Patent Data-Driven Innovation

Harnessing the Power of Focused Data

I was recently honored by being asked to speak to IEEE USA, which Is part of IEEE, the world’s largest professional technical organization with over 400,000 members. The invitation extended to me was to offer thought leadership on a subject that profoundly influences the future of business and innovation: the critical importance of targeted patent data in guiding and enhancing business strategies.

In the exhilarating world of innovation, direction is paramount. Without it, even the most groundbreaking ideas can lead to exhaustive brainstorming, spiraling costs, and unfulfilled potential. So, how do we ensure our innovative pursuits are effective and efficient?

The answer lies in obtaining and leveraging focused patent data.

Why patent data?

The sheer volume of patent activity often takes many people aback. Did you know over 3.4 million utility patent applications were filed globally last year? [1] Don’t feel alone, as many people do not. Ultimately, this high volume of activity ensures that even the narrowest segments will contain important information.

Forward-thinking corporations around the globe have already tapped into this secret and have optimized their innovation processes by integrating data-driven insights.

You might wonder, “What insights are they obtaining that I am missing?”

This volume of patent information produces a treasure trove of market insights, technological trends, and legal references for technologists, engineers, investors, marketers, legal professionals, and executives looking for competitive advantage. I like to say this data forms the “legs of the innovation stool” by bringing together three significant sources of innovation data: technology, legal, and market. Even better, I have found that this data often brings disparate departments together to get on the same page and collaborate strategically using a common language to reach a shared vision.

The insights garnered from these now synergized teams sharpen the company’s strategic direction, fine-tune R&D initiatives, mitigate various risks, streamline legal operations, enhance financial investments, and strengthen SBIR applications.

Delving further into the intricacies of innovation, the indispensability of patent data becomes increasingly clear. A compelling reason is that a staggering 80% of the information it contains is exclusive to the world’s patent systems and unavailable through any other sources. [2] So, if we are looking to find where innovations are being documented, starting with the patent archives of the world makes sense.

We should also appreciate that innovations needing patent applications must be done quickly because of the vast financial incentives lost if someone else submits the same idea first. This chart illustrates a significant financial incentive, highlighting that, on average, 90% of an S&P 500 company’s valuation is attributed to Intellectual Property. Patents can be a significant portion of this valuation, depending on the industry and company.

How do we look at the Data?

All the benefits mentioned above provide a significant incentive for companies to obtain and analyze patent data. One of the aspects they’re often interested in finding is early insight into emerging innovative technologies and their potential market applications. Doing so can reveal early trends before they become apparent through other channels.

While the data gleaned from patents is undeniably rich and insightful, it is crucial to interpret it within the proper context. For instance, a company’s strategic focus—whether on pioneering bleeding-edge technologies, being an early adopter, or trailing as a laggard—will significantly influence how this patent data should be applied.

Companies can find success at any point along this spectrum, but it’s rare to find a business that openly identifies itself as a laggard. That said, numerous companies I know perceive themselves as more innovative than they truly are. Recognizing where your company genuinely stands in this technology lifecycle is vital, as it ensures that the patent data is utilized effectively to drive meaningful innovation and maintain a competitive edge.

Another example highlighting the importance of context is the complexity and sophistication of the questions that arise from analyzing patent data. Frequently, I encounter questions from clients such as:

1. Who is this unfamiliar company?
2. Why is there such a surge in activity within “our” technological domain, even when it’s not mirrored in “our” market landscape?
3. How does this fresh and revealing data align with or impact our corporate strategy?
4. Is there a need for periodic updates to this information?

While patent data is invaluable, it shouldn’t overshadow or replace other forms of data. Instead, it often prompts more profound and intricate inquiries.

Key Take Aways

At the end of the day, decision-makers seek clear and actionable insights—decisions like “proceed or halt,” “act now or delay.” Harnessing patent data and statistics empowers companies to navigate their chosen path more easily and clearly.

Stay Ahead with Informed Decisions: Dive deeper into the world of patent data and discover how it can refine your company’s strategy by scheduling a call with us today.

Credits and Citations:
[1] WIPO IP Facts and Figures, 2022 (World Intellectual Property Organization)
[2] Stool (Martina_L, Shutterstock)
[3] Guidelines for preparing patent landscape reports, 2016 (Anthony Trippe)
[4] Components of S&P 500 Market Value, 2020 (Ocean Tomo, LLC, used with permission)
[5] Technology-Adoption-Lifecycle (Craig Chelius, Wikimedia)