Tracking the cupcakes, worldwide
R&D Magazine Blogs
Posted by Lindsay Hock at 10/13/2009 9:02 AM
rdmag.com
For the United States Patent Office, life is kind of like a Dickens novel. Patents are sliding into its office like cupcakes on a conveyor belt, reflecting the power of thought that prevails even under an economic wet blanket. But it’s got a 700,000 application backlog and there’s the matter of $200 million shortfall to address, as well as patent rules about 50 years old.
But innovation it’s rapidly breaking free of federal borders. Dow and BASF—two companies with worldwide reach—today pointed a finger at one example of this movement.
The Patent Asset Index, invented by ideas expert Holger Ernst, was created as a new way to track the R&D power of a company. It’s not the first mathematical framework to analyze patent data, but it is, according the two chemical giants, the first such tool to go global with its analytics.
Ernst, a professor at the WHU—Otto Beisheim School of Management, Vallendar, Germany, who wrote his dissertation on the use of patent information in strategic technology management, built the tool through the company PatentSight specifically to track chemical companies. But he believes the system will be just as effective when looking at other types of companies.
As described today’s Dow/BASF release, the Patent Asset Index is a science-based metric that “overcomes the key limitations of current patent analytics by offering a global perspective, more transparency and a more robust quality measurement for the assessment of patent portfolios.”
Basically, the index includes more information, tracking the IP trends of a company’s worldwide operations. It works like this: the number of worldwide citations received, a familiar metric, is compiled for a given company to measure Technology Relevance; the size of the market protected by valid patents and patents pending is processed and benchmarked to that of the U.S. (still the biggest patent market); and these two are combined to form the Competitive Impact (note that these are all trademarked terms).
Dow, in its 2008 results, in placed first in the Technology Relevance metric, which reveals which patents are the most cited in other patents. In this area, Dow, leads all chemical companies. BASF meanwhile, achieved the highest index score overall. Both results are probably expected, but good validation for investors.
More importantly than that though, is what the index says about the little guys. By looking at what other companies are doing, Dow and BASF could, aside from identifying competitive threats, conceivably find new strengths. Any areas of emerging innovation that heretofore had gone ignored might be the next big opportunity. Areas of R&D growth might be spotted a little earlier than before.
So how to do we know the index has any validity? According to this presentation on Slideboom the Competitive Impact of patents that have been abandoned by their owners is less than a tenth of patents that have been attacked by competitors. PatentSight says this is a statistically relevant value that reflects the viability of their index.
Whatever the case, globalization like this will have to be the direction of intellectual property overall. Despite wanting to remain flexible and open to new ideas even to the point of sharing them, large companies are risk averse and the knowledge that their patents are being attacked or ignored in other countries prompts them to file and defend patents in multiple countries. A tool like this will help them decide where to bring their heaviest guns.
Hopefully, too, tools like this will spur better R&D. The opinion of Ernst and these two companies, of course, is that such a tool will speed innovation. Yes, globalization of the ideas market is already doing that, prompting innovation centers in India and China. But could zealous IP protection lead to an unintentional stifling of innovation rather than rapid growth? Instead of allowing a new idea to grow independently (and unexpectedly), a company such as Dow or BASF might be tempted to snap it up quickly, bringing it into a corporate culture that might not be set up to allow a new area of R&D to take shape.
To be fair, most global companies worth their salt will have recognized that acquisition without preparation can be a slippery slope that’s hard to climb. Spin-outs are a common solution. But big companies also know that it’s not easy to shift gears when you’ve been left behind on the idea train. Will they know enough, though, not to jump the gun?
Posted by Lindsay Hock at 10/13/2009 9:02 AM
rdmag.com |
