Patents grant to an inventor a property right issued by a governmental patent office. In the USA, the intellectual property right granted is “the right to exclude others from making, using, offering for sale, or selling” the invention in the United States or “importing” the invention into the United States. There are three types of patents:(1) utility patents – granted for new and useful processes, machines, etc., (2) design patents – granted for original ornamental designs for manufactured articles, and (3) plant patents- granted for new plant varieties. Most “high tech” inventions – semiconductors, software, would fall under utility patents. Similar patent regimes exist in other advanced economies that grant patent rights within their individual economies. The World Intellectual Property Organization (WIPO), a self-funding agency of the United Nations, helps to provide alignment of patent policies internationally.
The government agencies granting patents charge fees for their services. Under the Patent Cooperation Treaty (PCT), a single application can be presented to obtain patent rights in multiple jurisdictions, though this will result in fees to the relevant agencies in those jurisdictions. While inventors can file patent applications on their own, it is generally advisable to retain competent patent counsel to file on their behalf in order to maximize the scope of patent coverage and avoid procedural missteps in the filing process.
Rational inventors with limited budgets must balance the costs of obtaining patents with the breadth of patents rights they seek. This balance is obviously affected by the business strategy of the inventor (or, in many cases, the corporate assignee) – e.g., is international exploitation of the patent planned? If so in which markets, and how valuable are those markets expected to be? The role of patents in the business strategy is a broader question – e.g. whether the invention is planned to be practiced directly or licensed to others. For startups and other early-stage innovators, patent rights may be useful assets to help establish corporate valuations. Entities which do not practice their inventions, but rather only license them are referred to as Non-Practicing Entities (NPEs). There exists a broad range of NPEs from Universities to more specialized and speculative investors acquiring assets through bankruptcy[1].
As with the metes and bounds of real property, patent grants are delimited by the enumerated claims. Generally, existing patents only expire with time (20 years in USA) or through some other legal action to invalidate the patent. Some patent licensing obligations may be created by the assignee participating in Standards setting activities. Patents are required to be novel; and, often build on existing well-known technologies and other patents to provide additional functionality. Granting of a new patent does not invalidate an existing patent. In some cases, this can result in the creation of a patent thicket[2] where the existence of many overlapping and underlying patents may complicate licensing arrangements and constrain the commercial utilization of new patents. The smartphone, for example, may have hundreds of thousands of applicable patents[3].
Entities intending to commercialize novel technologies should be aware of the existing patent landscape. A patent landscape provides a snapshot of patenting activity in a particular technology area. A competitive landscape is one tool for developing business strategy and Patent Landscape Reports can provide that perspective for competing intellectual property. The recent WIPO technology trends report on Artificial Intelligence is perhaps a good example of a patent landscape report on a currently popular area of technology innovation.
While patent landscaping can help with broad strategic questions, more tactical decisions may require more targeted patent-related legal opinions to minimize legal risks and optimize commercial opportunities. These may include opinions of counsel on patentability, invalidity, infringement or freedom to operate. Depending on the business need, intellectual property may play greater or lesser roles; in the commercialization of technology research, however, the intellectual property representation of that technology research likely needs to be central to the business strategy. While technology developers are primarily focused on the implementation of their technology, the commercial valuation often lies in the relative strength of the intellectual property position vs competitors. Traditional competitive analysis of market positioning looks at offers available in the marketplace. Evaluating the patent landscape can identify potential new entrants based on their patent portfolios, as well as potential weaknesses in the positions of other known competitors.
If you are interested to get started with patent landscaping, you could use the patent office search tools (e.g., USPTO, WIPO, Google Patents) to extract the list or relevant patents to analyze; and WIPO publishes a manual on open source tools that could be helpful for custom analytics on patents. While this may be a good way to learn the method, it may not always be the best use of your time. Lawyers and other intellectual property specialists can provide commercial-grade reports for a fee. There are some commercial tools (e.g., ip vision, patent insight pro, vantage point) and some free tools that may also be a useful place to start (Lens.org, PIUG, patent inspiration).
[1] Steven A. Wright, Preserving Patent Licensor’s SSO Commitments, Assn. of Insolvency & Restructuring Advisors J., (2012).
[2] Carl Shapiro, “Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting,” Innovation Policy and the Economy 1 (2000): 119-150. https://doi.org/10.1086/ipe.1.25056143
[3] Reidenberg, Joel R. and Russell, N. Cameron and Price, Maxim and Mohan, Anand, Patents and Small Participants in the Smartphone Industry (2014). WIPO Working Paper, IP and Competition Division, 2014; Fordham Law Legal Studies Research Paper No. 2674467. Available at SSRN: https://ssrn.com/abstract=2674467