Using Patents as Key Information Sources - Competitive Intelligence

Using Patents as Key Information Sources
for Competitive Intelligence and Business Strategy
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Benefits of having an IP strategy

Competitive Intelligence

Many companies pay scant attention to their competitors. That might have seemed reasonable in the past because it was so difficult and time-consuming to do the research. But the Internet has changed everything. It offers ease of information gathering that would have been considered miraculous a short time ago, and every company should take full advantage of it. Not keeping abreast of competitors is likely to result in the inch by inch erosion of your market and technology positions over time.

Gathering competitive intelligence does not have to be cloak and dagger, or be ethically-questionable to be enormously valuable. For the most part, it's simply pulling together and analyzing information from public sources. It's not hard to gather your competitor's news releases, brochures and white papers, trade press articles, SEC filings, and in some cases legal documents and filings. High up on the list of legal documents are patents.

Patents are one of the primary sources of competitive intelligence, often providing information that appears nowhere else - and often overlooked. They too, can be plucked off the Web, although the task of uncovering the pertinent material can be daunting. According to one estimate, as of 2003 there were 10,000,000 issued patents already in existence with another 10,000 appearing weekly [4].

Nevertheless, it's crucial to do the work because it can help guide your technical development, uncover competitive opportunities, threats and infringements, and provide deep insight into your competition's future plans. It provides an essential foundation for evaluating both inward and outward licensing opportunities, and merger and acquisition candidates. Foreign patent applications can let you know about a competitor's international expansion plans.

You can even monitor the correspondence with reference to patent applications between your competitors and patent authorities in many countries, including the US. This can let you know what the examiners think about your competitors' pending applications, and what competitors think are the important aspects of their inventions. Such a window can provide valuable insight into a competitor's thinking and business strategy [5].

Competitive intelligence also provides an excellent foundation for establishing your own integrated business and IP strategy.

Business Strategy

With competitive intelligence in hand, it becomes possible to stake out a plan of action. The best IP strategy is one that's consonant with the business' overall technical and marketing roadmap [12]. Obviously, there first has to be internal agreement on where the executives of a firm want to take the business. Out of necessity very small and very large companies usually have detailed written plans, but a lot of in-between-sized companies don't do much detailed planning at all. Understanding where and how your competition is moving ahead can be a great help in focusing your own efforts. It puts you in a position to ask yourself such questions as:

Which are the core patents that support our business?
What patents do we need to defend or support our business now and in the future?
What patents do we need to block our competitors now and in the future?
What intellectual property do we need to maintain our freedom to operate?
What external patents or know-how can we acquire or license to support those efforts?
Which patents can we prune from our portfolio for cost savings?

Establishing a carefully-considered strategy can improve and protect both your market and financial positions by blocking existing competitors, and by preventing new ones from making the attempt. It maintains your product and service uniqueness and provides brand and market differentiation.

Patents can also be used as an offensive weapon. Not only can you strategically block a competitor's patents with your own - but why let them go about competing with you at all? You can threaten or initiate litigation that wastes their treasure and ties up their time. In many countries you can challenge or oppose their patent applications before they issue. It may be possible in this way to obtain significant delays, or even prevent their patents from issuing at all. A delay can be very valuable when you're trying to invent your way around a competitor [5].

All interactions with competitors need not be hostile, however. Knowing what they're up to permits you to approach them about potential infringements with your IP, and to discuss the possibility of licensing or cross-licensing at a time that may be more advantageous to you, and before they can obtain the full value of their invention [5].

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