Intangible assets now makeup 80%of the business value whereas a couple of decade ago it would have been tangible assets, that has more importance. Individual patents contain valuable details about how an invention is made but a large collection of patents reveal competitively advantageous pattern of behavior market. The world intellectual property right well explains that the objective of competitor intellectual property intelligence is not to steal a competitor’s property. Rather its not to gather information that provides an understanding of a competitor’s firm structure, culture, behavior, capabilities and weaknesses. Furthermore millions of patents are filed every year and having access to public information about the invention in other parts of the world keeps you well informed about tangible markets. You can validate your ideas against existing products that have proven successful in other, less visible jurisdiction. Moreover investors love patents.

Four reasons why patent data is a great source of intelligence:

  1. Up to date market and competitors intelligence: IP Intelligence gives you an insight into market in which your competitor are active and whether there are any changes in direction. According to Lemley 2001, patents indicate outsider that a company has developed its technology to such an extent that it has defined and carved out a market niche. Early access to information like this can enhance your company’s strategy you might discover a previously known yet lucrative niche based on your competitors’ movement.
  2. Low hanging fruit from abandoned, invalid and expired patents: Patents prevent others from selling and using an invention. However, they also contain detailed information about how an invention is created. According to the EPO, 80% of the technical information can be found in patents. Furthermore around 85% of patents are no longer in force because they have been declared invalid, expired, or the patent hasn’t paid renewable fees. Therefore, these inventions are in public domain and legally free to use. Companies generally cant find solution to technical problem by looking at these patents and use the information in them to develop their technology. Or you can use inactive patents inventions from one industry to solve a technical problem in yours without fear of infringing. Expired patent are especially useful in the pharmaceutical industry. Once patent has expired anyone can manufacture, use or sell the product previously protected by the patent. Patents whose renewable fees have not been paid are considered invalid and if abandonment was unintentional other companies can revive the patent for the fee. This is useful information if you’d been previously blocked by a patent or want to develop a patent portfolio but dont have time and resource to invest in R and D.
  3. Blocked by a patent get a license: If you are large company that has no longer R&D function or doesn’t patent anymore you can still use patent information to find technologies you can license and used to enhance your product and services. If there’s valuable patented by another company, it may be cheaper in terms of time.
  4. Evaluate M&A opportunities with IP Intelligence: Google is most notable example of a company that did not have many patents but gain significant value by acquiring some. Google was late to patent game, but Apple was filing lot of them. According to Google both companies have a natural fit because Google is great soft wares and Motorola is good at hardware. By acquiring 12,000 patents from Motorola’s portfolio google was able to innovate faster and get a larger market coverage which is kept it on par with competitors.

IP Intelligence also enhances due diligence on a company’s asset before initiation and merger of acquisition. The data in patents inform you of the value’s of company assets and how innovative these are compared with rest of the market. For example, if a company’s patent is highly cited by other companies and inventor’s that suggests the technology is sought after and has great commercial value. IP data also shows you whether the company you are thinking of acquiring is operating is highly litigious area, where the unwelcome threat of damages always loom large.

Patent Citation also show you the direction in which the patented technology is developing. If someone cites a patent, it means they have developed a unique invention based on technology  protected by that patent. If most of the citation are in relation to advances within a specific technology area, you can gain an insight into other M&A opportunities.