Intellectual Property For Innovator

crafting innovation together

IP Regime for Designer/Innovator in
Knowledge Economy

Navneet Bhushan
(navneet.bhushan@crafitti.com)
Crafitti Consulting (www.crafitti.com)

New Delhi, March 13, 2010

Confidential


Confidential © Crafitti Consulting Private Ltd. March 21, 2010 2

The Other Side - Non-Sensible

There are Many Patents Granted by Patent Offices that
can only be called absurd

Confidential 4 March 21, 2010 © Crafitti Consulting Private

Topics in the Theory of Design


Black Swan – The impact of
the highly improbable

• “I cannot accept a pretense of
science. I much prefer a
sophisticated craft, focused on
tricks, to a failed science looking
for certainties” Nassim Nicholas
Taleb

Confidential

Competitive Advantage- Over Ages

How Fast
Co-Create
Extent of Connectedness

How Fast
Innovate
How much
Actionable
How much Knowledge

and Quickly
can be
How much Informed
How much of
Agricultural
can be In the Connected Age –
produced
land and Co-Creators will thrive
Natural
Resources

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Time

IDEAS…. The new world of
Ideas

Confidential

Connect and Develop


Practice of Open Innovation
(The P&G Case)

Source: Larry Huston & Nabil Sakkab, Connect And Develop – Inside Procter & Gamble’s New Model for Innovation,
Harvard Business Review, March 2006

Confidential

P&G Connect and Develop
The Complete Picture
Source: Larry Huston & Nabil Sakkab, Connect And Develop –
Inside Procterg&iGamble’s t i o n t o gfortInnovation, Harvard
craftin n n o v a New Model e h e r
Business Review, March 2006

$$
What to Search
Go To Market

How & Where to Search

Confidential Evaluate Ideas

Open Innovation Processes Six
TRIZ Thinking
• Uncertain
AHPr Hats
crafting innovation togethe
• Wasteful/Inefficient/Non-
DSM
flowing
Innovation
• Unpredictable/Stochastic Crafting
Open
Lean Innovation
• Is it possible to craft
an open innovation TRIZ Embedded
process to be LEAN? Lean Open

Innovation
• Is it possible to craft Network
an open innovation
process to be
INNOVATIVE?
Idea Hit Ratio
Idea Productivity
Confidential

Failures/Mistakes/Errors
Burning your hand is a small
price to pay for a good
idea.

PLEASE LET YOUR
EMPLOYEES FAIL!

Confidential


CONCEPTUAL SOLUTION:
GLOBAL ENTERPRISE AS A SOCIAL
SYSTEM
The Tipping Point
that refers to the moment when

something unusual becomes common. The
book seeks to explain "social epidemics",
or sudden and often chaotic changes from
one state to another. (Wikipedia)

Confidential ©

Three types of people create Idea Tipping Points

Connectors are those with wide social circles.
Mavens are knowledgeable people.
Salesmen are charismatic people with powerful
negotiation skills. They exert "soft" influence rather
than forceful power.
The PROCESS of TIPPING POINTS

The Law of the Few: Find out Connectors, Mavens and Salesmen – a
few of these is what one idea needs to become an epidemic

Stickiness: Ideas or products found attractive or interesting by others
will grow exponentially for some time.

The Power of Context: Human behavior is strongly influenced by
external variables of context.
Confidential © CRAFITTI CONSULTING

LIST – INVENTIVE THINKING

HOW TO INVENT, UNDERSTAND and
SOLVE PROBLEMS – How to Innovate

TRIZ - Theory of

Inventive Problem Solving

Confidential

A Brief History of TRIZ

TRIZ – Inventive Problem Solving by Altshuller

• 1946 Patent Officer
in Russian Navy Teoriya Resheniya Izobreatatelskikh Zadatch
• Discovered patterns
in patents,
World’s best ideas
published paper. A situation like mine World
in this situation
Sent to Gulag (Abstraction) Knowledge
Access (Access)
• 1954 released, Base
analysed 2,500,000 Abstraction Specific
patents
My specific situation My specific solution
• Identified what Evaluate

Me / my company
makes a successful
patent
• 1956-1985 TRIZ
formulated

• Same Problems and Solutions appear again and again but in different industries
• There are a series of recognizable Technological Evolution paths for all industries
• Innovative solutions used theories outside their own area/industry
• The most powerful solutions uncover and eliminate contradictions
Confidential

5 Levels of Inventions

• Pioneering Invention – based on newly discovered phenomenon

Level 5 (<0.3%) • Pushing existing technology to a higher level
• Revolutionary

• New System Developed

Level 4 (< 4%) • Interdisciplinary solutions
• Replacing old technology with New

• Radical change or elimination of one principal system component

Level 3 (19%) • One Engineering Discipline
• Resolution of a physical contradiction

• Slight Modification of the system

Level 2 (45%) • Knowledge from different areas within the industry
• Resolution of a technical contradiction

• A simple improvement

Level 1 (32%) • Knowledge within the trade
• No system conflicts are resolved

Confidential 26 March 21, 2010 © Crafitti Consulting Private Ltd.

Case Study: Technological Alternatives
Study on EP0922744

Confidential Patent Benchmarking Competitor’s Patents to TRIZ Lines of System Evolution

PASSION ….. Is the new Skill for the
New World …

Confidential


Confidential

Define Global Trends and Scenarios


Confidential

Red Ocean Versus Blue Ocean Startegy


In the red ocean, differentiation costs because firms compete with the same best-practice
principle. Here, the strategic choices for firms are to pursue either differentiation or low cost. In
the reconstructionist world, however, the strategic aim is to create new best-practice rules by
breaking the existing value-cost trade-off and thereby creating blue ocean.

Red Ocean Strategy Blue Ocean Strategy
Compete in existing market space. Create uncontested market space.

Beat the competition. Make the competition irrelevant.

Exploit existing demand. Create and capture new demand.

Make the value-cost trade-off. Break the value-cost trade-off.

Align the whole system of a firm’s Align the whole system of a firm’s
activities with its strategic choice activities in pursuit of
of differentiation or low cost. differentiation and low cost.

Confidential

Future Directed Patent Strategy Elements

Define Global Trends and Scenarios

Are we playing in the Red Ocean or are we creating
Blue Oceans? How can you create Blue Oceans and
Protect these as well.

Link business Strategy with IP Strategy
through Balanced Score Cards
Confidential


SETTING UP AN IP CELL
HIGH LEVEL PROCESS MAPS

Confidential

An IP Cell Buy COTS? Build?
Vision
Integrate Disparate
Document
Gap
systems?
Analysis

High Level organizational structure of IP
Report

Design Training Material and

Cell/ Processes/Systems/ Strategy
IP Asset
Management
System Needs

GAP Analysis Survey

schedule
Traini
ng
Needs

Confidential


IDEATION

Confidential

Business Patent
Strategy Strategy Direction Setting (Technology
Fields, Patent Portfolios,
Target Geographies)

Competitor’s Competitor’s
Patent Patent/
Portfolio Products

White Space Analysis

Patent Design Around Process
Patent Landscapes/

Idea Generation Processes
Patent
Watch

R&D
Processes IDEAS
Confidential


FROM IDEA TO PATENT

Confidential

Patent/Trade
Secret/
Publication?
Valuati
on?/
Invention

Patentable/ Stronger
Idea FTO?

Filing Strategy
Making Invention
Disclosure

Prior Art Search?

Patentabi
lity Claims
App
Assessm Drafting
Drafting
Paten ent Offic
e Patentabil
t ity Applicatio
Actio
Grant Assessme n
ns
Confidential nt Received


Commercialization

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Patent/ Product with
Patent protection

Active Licensing
Valuation Opportuniti
Infringem
Study es Study
ent Study
Legal
Actions

Negotiation
Strategy/
Agreements
Re-
Licensi Exclusive Cross Patent
Assignm
ng Licensing Licensing Sale
ent
Confidential

CREATING WEALTH ……..

• The Ongoing Wealth Revolution
• Explosion of Prosuming – The unpaid work all of us do
• Wealth System – Money economy enmeshed with
Prosumer economy

• The Ancient Wisdom – wealth beyond barest self-
sufficiency is UN-NATURAL (Aristotle)

Confidential

Value of a patent

How much is my patent worth?
As an entrepreneur you want a patent that has a high value

It is a question that needs a
multipronged approach

Confidential © Crafitti Consulting Private Limited March 21, 2010 44

Crafitti Multi-Dimensional Multi-Perspective
(MDMP) Valuation Methodology for a Patent

Assessing the Patent Using
Claims Theory of Inventive Problem
Length/Breadth Solving (TRIZ) – A Unique
Proposition
Citations
backward/ TRIZ Level of Invention
Current State of 77% of inventions are at Level 1 or 2,
forward the Patent/ 19% at Level 3, 4% at Level 4 less than <
0.3% at Level 5, Higher Level means
higher Valuation
Maintenance Patent Value

levels/ Legal Indicators TRIZ Laws of Evolution
9 Laws have been identified. Based on
Status the position of patent on each of these
TRIZ Function and laws it is possible to ascertain the

Remaining Resources Analysis strength of the patent

How does various parts of the invention
Life combine to perform the function and
how much resources have been utilized
Technical Family help in understanding the strength of
Invention
Description Size
Confidential 45 March 21, 2010 ©

Relative Centrality of the Patent in
its Ego-Centric Citation Network

1984 1985 1987 1996 1997 2000 2002 2003 2006 2007 2008 2009


Relative Centrality of the Patent in
its Ego-Centric Citation Network

1984 1985 1987 1996 1997 2000 2002 2003 2006 2007 2008 2009

Building the Ego-Centric Citation Network of the Patent


Relative Importance Index quantifies (using crafitti’s methodology) the
centrality of the Patent in its Ego-Centric Citation Network

1984 1985 1987 1996 1997 2000 2002 2003 2006 2007 2008 2009

Relative Importance Index gives a view
of vitality of the patent. If its value is
more than the rest of the patents in its
ego-centric citation network, valuation
should be more


Relative Centrality of Patent in its “Social” Citation Network
– taking a cue from social network analysis

Relative Social Importance Index gives a view of vitality of the patent in its social network of
patents which is formed by connecting all forward and backward citations of patents in its ego
centric citation network. This involves forming the “social” citation network of the Patent,
which may large number of patents

Using the AHP for relative importance of each
parameters from multiple experts

Parameter Relative Importance
Level of Invention 15.0%
Position as per Laws of Evolution 15.0%
Function/ Resource Analysis 15.0%
Citation Network Analysis 15.0%
Maintenance levels/Legal Status 5.0%

Technical Description 10.0%
Claims Length/ Breadth 12.5%
Family Size 12.5%
Total 100%


Multi-Dimensional Multi-Perspective (MDMP)
Valuation Methodology for a Patent

Future Scenarios
History of Current State of
Super System

in Technology,
Technology, Market Technology, Market
and Competition and Competition Market and
Competition
Historical Factors
Current State of Future State of the
System

related to the
the Patent Patent
invention/Patent

Current State of Future State of sub-
Historical Factors
sub-systems, systems,
Sub System

related to
components and components and
components and
parts that make-up parts that make-up
sub-systems
the patent the patent

PAST PRESENT FUTURE
Confidential 51 March 21, 2010 © Crafitti Consulting

Valuation Methods Used (in Practice)

• The Capitalization Approach

• The Income Approach

• The Cost Approach
• The Market Approach

Valuation using multiple perspectives and multiple
Scenarios works best


MDMP Valuation

• In each of scenarios (i) that emerge during the valuation study what are the
potential benefits that can accrue from the patent (bi) and the risks (ri)
– Incorporating the Invention in the existing products
– Potential Market Share enhancement
– Using the invention to Invent more adjacent areas
– Does it denies a space to competitor
– Does it enhances the portfolio of the inventor – the synergistic effect
– How easy it is to design around the patent?

– How easy it is to verify the infringement?
• In each of scenarios Value (vi) of Patent will vary within a range based on
benefits and risks of the patent loosing its relevance (bi) and (ri)
• Each Scenario also comes with an estimation of likelihood or a probability
estimation (pi)

• Overall value V = ∑ pi x vi = ∑ pi x f(bi , ri)

Patent Valuation Methodology

• Is Multi-Dimensional and takes into account multiple perspectives to produce
a robust valuation considering multiple futures, current state and past trends
• We combine multiple science based methodologies to come up with the
valuation framework
– TRIZ Based Patent Analysis
– Value Network Analysis
– Analytic Hierarchy Process

– Scenario Writing
– Standard Patent Landscaping and Analysis
– Systems Analysis

Multi-Dimensional Multi-Perspective (MDMPTM) Valuation does not produce a
single $ number. The methodology gives a sum total of past, current and
potential future value that the asset may create in a range of possibilities.

It is not enuf to be an innovator in the
knowledge economy ….


FINAL POINTS

• Complexity is Increasing, Scale is the New Frontier
• Deep Knowledge, Expertise may lead to Inertia and restricted viewpoint
• New ways of looking at reality are needed
• Artful Making, Lean Thinking, TRIZ, Social Computing, Open Innovation, Scenario
Planning needs to be integrated as a framework
• We need to design organization as a Learning Enterprise
• Integrated IP Response combining Patents, Design
Rights, Trademarks and Copyrights is the need in the

new world!
• To Generate Wealth – You have to PROTECT…

• YOU HAVE NO OTHER OPTION BUT to
INTENDED)
P (NO PUN

Confidential © CRAFITTI CONSULTING


Crafitti helps craft innovation
in multiple contexts.

Your Innovation Think Tank

Crafitti Consulting
Crafting innovation together . . .
www.crafitti.com
Navneet Bhushan
(navneet.bhushan@crafitti.com)
Confidential © Crafitti Consulting Private Limited March 21, 2010 57

Intellectual Property For Innovator

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