Patent analytics: A tool for growth and strategy
Patents are one of the most valuable assets of a tech startup. Nowadays, filing a patent is considered a strategic step in business as it gives a monopoly in the market, generates revenue by licensing, and can sometimes foster valuable business alliances.
However, it is often forgotten that patents filed by others are a rich source of information, such as a patent owner’s name, jurisdiction, and technology details, including the use of the invention, technology features, problem solved by the invention, etc. Thus, patent analytics, the detailed analysis of patents filed by others, can play a vital role in strategic planning and informed decision-making.
What is patent analytics (aka patent landscape analysis or patent mapping)?
It is a step-by-step process wherein information from a set of patents is mapped into various categories. This involves qualitative and/or quantitative analysis of patents filed by other inventors to gather intelligence on:
- Technology
- Market trends
- Competitors
- New commercial opportunities
- Company valuation
How can I use patent analytics?
Patent analytics needs cross-department collaboration. To get started, the objective of the study decides whether the R&D, product development, finance, marketing or business development team needs to be involved.
Key patent analytics applications
| For technology intelligence: Traditionally, patent analytics studies have been used to gain current awareness of technology (i.e., knowledge on what is achieved to date). Often, the description section of a patent provides information on unmet needs in markets. Startup owners can use this data in addition to consumer research data gathered from market research for future product development. If you want to expand into other industries, then analyzing the patents in detail might provide information on additional application areas wherein your technology can be used. Furthermore, looking at patent filing trends in conjunction with market research is useful for assessing the maturity level of a particular technology. |
| For strategic & competitive intelligence: Analyzing the patent owner’s details (assignee name) can help you to anticipate new competitors or their potential collaborations. You can look at a competitor’s patent filing country, as it is an early indicator of their geographic expansion plans. You can also identify the competitor’s interest in a particular technology and whether their R&D focus is increasing or decreasing by referring to their patent filing trend. |
| For business development: Sections of patents, such as assignee and inventor, provide information on who is/are the owner(s) of the relevant technology and interested partner(s) for business development. Thus, startups looking to monetize their patents can use the patent analytics studies to identify their customers and competitors either for merger/acquisition partners or out-licensing. On the other hand, when a startup’s objective is to expand into a new geographical market or product development and it is not possible because of the competitor’s patent, then patent analytics study may help to understand in-licensing or cross-licensing opportunities (open innovation). |
| For financial analysis & reporting: The use of patents as collateral by banks is now accepted practice. Information on such patents can be identified from the US Patent Office (USPTO). Thus, you can analyze such patent data with other publicly available information to estimate the value of the company’s intangible assets, especially when the company is listed in the capital market. When your objective is to analyze the company’s valuation, then combining patent analytics with financial reports will give a true reflection of the company’s value. This becomes important as IFRS and GAAP reporting standards are based mainly on the valuation of past and tangible assets. |
The 7 steps to conduct a patent analytics study
The World Intellectual Property Office (WIPO) provides “Guidelines for Preparing Patent Landscape Reports,” which involves the following steps:
- Establish the purpose of the patent analytics, such as product development, idea generation, competitive intelligence, risk management, monetization, M&A, etc.
- Determine which patent database to use
- Define the boundaries of the technology area of focus
- Determine country of focus, how far back in time to look, etc.
- Use different search strategies, such as keywords, assignees, patent class code or semantic search
- Identify and download lists of patents that are relevant
- Map the patents for relevant details from the abstract, claims, bibliography, description, and other sections
Tools to conduct patent analytics study
To perform patent analytics, users first need access to:
- Patent databases: Search and download patent data. Use free databases (e.g., Google, The Patent Lens, European Patent Office) or commercial options (e.g., Clarivate Analytics, Orbit Intelligence).
- Analysis tool: Use MS Excel to organize, map, and visualize mapped patent data.
While traditional market research and financial analysis are useful tools to generate market insights, integration of patent analytics studies can further enhance your decision-making process, alert you in advance, and prepare you for your next step of action.
Hitesh Badgujar