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Patent intelligence – legal, commercial ‘espionage’
Chris Baxter
Chris Baxter

Innovating is performed with a purpose of advancing the state of the art. So then, how does a business know in which direction to innovate to advance the state of the art? Oftentimes, experts are aware of the state of their art through communication media and conferences. However, in business there is competition and competitors do not often share their advancements until they bring them to market. So it is not always apparent what competitors are doing and therefore it can be difficult to determine the state of the art.

Because there is a requirement that a patent applicant file their patent application before they make any public disclosure of their innovation, those in competing businesses which are advancing the state of the art may in fact make the required detailed disclosures of their innovations in patent applications. Oftentimes, if an advancement is ground breaking, an innovator will file a suite of patent applications to cover many aspects of the innovation. This is a sign of substantial innovation. Therefore, while those in business keep their innovations secret until their products are on the market, if they have patent filing strategies, their patent applications, once published 18 months after filing, may shed considerable light on a company’s innovation direction and business plans. That is, a business can request their patent attorneys conduct patent intelligence as a form of legal, commercial ‘espionage’, by analysing their competitors’ published patent applications.

If a type of technology is red hot, there will be many parties and their patent attorneys filing patent applications in that technology sector. For example, artificial intelligence (AI), blockchain and the Internet of Things (IoT) are red hot. Any patent search in these technologies will generate tens of thousands of hits. This way an interested party can see who is in the business of those technologies. One can also search according to the owner (assignee) of a patent application to narrow the search and see how those companies are focusing their innovation efforts. The outcome of doing these patent searches, that is, using patent intelligence, is that a business can determine the state of the art in a particular technology.

Determining the state of the art before or while innovating, that is, at least in part using patent intelligence, can help focus innovation efforts. Innovation without using patent intelligence is innovating in a vacuum and in the worst case, can result in reinventing the wheel.

The biggest and best technology companies patent a lot. For example, in 2016, IBM received 8,088 US patents, 2,700 of which were for cognitive inventions. Four of the five top technology companies in terms of market cap are in the 2016 top twenty US patent grantees – Amazon, Google, Apple and Microsoft. Facebook and Google buys scores of patents. Patents and other intangibles make up 80% of the S&P 500 companies’ book value. Most top tier technology companies request their patent attorneys to conduct patent intelligence in several ways. They use patent intelligence to determine in which direction to take their innovations, to consider which of their innovations to capture as intellectual property (file patent applications), as well as a form of legal, commercial ‘espionage’ to gain valuable insight into their competitors’ business activities.

Several other beneficial outcomes can result from keeping a close watch of your competitors’ published patent applications. One example is that part of driving your innovation processes can include designing around a competitors’ patented products. In this way, a company can mitigate against the risk of infringing a patent if an application receives a grant. One strategy is to patent these design-arounds to keep competitors from being able to make those improvements to their products.

In general, it is recommended to perform a search before drafting a patent application. If a company has ongoing surveillance of its competitors’ published patent applications and granted patents, a patent application drafted on that company’s innovations will be of much higher quality than if it were drafted without a prior art search. There is no guarantee that an examiner at the patent office will not find different and relevant prior art, but performing a comprehensive search prior to drafting, whilst carrying some expense, at least mitigates that risk.

An alternative, which our patent attorneys often recommend to clients is having IP Australia conduct an International-Type Search immediately post the filing of a provisional patent application. This is a very cost-effective search and thorough, more often than not.

If you would like to get in touch with one of our patent attorneys to find out more about what we can offer you in terms of patent intelligence across your competitors, please do give us a call on (02) 9264 6716.

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About the author
Chris Baxter
Managing Director, Patent & Trade Mark Attorney
Chris Baxter is a Sydney patent and trade mark attorney specialising in software patents, computer patents, medical device patents and engineering patents.

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