The Value of Patent Research

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The life of any startup is best described by the Red Queen from “Through the Looking-Glass”: “It takes all the running you can do, to keep in the same place”. It is a constant race to deliver on your promise faster than anyone else can. What makes this race so excruciating is that most of the time you don’t even have the full picture of who you're racing against, particularly when you work in the deep tech segment of the venture economy.

Any data that provides insight into the landscape you’re operating in is precious. One often-overlooked way to gain that insight is by delving into the patent activity of your rivals. In this blog post, we explore the immense value of researching competitors' patent activity and how it can empower deep tech startups to thrive.

Understanding the Competitive Landscape:

The first step is to identify the keywords and/or International Patent Classification codes you’re interested in and run a search to see who is filing patents in these categories. In our case, we find that a significant portion of patents pertinent to building a smart contact lens are filed by major manufacturers of conventional contact lenses like Johnson & Johnson, Bausch & Lomb, Novartis, followed then by tech giants like Google/Alphabet or IBM. Other important metrics include the share of relevant patents in a company’s total portfolio of patents in a given time period and the pace of filing new patents. This helps identify companies that are focusing on your areas of interest. However, remember that in the case of giants like Intel, IBM, Samsung, even a small fraction of their resources dedicated to a project can be an overwhelming force.

Understanding Geography:

Another insight you can glean from this research is the geography of patent filings. The key information here is the countries where your competitors are attempting to legally protect their intellectual property. These are likely your priority markets. Large companies, with their broader insights, access to customers, market research, and experience, can make better assumptions about the markets with the greatest potential.

In our case, patenting activity in North America, the UK, and the leading economies of Southeast Asia were not surprising. However, we also observed high patenting activity in Australia and Brazil. In Europe, all patents are concentrated in France and Denmark. Still, this observation shouldn’t influence your conclusions too much, given the EU’s common market.

Identifying Areas of Focus:

Each patent is filed under the International Patent Classification system that categorizes patents by topic. Reviewing the data on where a company's patents are categorized can help you understand its focus areas.

You should typically pay attention to the IPC codes in ranking positions #2 and below. #1 would be the most general one (like “Optical parts of glasses and contact lens” in our case) and the same for all players, but then you might begin to see very different focuses. Some of these differences are obvious (like J&J having more patents in actual lens technology, while IBM or Mojo Vision having more patents in non-optical elements), but sometimes you may identify unexpected forays into new territories by your competitors that could alert you.

The differences in patent geography between companies can be a good indication of their priorities and their concerns about competition. For example, in our case, we could see that healthcare companies like Johnson & Johnson tend to spread their patent coverage worldwide, while IT companies, like IBM, typically focus on the US.

Avoiding Duplication/Finding Partners and Customers:

Researching competitors' patents helps startups avoid reinventing the wheel and duplicating efforts. Identifying existing patents allows deep tech entrepreneurs to gain insights into the prior art, preventing costly mistakes and potential legal battles related to patent infringement. This knowledge also enables startups to focus their resources on areas with less competition, accelerating their time to market and reducing development costs.

On the other hand, collaboration is often key to success. By analyzing competitors' patent activity, startups can identify potential collaboration opportunities. Patent filings often reveal complementary technologies or areas where partnerships could enhance both parties' market position. Leveraging these insights, startups can explore strategic alliances, joint ventures, or licensing agreements to drive innovation and accelerate growth.

The value of researching competitors' patent activity cannot be underestimated. From understanding the competitive landscape to identifying collaboration opportunities and optimizing IP strategies, deep tech startups gain a wealth of insights that can drive success and propel their innovation forward. By embracing this research approach, startups can unlock the hidden treasure within their rivals' patent activity.

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