PATENTS IN TECHNOLOGY ACQUISITION - DO WE KNOW WHAT WE ARE SAYING?
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PATENTS IN TECHNOLOGY ACQUISITION - DO WE KNOW WHAT WE ARE SAYING?

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Technology Acquisition is interlinked strongly with patents. India and specifically Indian SMEs are facing patent threats. It is not Technology Acquisition but technology enforcement that is becoming ...

Technology Acquisition is interlinked strongly with patents. India and specifically Indian SMEs are facing patent threats. It is not Technology Acquisition but technology enforcement that is becoming the norm. The Achilles heel of technology business continues to be Patent Valuation. Crafitti's MDMP patent valuation is a must explore methodology.

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PATENTS IN TECHNOLOGY ACQUISITION - DO WE KNOW WHAT WE ARE SAYING? PATENTS IN TECHNOLOGY ACQUISITION - DO WE KNOW WHAT WE ARE SAYING? Presentation Transcript

  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r March 23, 2014 1© Crafitti Consulting Private Ltd. Patents in Technology Acquisition – Do we understand, what we are saying?Navneet Bhushan navneet.bhushan@crafitti.com Phone: +91 9902766961
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r March 23, 2014 2© Crafitti Consulting Private Ltd. KEY POINTS – We need to Innovate!
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r IP Imperialism: Indians even in India are not filing patent applications March 23, 2014 3© Crafitti Consulting Private Ltd. IP Imperialism
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r The English word ‘patent’ is derived from the Latin word ‘patere’ meaning ,- to be open. • A Legal grant by a Government • Terms of grant – In return for disclosing an invention publicly so that others can learn from it, and paying the processing fees, the Govt. of the country will grant the inventor of the invention the rights to exclude others from making, using, or selling the invention for a limited period of time What is a Patent? When you patent your invention - you disclose your invention or "technical solution to a problem". If that Patent application - your disclosure is Novel, Inventive and have industrial application and is "sufficiently" disclosed you may get a right by the government of the land/country to exclude others from exercising that "invention" for a limited time period - currently 20 years from the date of filing. That right is called the "patent right"!
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Case Study 1 (Engineering) – (1) Scenario • An MNC had an invention that was patented and that expired in 2010 in multiple countries but it was not filed in India. • In 1996, the MNC filed another patent which was a slight extension of the base patent - but this time through PCT route they filed in India as well. In India the application was published in 2004. • The new patent was granted - they cited the base patent as prior art and created some mumbo-jumbo the way people who draft these applications know so that the new application was considered an invention over prior art. March 23, 2014 5© Crafitti Consulting Private Ltd. The MNC sent a letter to one of the big SME's in India, saying their product infringes the patent - hence they should stop production and sales. The Indian company really was not aware of the patent and what actions to take.
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Case Study 1 (Engineering) – (2) Solution • After months of struggle, they found us. We suggested that (a) Let us look at the extent of infringement (b) let us look at the validity of the patent In a week of study, we were able to prove that on technical grounds Patent is not valid (purely on Technical grounds) (a) Insufficient disclosure of how to exercise the invention (b) Prior art - the old expired patent was the main patent - and the extension was sort of small extension (c) Prior use - there was a product existing in the market since 1980s which clearly shows that invention described in the patent is not Novel. March 23, 2014 6© Crafitti Consulting Private Ltd.
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r • Prior art - the old expired patent was the main patent - and the extension was sort of small extension • Questionable Novelty!! March 23, 2014 7© Crafitti Consulting Private Ltd.
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Case Study 1 (Engineering) – (3) Key lessons and steps (a) Maintain a continuous patent watch in your industry (b) As you see a patent for which you have a prior art or prior use - immediately raise a pre-grant opposition in Indian Patent office (this is much less costly) (c) If someone threatens with a patent - please do the following i. verify the extent of infringement - many times infringement may be very small or negligible ii. Check the validity of patent - given the pace of patent apps and lack of sufficient availability of manpower in patent offices - many patents are granted with very low level of assessment - 50% of patents will be invalid on various grounds ( March 23, 2014 8© Crafitti Consulting Private Ltd.
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Case Study 1 (Engineering) – (4) Key lessons and steps (d) If there is an infringement and patent is valid 1. Get into carrying out a Technology Alternative Studies (TAS) on the patent. 2. Carry out a patent valuation study 3. Get into a discussion/negotiation with the Patent holder to acquire the technology or pay a royalty Please understand the extent of threat that your field is facing due to patent system becoming more pronounced and India becoming a Big Globally lucrative market. Our defence is in our hands.. March 23, 2014 9© Crafitti Consulting Private Ltd.
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Intel’s Ex-CEO March 23, 2014 10© Crafitti Consulting Private Ltd. PARANOID!
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r TRIZ – Inventive-Problem Solving by Altshuller Teoriya Resheniya Izobreatatelskikh Zadatch • 1946 Patent Officer in Russian Navy • Discovered patterns in patents, published paper. Sent to Gulag • 1954 released, analysed 2,500,000 patents • Identified what makes a successful patent • 1956-1985 TRIZ formulated • Same Problems and Solutions appear repeatedly in different industries (Myth: My field is Unique ) • There are a series of recognizable evolution paths for all technical systems (Myth: Evolution is Completely Random) • Innovative solutions used theories outside their own area/industry (Myth: Innovation happens through Deeper Knowledge) • The most powerful solutions uncover and eliminate contradictions (Myth: Optimization is the Focus) TRIZ itself does not solve problems. Problems are solved by people. TRIZ teaches how to solve problems.
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r 5 Levels of Inventions March 23, 2014 ©12 • Pioneering Invention – based on newly discovered phenomenon • Pushing existing technology to a higher level • Revolutionary Level 5 (<0.3%) • New System Developed • Interdisciplinary solutions • Replacing old technology with New Level 4 (< 4%) • Radical change or elimination of one principal system component • One Engineering Discipline • Resolution of a physical contradiction Level 3 (19%) • Slight Modification of the system • Knowledge from different areas within the industry • Resolution of a technical contradiction Level 2 (45%) • A simple improvement • Knowledge within the trade • No system conflicts are resolved Level 1 (32%)
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r WHAT IS THE LEVEL OF YOUR INVENTION? QUANTIFYING THE LEVELS OF INVENTION March 23, 2014 13© Crafitti Consulting Private Ltd. APPLE Filed this patent in 2005
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Crafitti’s Level of Invention Tool Key Changes described in this patent compared to prior art March 23, 2014 14© Crafitti Consulting Private Ltd.
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r March 23, 2014 15© Crafitti Consulting Private Ltd. Crafitti’s Level of Invention Tool How long will it survive?
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Quantifying the Height of Inventive Step – Using Lines of System Evolution March 23, 2014 16© Crafitti Consulting Private Ltd.
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r March 23, 2014 17© Crafitti Consulting Private Ltd.
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r March 23, 2014 18© Crafitti Consulting Private Ltd.
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r March 23, 2014 19© Crafitti Consulting Private Ltd.
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Claims March 23, 2014 20© Crafitti Consulting Private Ltd.
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Identify System Hierarchy March 23, 2014 21© Crafitti Consulting Private Ltd. Cattle/Cows, Feed, Drinking, People to feed the cows, Owner/Manager, Type of feed, Preparation of the Feed, Delivery/Management of the Feeding process, Other cows in the dairy Constituents of the feed, amount of food, amount of water
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Identify Problem in the existing system March 23, 2014 22© Crafitti Consulting Private Ltd. • Inefficient Daily distribution of food ingestion by animals, • Low Amount of water drunk by animals • Digestive disorders such as acidosis or bloating Food for the cattle is given one time of the day and there is no control on how much each cattle eat during the day Feed is more than the capacity of eating/digesting, There is no time for the cattle to drink water as it keeps on eating
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Key Changes proposed in the Patent March 23, 2014 23© Crafitti Consulting Private Ltd. Feed-Additive capsicum oleorasin added to the feed Produces irritation and heat sensation in the stomach hence leads to less food intake and a second peak of more food intake Leads to more drinking of water No need to manage the distribution of food intake throughout the day Healthy animals Process of MicroEncapsulation of the new addititive Flexibility to release the chemical (capsicum oleorasin) to specific part of the digestive track of the animal
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Quantify the Level of Invention March 23, 2014 24© Crafitti Consulting Private Ltd.
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r “Life” of Invention for various inventiveness levels March 23, 2014 25© Crafitti Consulting Private Ltd.
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Life of Invention Curves March 23, 2014 26© Crafitti Consulting Private Ltd.
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Traditional methodologies to value patent • Cost based approach • Market based approach • Income approach • Black scholes model • Relief from royalty method • Competetive advantage method • Fair market value • Valuation using multiples
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Patent Valuation Using Crafitti’s Multi- Dimensional Multi-Perspective (MDMP) Valuation Methodology • 4 Key Pillars of Our Holistic Approach – TRIZ – Social Network Analysis – Scenario Planning – Analytic Hierarchy Process (AHP) • Multi-Dimensional Multi-Perspective Methodology March 23, 2014 ©28
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Crafitti Multi-Dimensional Multi-Perspective (MDMP) Valuation Methodology for a Patent March 23, 2014 ©29 Current State of the Patent/ Patent Value Indicators Citations backward/ forward Maintenance levels/ Legal Status Technical Description Family Size Claims Length/Breadth Remaining Life Assessing the Patent Using Theory of Inventive Problem Solving (TRIZ) – A Unique Proposition TRIZ Level of Invention 77% of inventions are at Level 1 or 2, 19% at Level 3, 4% at Level 4 less than < 0.3% at Level 5, Higher Level means higher Valuation TRIZ Laws of Evolution 9 Laws have been identified. Based on the position of patent on each of these laws it is possible to ascertain the strength of the patent TRIZ Function and Resources Analysis How does various parts of the invention combine to perform the function and how much resources have been utilized help in understanding the strength of Invention
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r COMPARING APPLES WITH ORANGES – AN EXPOSITION OF AHP  Similar to Decision Matrix approach but allows a wider range of values in comparison of alternatives  Developed by T.L. Saaty (1980)  AHP invites pair-wise qualitative comparisons  The problem is organized as a hierarchy
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r March 23, 2014 31© Crafitti Consulting Private Ltd. STRENGTH OF NEW CONCEPTS NOVELTY BUSINESS VALUE FEASIBILITY C1 C2 C4…..
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Crafitti Multi-Dimensional Multi-Perspective (MDMP) Valuation Methodology for a Patent March 23, 2014 ©32 Current State of the Patent Future State of the Patent Historical Factors related to the invention/Patent Current State of sub-systems, components and parts that make-up the patent Future State of sub- systems, components and parts that make-up the patent Historical Factors related to components and sub-systems PAST PRESENT FUTURE Current State of Technology, Market and Competition Future Scenarios in Technology, Market and Competition History of Technology, Market and Competition SubSystemSystemSuperSystem
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Scenario Writing and Thought Experiments (understanding something about something in future) 33 © Scenario Writing: Description of sequences of events for thought stimulation on potential crisis and to anticipate future. Usually include plausible, but unexpectedly important situations and problems that exist in some small form in the present day. Thought Experiments: the process of employing imaginary situations to help us understand the way things really are. The understanding comes through reflection upon this imaginary situation. Crafitti Approach Combines Scenario Writing with Thought Experiments During the Idea Crafting Engagement for one of the world’s top three financial data provider, four global scenarios were written and future initiatives played out in each of Global scenarios as thought experiments to rank order the initiatives
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r An Integrated Approach – ALVIS THINKING ALVIS Value Thinking (Minimize Waste – Maximize Value) Inventive Thinking (Ideality – Functions – Resources) Systems Thinking (Holistic Approach – Exploring Complexity) March 23, 2014 34 Analytical Thinking (Divide complexity into multiple solvable problems ) Logical Thinking (Informal and Formal Reasoning)
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r TECHNOLOGY ACQUISITION • CLOSELY LINKED TO PATENTS • BE AWARE OF PATENTS IN YOUR FIELD • SYSTEMATIC PATENT WATCH • PATENT VALUATION IS VERY DIFFERENT FROM A COMPANY VALUATION • SCOUT SELECT SYNERGIZE THE TECHNOLOGY THAT YOU NEED
  • Confidential craftinginnovationtogether c r a f t i n g i n n o v a t i o n t o g e t h e r Thank You Crafitti Consulting Pvt Ltd |www.crafitti.com (navneet.bhushan@crafitti.com Innovationcrafting.blogspot.com) +91 9902766961 © Navneet Bhushan navneet.bhushan@crafitti.com