantage of their IP, mostly around open innovation, licensing, and partnering opportunities. Another side effect of this trend is that it really starts to reward the inventors who are the real lifeblood of the IP system.  By starting to really value patents outside the company for their impact and influence, patents are starting to truly become financial assets.  Just like any other asset, they need active valuation, active management, active trading, and active utilization.  Passive assets are not really assets at all and more of an insurance policy.  I believe companies are starting to realize this and the trend toward active management will only increase and in new, creative ways.  While Patent Pools might be a small tactic, it is just the tip of the iceberg as the mentality is shifting toward business implications. 2008-07-15T03:46:01-06:00