Using Patent Analytics to Engage Senior Management in Corporate Strategy

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Patinformatics, LLC®
Data Driven Decisions
Patent Strategy and Analytics Services
Using Patent Analytics to Engage
Senior Management in Patent
Strategy
Moving Patent Information up the
Value Chain
Anthony Trippe, Managing Director
European Patent Office Patent Information Conference
Warsaw, Poland – November 3, 2014

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Why is patent analytics critical from
a business perspective?
• Too many decisions are made without proper
intelligence or analysis
• “if all you have is a hammer, everything looks like a
nail” – Abraham Maslow, 1966
• The “old boy” network or rolodex model applies
• Too often analysis is being done by individuals who
do not understand the nuances of patent
information
• Analytics lower the risks associated with business
decisions and ensure higher returns

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Why is patent analytics important
from an R&D perspective?
• It’s a tool to assist with long term strategic
technical planning
• It involves work processes for helping technical
decision makers make smarter decisions faster
• It’s an analytical process that transforms
disaggregated technological information into
relevant strategic knowledge about your
competitor’s, or a subject’s technical position,
size of efforts, and trends

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What’s so special about patent
analytics?
• Also from 1966 -”We have the choice of using
patent statistics cautiously and learning what
we can from them, or not using them and
learning nothing about what they alone can
teach us.” – Schmookler, Innovation and
Economic Growth pg 56

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So why should organizational strategy be
influenced by patent information
• 80% of the information in patents is never published
anywhere else
• “Eighth Technology Assessment and Forecast Report” –
USPTO, 1977
• Actually, 95% of the substances from the patent
collection in CAplus did not have a corresponding non-patent
literature reference associated with them
• “Over the next few years, we will either see the emergence
of rational markets for patent trading, which have the
potential to deliver trillions of dollars in value, or an
opportunity lost as markets fail to engage effectively.” –
AISTEMOS CEO Nigel Swycher

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The world’s patent offices are on board
• The rise of the Chief Economist
• WIPO and the UK Patent Office have devoted significant
resources to the development of patent landscape reports,
infographics and patent analysis workshops
• IP ValueLab will promote and develop IP management and
strategy, IP commercialization and monetization, and IP
valuation in Singapore
• European Patent Office efforts
• EPO & USPTO collaborate for Patent Statistics for Decision
Makers
• Releases PATSTAT
• "Patent information is a top priority for the EPO” – EPO
President, Benoît Battistelli – 2013 EPO Patent
Information Conference

A practical example of putting these
ideas into practice
AN ANALYSIS OF THE PATENT
POSITION AROUND PERSONAL
FITNESS MONITORS
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Patent information is required to make informed
decisions about your company’s IP strategy
• IP strategy has to play a role in overall business strategy
• The two have to be considered simultaneously
• Patent information can provide input to establish
business direction
• Who has Company Z assigned patents to without a
press release or financial disclosure?
• Who are the major technology stakeholders in a
given industry or within an industry vertical or
segment? Are these the people I should partner
with as I move into a new market?
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Law of Linear Patent Analysis
• Develop a Collection of Analysis Tools
• Understand the Need Behind the Need
• The Need Drives the Question
• The Question Drives the Data
• The Data Drives the Tool
Why is this important?
“if all you have is a hammer, everything
looks like a nail” - avoid this at all costs
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A holistic view of patents, as they pertain to
corporate strategy requires an integrated
approach
• Like a three-legged stool
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there are different
elements to an
integrated strategy
• Business goals
• Financial analysis
• Patent considerations
• All three elements have
to be considered or the
item won’t stand

What is a personal fitness monitor?
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Using patent analysis to drive
corporate strategy
• Project objectives
• Complete a high-level competitive analysis of
the fitness monitor IP landscape
• Look at components and techniques
• Assess company’s specific position in fitness
monitors
• Especially compared to competitors
• Identify the main IP strategy opportunities,
and threats to company’s business
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Components associated with fitness
monitors
• Battery
• Connector / Communications
• Casing
• Accelerometer
• Memory
• Processor
• Charger
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Techniques associated with fitness monitors
• Flex membranes
• Testing/Programing
• Rigid Flex Boards
• Waterproofing
• Power management
• Activity algorithms
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We find the following in some of the
Jawbone (Aliphcom) patents
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COMPANY IP ASSESSMENTS – FITBIT &
JAWBONE (ALIPHCOM)
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Breakdown of FitBit portfolio by Technology Category
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8"
7"
6"
5"
4"
3"
2"
1"
0"
Monitoring"System" Monitoring"System"with"
Display"
Ac?vity"Algorithm"
Pending"
Allowance"
Granted"

Observations on FitBit portfolio
• Very narrowly focused on activity monitoring device
primarily for counting the number of stairs that a user
climbs
• US only
• Reasonable number of granted patents but no depth
• Nothing on established chokepoints or components of the
device
• Calorie burning calculations were still pending
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Observations on FitBit portfolio
• No forward citations
• Fair number of independent claims but several
steps and all on small variations on same theme
• Should consider an IP buying program to protect
themselves as market and share increase
• Already been sued by SportBrain – dismissed and
hopefully the corresponding patent was licensed
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Breakdown of Aliphcom portfolio by
Technology Category
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6"
5"
4"
3"
2"
1"
0"
Device"Control"
Ac+vity"Algorithm"
Health"System"
Power"Management"
Data"Security"
Health"Algorithm"
Protec+ve"Overmolding"
Coa+ng"
Communica+ons"
Medical"Diagnosis"
Nutri+on"Algorithm"
Sleep"Algorithm"
2012"
2011"

Observations on Aliphcom portfolio
• Most applications have not granted yet!
• Potential for foreign coverage
• Coverage on power management
• Coverage on manufacturing
• Coverage on variety of activities, wellness and
sleep
• Device control could be very interesting
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Observations on Aliphcom portfolio
• Have Bluetooth elements in other products but
don’t use it in Up product, why?
• Few forward citations
• Should consider an IP buying program to protect
themselves as market and share increase
• Have already had to recall first generation and re-issue
product due to issues with waterproofing
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THE BROADER IP LANDSCAPE
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IP Landscape – Documents by Organization,
Kind and Application Year
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
1
4
2
9
2
3
2
1
12
16
1
2
1
5
1
4
4
3
2
2
1
3
2
3
2
2
2
1
1
2
1
2
1
1
1
1
1
1
2
1
1
1
1
1
5
5
2
1
3
1
1
3
4
1
1
3
4
1
2
1
5
5
4
3
2
2
1
2
1
4
1
1
1
1
3
1
1
2
1
1
1
1
1
1
2
1
1
1
1
2
1
2
1
1
2
1
1
2
1
1
3
1
1
3
3
1
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0
10
20
30
40
Philips
Aliphcom
Theranos
Seiko
Epson
BodyMedia
Nike
Adidas
Polar
Electro
Fitbit
Inc.
Georgia
Tech
P&G
Ya
Man
Ci5zen
Holdings
Tensys
Medical
Valencell
Omron
Univ
of
Wollongong
Apple
Healthtech
Suunto
Univ
Hong
Kong
Polytech
Xybernaut

A word about applications vs. grants
• Some people suggest that applications should not
be included since they are an unknown quantity
• I believe they should be included since they
demonstrate intent and investment but they
should be segregated from the grants
• Applications are an option play since you don’t
know what they are going to look like after
prosecution
• Check the file wrapper and whether abandoned
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Which companies have the most forward
citations?
Omron"
Univ"of"Wollongong"
Univ"Hong"Kong"Polytechnic"
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800"
700"
600"
500"
400"
300"
200"
100"
0"
Theranos"
Seiko"Epson"
Philips"
Aliphcom"
Nike"
Adidas"
Polar"Electro"
BodyMedia"
Georgia"Tech"
Tensys"Medical"
P&G"
Ya"Man"
CiHzen"Holdings"
Valencell"
Apple"
Fitbit"Inc."
Healthtech"
Suunto"
Xybernaut"
Sum$of$Count$of$Ci+ng$Patents$by$Company$

Thematic mapping of the domain can also
highlight areas of focus
Red – Aliphcom
Green – FitBit
Yellow – Nike
Light Blue – Philips
Dark Blue – Polar Electro
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Can we begin to draw some
conclusions on the industry?
• Nike – They have partnered with Apple and were
willing to acquire IP from Phatrat – good
portfolio for wristband
• Adidas – Partnership with Polar and acquired
Vivometrics – also have a strong portfolio but
more involved with clothing than wristband
• BodyMedia – Probably the best portfolio with
regards to maturity, breadth and depth
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Additional analysis areas to consider
• Should also run searches and perform similar
analysis for chokepoint area – power
consumption & Bluetooth connectivity for
instance
• Early priorities for low power consumption and
low power Bluetooth or alternative short
distance communication standards will be very
important in this area
• Buying programs should focus on this
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A few weeks after this case study was originally
developed Aliphcom bought BodyMedia
• Case study completed on April 17th 2013
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and presented during a workshop at the
2013 PIUG Annual Conference on April
27th 2013
• On April 30th 2013 Aliphcom d.b.a.
Jawbone acquired BodyMedia for $110
million dollars
• BodyMedia was suggested in this study as
having one of the best portfolios in this
area and that Aliphcom was exposed
• It is widely reported that the acquisition is
primarily driven by Aliphcom’s desire to
own the BodyMedia patent portfolio

Patents are an investment - literally
• One way of viewing innovation strategy at
a corporate level is by framing the
discussion in terms of portfolio risk and
diversification
• Executive staff and Board Members
traditionally have a finance background
and will immediately recognize the
concepts of risk and diversification and
how they apply to investment strategy
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Growth potential and risk tolerance
are corporate issues
• A key attribute to identifying corporate goals and
defining a strategy for leveraging patents within a
company is deciding on the performance expectations
associated with those assets
• Traditionally, in order to increase the amount of return
or profit from an investment, a higher level of risk
must be assumed by the organization
• The decision on how much risk is acceptable, weighed
against the potential for gain from patent assets,
should be made at the highest levels of a company
• In the best case this is done with understanding and
approval from the executive staff and board
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Patent strategy based on investment
principles
• When patents are treated as investment
vehicles
• They can be managed using techniques
that Boards and Executives are familiar
with, and can relate to
• Executive management can be engaged
to play a meaningful role in patent
strategy development
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Technology Investments: Portfolio
Risk and Diversification
Technology Categorization Financial Investment Compariable
Sustaining Technology
Bond: low risk/return
(improvement to Existing
Market)
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Sustaining Technology
(applied to New Market)
Stock: moderate risk/return
(diversifying industries can lower
correlation)
Disruptive Technology Early Stage Venture Investment:
high risk/return

Technology investments categorized
by inherent risk and unfamiliarity
• Sustaining Technologies (Applied to Existing Markets) - Making
incremental improvements to existing technologies
• Can be thought of like a bond, low risk and familiar
• Does not normally provide large returns.
• Sustaining Technologies (Applied to New Markets) - Using existing
technology in new markets
• Similar to a stock investment in a correlated industry, some risk involved
• Growth comes from making investments in alternative industries that
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offers low correlations
• Disruptive Technologies - New technologies for existing industries, or for
likely high-value markets for the future
• High risks associated with early-stage investments
• Similar to a venture fund or angel investment where the earlier the
investment is made, the larger the opportunity for explosive growth

Diversification as a framework for
patent strategy
• In the financial world, investors seeking steady, long-term
growth use diversification strategies to buffer themselves
• They will select diversified asset classes, such as stocks
versus bonds
• For example, traditionally, when one of the classes begins
to decline, the portfolio is compensated for with an
increase in the other
• Diversified financial portfolios also contain a mixture of
investments where there is no correlation between the
businesses associated with each
• Depending on how risk averse an organization may be, it will
choose its financial portfolio to deliver an expected return
with the least amount of risk
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Technology Investments: Portfolio
Risk and Diversification
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Technology
Categorization
Startup New Entrant
(moderate size)
Leading Co.
(high mktshare)
Sustaining
Technology
(improvement to
Existing Market)
10% 20% 50%
Sustaining
Technology
(applied to New
Market)
20% 50% 35%
Disruptive
Technology
70% 30% 15%

Risk tolerance should be influenced by
the competitive environment
• When examining a competitors portfolio look
specifically at how much investment a
competitor makes in each category
• Studying the mix of technologies pursued by
a competitor can provide key insight into the
level of risk they are willing to maintain while
still concentrating on their core businesses
• Companies that have employed a long-term
growth strategy with their patent portfolios
can be identified by the level of
diversification they pursue
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Aligning the organization around a
patent strategy
• Companies can meet corporate expectations
for returns on intellectual property and
determine the right mixture of technology
investments if they consider which
combination of these categories they will try
to achieve with their research initiatives
• Once the strategy is developed, it can be
employed by both research managers and
participants within the organizations patent
committee to ensure that the resulting
patent portfolios are maximized to achieve
their stated objectives
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For More Information
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Have a look at:
http://www.patinformatics.com
• Deals with patent analysis issues at all
different levels and utilizing all of the different
techniques

Using Patent Analytics to Engage Senior Management in Corporate Strategy

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