patents in technology acquisition - do we know what we are saying?

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c r a f t i n g i n n o v a t i o n t o g e t h e r

March 23, 2014 1 © Crafitti Consulting Private Ltd.

Patents in Technology

Acquisition – Do we understand,

what we are saying? Navneet Bhushan [email protected] Phone: +91 9902766961

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KEY POINTS – We need to Innovate!

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IP Imperialism: Indians even in India are not filing patent applications


IP Imperialism

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The English word ‘patent’ is derived from the Latin word ‘patere’ meaning ,- to be open.

• A Legal grant by a Government

• Terms of grant

– In return for disclosing an invention publicly so that others can learn from it, and paying the processing fees, the Govt. of the country will grant the inventor of the invention the rights to exclude others from making, using, or selling the invention for a limited period of time

What is a Patent?

When you patent your invention - you disclose your invention or "technical solution to a problem". If that Patent application - your disclosure is Novel, Inventive and have industrial application and is "sufficiently" disclosed you may get a right by the government of the land/country to exclude others from exercising that "invention" for a limited time period - currently 20 years from the date of filing. That right is called the "patent right"!

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Case Study 1 (Engineering) – (1)

Scenario

• An MNC had an invention that was patented and that expired in 2010 in multiple countries but it was not filed in India.

• In 1996, the MNC filed another patent which was a slight extension of the base patent - but this time through PCT route they filed in India as well. In India the application was published in 2004.

• The new patent was granted - they cited the base patent as prior art and created some mumbo-jumbo the way people who draft these applications know so that the new application was considered an invention over prior art.


The MNC sent a letter to one of the big SME's in India,

saying their product infringes the patent - hence they

should stop production and sales.

The Indian company really was not aware of the

patent and what actions to take.

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Solution

• After months of struggle, they found us. We suggested that (a) Let us look at the extent of infringement (b) let us look at the validity of the patent In a week of study, we were able to prove that on technical grounds Patent is not valid (purely on Technical grounds) (a) Insufficient disclosure of how to exercise the invention (b) Prior art - the old expired patent was the main patent - and the extension was sort of small extension (c) Prior use - there was a product existing in the market since 1980s which clearly shows that invention described in the patent is not Novel.


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• Prior art - the old expired patent was the main patent - and the extension was sort of small extension

• Questionable Novelty!!


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Key lessons and steps (a) Maintain a continuous patent watch in your industry (b) As you see a patent for which you have a prior art or prior use - immediately raise a pre-grant opposition in Indian Patent office (this is much less costly) (c) If someone threatens with a patent - please do the following i. verify the extent of infringement - many times infringement may be very small or negligible ii. Check the validity of patent - given the pace of patent apps and lack of sufficient availability of manpower in patent offices - many patents are granted with very low level of assessment - 50% of patents will be invalid on various grounds (


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Key lessons and steps (d) If there is an infringement and patent is valid 1. Get into carrying out a Technology Alternative Studies (TAS) on the patent. 2. Carry out a patent valuation study

3. Get into a discussion/negotiation with the Patent holder to acquire the technology or pay a royalty Please understand the extent of threat that your field is facing due to patent system becoming more pronounced and India becoming a Big Globally lucrative market. Our defence is in our hands..


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Intel’s Ex-CEO


PARANOID!

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TRIZ – Inventive-Problem Solving by Altshuller

Teoriya Resheniya Izobreatatelskikh Zadatch • 1946 Patent

Officer in Russian Navy

• Discovered patterns in patents, published paper. Sent to Gulag

• 1954 released, analysed 2,500,000 patents

• Identified what makes a successful patent

• 1956-1985 TRIZ formulated

• Same Problems and Solutions appear repeatedly in different industries (Myth: My field is Unique )

• There are a series of recognizable evolution paths for all technical systems (Myth: Evolution is Completely Random)

• Innovative solutions used theories outside their own area/industry (Myth: Innovation happens through Deeper Knowledge)

• The most powerful solutions uncover and eliminate contradictions (Myth: Optimization is the Focus)

TRIZ itself does not solve problems. Problems are solved by people.

TRIZ teaches how to solve problems.

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5 Levels of Inventions

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• Pioneering Invention – based on newly discovered phenomenon

• Pushing existing technology to a higher level

• Revolutionary Level 5 (<0.3%)

• New System Developed

• Interdisciplinary solutions

• Replacing old technology with New Level 4 (< 4%)

• Radical change or elimination of one principal system component

• One Engineering Discipline

• Resolution of a physical contradiction Level 3 (19%)

• Slight Modification of the system

• Knowledge from different areas within the industry

• Resolution of a technical contradiction Level 2 (45%)

• A simple improvement

• Knowledge within the trade

• No system conflicts are resolved Level 1 (32%)

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WHAT IS THE LEVEL OF YOUR INVENTION?

QUANTIFYING THE LEVELS OF INVENTION


APPLE Filed this patent in 2005

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Crafitti’s Level of Invention Tool Key Changes described in this patent compared

to prior art


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Crafitti’s Level of Invention Tool How long will it survive?

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Quantifying the Height of Inventive Step – Using Lines of System Evolution


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Claims


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Identify System Hierarchy


Cattle/Cows, Feed, Drinking, People to feed the

cows,

Owner/Manager, Type of feed, Preparation of

the Feed, Delivery/Management of the Feeding

process, Other cows in the dairy

Constituents of the feed, amount of food,

amount of water

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Identify Problem in the existing system


• Inefficient Daily distribution of food ingestion

by animals,

• Low Amount of water drunk by animals

•Digestive disorders such as acidosis or bloating

Food for the cattle is given one time of the day

and there is no control on how much each cattle

eat during the day

Feed is more than the capacity of

eating/digesting, There is no time for the cattle

to drink water as it keeps on eating

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Key Changes proposed in the Patent


Feed-Additive capsicum oleorasin added to the

feed

Produces irritation and heat sensation in the stomach hence leads

to less food intake and a second peak of more food intake

Leads to more drinking of water

No need to manage the distribution of food

intake throughout the day

Healthy animals

Process of MicroEncapsulation of the new addititive

Flexibility to release the chemical (capsicum

oleorasin) to specific part of the digestive track of

the animal

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Quantify the Level of Invention


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“Life” of Invention for various inventiveness levels


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Life of Invention Curves


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Traditional methodologies to value patent

• Cost based approach

• Market based approach

• Income approach

• Black scholes model

• Relief from royalty method

• Competetive advantage method

• Fair market value

• Valuation using multiples

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Patent Valuation Using Crafitti’s Multi-Dimensional Multi-Perspective (MDMP)

Valuation Methodology

• 4 Key Pillars of Our Holistic Approach

– TRIZ

– Social Network Analysis

– Scenario Planning

– Analytic Hierarchy Process (AHP)

• Multi-Dimensional Multi-Perspective Methodology


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Crafitti Multi-Dimensional Multi-Perspective (MDMP) Valuation Methodology for a Patent


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Current State of the Patent/

Patent Value Indicators

Citations

backward/

forward

Maintenance

levels/ Legal

Status

Technical

Description

Family

Size

Claims

Length/Breadth

Remaining

Life

Assessing the Patent Using Theory of Inventive Problem

Solving (TRIZ) – A Unique Proposition

TRIZ Level of Invention 77% of inventions are at Level 1 or 2, 19% at Level 3, 4% at Level 4 less than < 0.3% at Level 5, Higher Level means higher Valuation

TRIZ Laws of Evolution 9 Laws have been identified. Based on the position of patent on each of these laws it is possible to ascertain the strength of the patent

TRIZ Function and Resources Analysis How does various parts of the invention combine to perform the function and how much resources have been utilized help in understanding the strength of Invention

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COMPARING APPLES WITH ORANGES – AN EXPOSITION OF AHP

Similar to Decision Matrix approach but allows a wider range of values in comparison of alternatives

Developed by T.L. Saaty (1980)

AHP invites pair-wise qualitative comparisons

The problem is organized as a hierarchy

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STRENGTH OF NEW CONCEPTS

NOVELTY BUSINESS VALUE FEASIBILITY

C1 C2 C4 …..

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Crafitti Multi-Dimensional Multi-Perspective (MDMP) Valuation Methodology for a Patent


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Current State of the Patent

Future State of the Patent

Historical Factors related to the

invention/Patent

Current State of sub-systems,

components and parts that make-up

the patent

Future State of sub-systems,

components and parts that make-up

the patent

Historical Factors related to

components and sub-systems

PAST PRESENT FUTURE

Current State of Technology, Market

and Competition

Future Scenarios in Technology,

Market and Competition

History of Technology, Market

and Competition

Sub

Sys

tem

Sy

stem

Su

per

Sys

tem

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Scenario Writing and Thought Experiments (understanding something about something in future)

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Scenario Writing: Description of sequences of

events for thought stimulation on potential crisis and to anticipate future. Usually include plausible, but unexpectedly important situations and problems that exist in some small form in the present day.

Thought Experiments: the process of employing imaginary situations to help us understand the way things really are. The understanding comes through reflection upon this imaginary situation.

Crafitti Approach Combines Scenario Writing with Thought Experiments

During the Idea Crafting Engagement for one of the world’s top three financial data provider, four global scenarios were written and future initiatives played out in each of Global scenarios as thought experiments to rank order the initiatives

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An Integrated Approach – ALVIS THINKING

ALVIS

Value Thinking (Minimize Waste – Maximize Value)

Inventive Thinking

(Ideality – Functions – Resources)

Systems Thinking

(Holistic Approach – Exploring Complexity)

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Analytical Thinking (Divide

complexity into multiple solvable

problems )

Logical Thinking

(Informal and Formal Reasoning)

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TECHNOLOGY ACQUISITION

• CLOSELY LINKED TO PATENTS

• BE AWARE OF PATENTS IN YOUR FIELD

• SYSTEMATIC PATENT WATCH

• PATENT VALUATION IS VERY DIFFERENT FROM A COMPANY VALUATION

• SCOUT SELECT SYNERGIZE THE TECHNOLOGY THAT YOU NEED

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Thank You

Crafitti Consulting Pvt Ltd |www.crafitti.com

([email protected]

Innovationcrafting.blogspot.com)

+91 9902766961

© Crafitt

i Consul

ting Private Ltd.

Navneet Bhushan

[email protected]

patents in technology acquisition - do we know what we are saying?

Business

key lessons

confidential

case study

prior art

main patent

base patent

solve problems

expired patent