For example, assume that you are thinking of investing in a technology in which widgets are a critical component. As a part of your investment due diligence efforts, you purchase a patent landscape analysis from a vendor that collects and graphs the search results for you to consider in your business decision-making framework. If the analysis reveals that there are many mentions of the word “widget” in the search results, you may then conclude that investment in widgets could be problematic due to pre-existing patent rights. Further assume, however, that none of these patents specifically claim a widget. This lack of claims covering widgets would likely make you free to use widgets in the technology in which you are considering investment. In this example, examination of the claims specifically would reveal that your freedom of action was not limited by the existing patent rights of others. A proper analysis of the patent data would also reveal that your company might be able to obtain its own patents for your proprietary technology improvements, thus potentially reducing your competitor’s freedom of action in your marketspace should you choose to introduce products in this area.
Analysis of the claims is thus critical to successfully generate business insights from patent data. So why don’t patent landscape vendors do this? I believe that this is due to the origins of the patent landscape industry. Patent landscaping developed primarily from a data analysis framework, not from the framework from which patents derive their business value, that is, the claims. The analysis of patents from this data framework does allow large amounts of patent data to be collected, graphed and analyzed. However, this perspective ignores the real reason that patentees disclose confidential information in patent filings—to prevent others from competing in the claimed technology.
Just because the existing methods of analyzing patent data are flawed, does not mean you can ignore patent data, however. To the contrary, like the makers of the BlackBerry and Boston Scientific, you ignore patents only at your own peril. Since you cannot ignore patents in making your business decisions, your analysis efforts must therefore provide you with a cost-effective synopsis of the subject matter of the claims of a large number of patents. Moreover, this analysis must provide you with the patent claim information in a business-usable format. Such an analysis will allow you to understand how the patent ownership of others will affect your ability to freely act in the marketplace. In other words, to understand how patents will affect your innovation or technology investment payback, you don’t need a patent landscape, you need a “freedom of action” analysis.