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Patents and Your Competitive Advantage

Is innovation and technology your responsibility in your company? Do you develop new products and do you invest in new markets? If you spend your time in development, then you would most likely spend a lot of time trying to keep “up to date”. But many developments that could be of interest to you may occur outside your information network. In the worst instances that could mean you might hear about them too late. This can lead to double innovation, possibly to litigation or even strains on your time and budget. How can you prevent these scenarios? How do you receive reliable information about your competition’s innovations, new technology, products or markets? And what do patents have to do with all of this?

Gaining a Competitive Advantage by Monitoring Patents

Companies are continually trying to improve their competitiveness. By monitoring patents you can get strategic and operative information early on so that you can turn it into a competitive advantage. Monitoring patents involves evaluating the patent documentation as well as their legal status.

Patent documentation contains information about developments as well as an invention’s technical context. It describes technical problems and their corresponding solutions. As such it is a great source of information, if you are the one responsible for innovation in your organization. If you haven’t started already, how about taking a peek into the ever growing pile of patents? Perhaps one of your 7 billion fellow human beings is as clever as you assume you are. With over 274,000 patent notifications at the European patent office in 2014 alone, that is at least conceivable, right?

But how do you possibly work through around 105 million patent applications? Which strategies lead to desirable outcomes as you monitor patents and what can you expect as you read the applications?

Patents and Your Competitive Advantage

Patents and Your Competitive Advantage

1. Technology

You probably are proud of the technology and products that have come out of your organization. When ideas become products, when you draft something new or work on something with colleagues, innovations can be the cause of great joy. Have you ever looked through Google Patents1, The Lens2 or Espacenet Patent Search3 for patents related to your product? Have you ever looked for keywords, jargon, synonyms, abbreviations or alternative terms? There might be numerous patent hits associated with your undertaking. You may find more hits if you add non-important language to it or if you use additional tools alongside your semantics search4. No matter how you go about your patent search you will end up with a handful of patent applications that you now “simply” need to understand.

Patent documentation contains technical information, though it is expressed in a form that is uncommon among engineers. Patents are not a research report, they are not an advertisement and they are certainly not a blueprint. They articulate legal rights associated with a particular invention that the patent owner applies for at a fee, according to patent laws. Because they are attempting to be legally comprehensive the language in these documents can appear boring and foreign to engineers.

What should you read first?

1.1. Innovative tasks

There are various duties at different points in the patent application process. But there is a significant difference to the thinking and approach that an engineer might take.

An engineer would perceive a problem as a concrete task in the beginning. If all goes well this will result in a concrete solution.
The patent lawyer then has a different task later. He needs to investigate the current status of the technology and work back towards a concrete solution. The developments should cover lots of technically, innovatively, and commercially useful information. The solution can be generalized in such a way that various uses and are inscribed within the patent. All of them are part of the invention. This means that others are in greater danger of violating the patent which means that some of the brightest developers could be committing crimes.

As a result, patent lawyers routinely puff up the value of particular inventions. This increases the protective covering of the patent which consists in having the patent stipulations confirmed, identifying possible violations thereof and taking legal action against offenders.
Understanding the innovative duty sets the stage for the most important part of a patent.

1.2 The innovative solution

The innovative solution is the salt in the text. Images, text, forms of execution are meant to aid in understanding. The legal stipulations are binding.
A patent application starts out vague. The lawyer can focus it before publishing, but cannot expand it. That often leads to legal formulations rarely seen elsewhere in language. But they are following very accurate logic. As a result, an untrained reader might be left with only a vague idea of what is being said after numerous readings.

Patents inform us about technology, products or procedures. But is that all, what about the subtler elements?

2. Surprise Competitors

You know your past and present competitors in your field. There are very few surprises. We’ve all experienced it though: sometimes a new competitor manages to slip through the cracks. Suddenly she is there. She pops up from an unexpected country, perhaps from a university, and you are confronted with a new reality. She reduces your market share, offers your customers better features, trumps your patent notification and is unstoppable.
How can the public patent statuses help you to identify these competitors early? How will monitoring patents help you to notice them early on?

2.1 Competitors’ Names

Competitors’ names can be seen in your search results and on the first page of the patent documentation. Right now China is shaking things up. A few years ago many notifications contained mechanical inventions. Recently more and more sophisticated notifications are popping up. It makes sense to keep an eye on China and other countries too. The question is: are these countries just hard-working? Or do the innovators there see more in patents?

2.2 Competitor-values

What do your competitors consider to be valuable? Besides all the technical advantages in the content, observing patents also gives you other benefits. Patent applications are evaluated very rigorously and then either granted or rejected. This is much more expensive than how things are done in other countries where utility designs are granted without much investigation. How much effort does your competitor invest in the endeavor? What is he shrugging off on you, assuming that you will have to take opposing legal action?

A vague patent that offers little protection and that stretches across many countries should set alarm bells off with you. What is behind this patent? Is it a stepping stone to something bigger?

2.3 Competitor expansion

What if a patent is only registered in one country? Well, then it only applies there. But has it been expanded to other countries yet and does the owner still have this option? Expansion can be expensive for the person registering the patent. It can give you an indication the regions in which your competitor plans to issue a patent. The way the expansion is set to take place could have tactical, strategic or market related reasons.

Often inventors from China register applications that have not been investigated yet. In the worst cases they are simply assumptions. They could achieve their goal of attracting expensive law suits with indeterminate outcomes. How would the chess player in you respond?

3. Your rights

No patent lasts forever. Patents that have been issued can be nullified for a number of reasons, the most important of which being: objections have been raised (particularly when a patent already exists5), they have expired, or the inventor has allowed them to perish.

That makes your rights hard to determine, and the entire situation riskier. In this kind situation you should take advantage of FTO (Freedom to Operate)6 analyses. Only then will you be able to know if you are permitted to use a patent, whether you should negotiate a license with the owner or whether you should try to side-step the patent.

In my opinion every technically oriented company should keep a watchful eye on third party patents, especially if you have not registered any patents yourself yet.

The Future

Monitoring patents can give you a strategic advantage. Whether you choose to monitor them or not, third party patents can contain risks or opportunities. On one end of the scale you are faced with possible wasted time because you have spent laborious hours inventing something that already exists. On the same end there may be knowing or unknowing infringements on the patents. If you’re lucky you could be issued a ban, and in the worst cases a fine or other legal penalties could result. On the other end of the spectrum there are opportunities. What if you could use published knowledge? Either with the necessary license or freely – without restriction. What could you possibly achieve for your products if you climb on the shoulders of inventors?

What else could happen as soon as you actively begin to use patent information? If you discover a foreign patent whose content you understand and the legal issues have been taken care of? Then you have a range of new opportunities, like:

  • Creating one-of-a-kind products
  • Preventing potential hazardous risks from ever becoming a reality
  • Recognizing and taking advantage of weak points in patents
  • Continuing patent innovation
  • Creating and developing competitive advantages

 

 

Notes:

[1] Google Patents [Internet]. Google Patents. 2016. https://patents.google.com/

[2] Lens [Internet]. The Lens. 2016. https://www.lens.org/lens/

[3] Espacenet Patent Search [Internet]. http://worldwide.espacenet.com/advancedSearch

[4] LexisNexis® Semantic Search for Intellectual – Semantic Search for Intellectual Property Solutions [Internet]. LexisNexis® Semantic Search for Intellectual Property | intelligent patent research | LexisNexis®. 2016. http://www.lexisnexis.com/en-us/products/semantic-search.page

[5] Engelfriet A. The »Donald Duck as prior art« case [Internet]. 2006. http://www.iusmentis.com/patents/priorart/donaldduck/

[6] Freedom to Operate [Internet]. Freedom to Operate | Blue Patent. 2016. http://www.bluepatent.com/de/freedom-operate

Michael Schlüter is a graduate engineer and patent engineer. He currently works as a consultant at his own company, “Michael Schlüter System- und Produktoptimierung” (MS-SPO).

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