Forward-looking FTO strategies: Using patent information for R&D strategy, predictive patent filing and competitor avoidance


A form of this article was first published almost 10 years ago. With the exponential increase in data since that time and the advent of increasingly powerful analytical software, it is perhaps even more relevant now that it was then. After you’ve read to the end, consider how well you would be placed now, if you had taken on board the recommended strategy when it was first published!

The big issue: the cost and timing of FTo work

The importance, cost and timing of patent freedom to operate (FTO) searching is a hot topic when it comes to allocating IP expenditure in start up and SME companies with limited resources. Considered a critical factor in obtaining funding, but on the other hand requiring significant investment for anything other than a micro-portfolio of IP, it’s a topic often placed in the ‘too-hard’ basket.

But what if there was a more manageable way to go about achieving similar ends which at the same time could actually add more value to the business than just surety that no infringement of competitor patents will occur?

One process that can reduce FTO risks, while simultaneously adding creating a valuable R&D tool, is to actively monitor the patenting activity of companies in your technology space on an ongoing basis.

The problem of looking in the rearview mirror

How can a company with relatively limited resources monitor the activities of competitors? Given the clear implications of not pursuing such efforts, the question might be better couched, “can any company afford not to be aware of competitor activities?”

While prior art searching can provide a background for competitive analysis and freedom to operate review, companies need to be more forward thinking. A prior art search is useful only on the day it was performed. After that, it is literally history, as new developments continue to occur.

Technological developments continue to move at an increasingly faster pace.  Many companies are swamped by the level of competitor patenting activity and have difficulty placing their innovations in context with those of others. This can lead to the prospect of a company developing what they believe to be new products and services only to find one to two years down the patenting time line that there was much prior art of which they were unaware or that concurrent competitor developments went unnoticed. Significant R&D dollars are wasted because a company is blind to such competitor activities, often based on the belief that to monitor such activities is expensive, time consuming and beyond their available resources.

Building a knowledge bank

In terms of patents, much can be achieved to address both constantly looking rearwards and the need to predict the next ‘big thing’ with a relatively modest outlay and by utilising the free internet resources, or low cost subscription services. The strategy discussed here affords a multipurpose output whereby, as well as providing a direct view of competitor patent activity, it also leads to a more knowledgeable workforce better placed to add ongoing value to the company’s R&D processes.

The core principle of the methodology is the creation of a living database of competitor patents and patent applications that is updated regularly via information freely available on the internet.

There are two major search engines that are valuable in the creation of such a patent database. First, the USPTO Patent Full Text and Image Database is a free facility enabling very specific searching to be performed. New US granted patents are published weekly as are new US applications. Second, WIPO publishes new PCT applications weekly. Utilising international patent classification codes, targeted searches in specific areas of technology can be very quickly performed. The data procurement may be performed in house or an external alert service may, alternatively, be utilised.

Some pre-work is required in order to define the breadth of search required. It will be technical area specific; strongly dependent on the current activity in that field and in some cases a number of patent classes may need to be utilised. In others, a single classification may suffice.

A database is then created in a simple spreadsheet form, usually containing the applicant name, the patent or application number, the date of publication and a short sentence describing the contents of the document. Each week the database is expanded. Initially, the data may seem random and haphazard, however, if the process is rigorously adhered to, over a period of months patterns of activity will emerge. Viewed over a period of 1-2 years, the dataset will begin to provide an overview of all significant patenting activities in the field. The data can be easily manipulated, so that the activity of individual competitors can be highlighted.

Much of the value of this strategy is only realized once the dataset is sufficiently mature, such that trends and directions in patenting can be gleaned; however there are also immediate advantages.

It is highly valuable to be aware of a competitor activity shortly after it publishes. This may have an impact on a company’s current internal research programme. It may impact a company’s freedom to operate current or future technologies. It may also impact a company’s thinking with respect to internal innovation, sparking new directions for research. As is well appreciated, technology continues to build on itself and being aware of new technologies as soon as they publish can be of extremely high value and avoid the wasting of thousands of dollars on prosecuting low value patent applications and in pursuing unnecessary research and development programmes.

It is recommended that this activity be undertaken by a skilled researcher with a high appreciation of the technical field in question. It is not intended to be an exercise in rewriting the publicly available data in a list. Rather, it is an exercise in critically analyzing the data and placing each relevant citation in context within the database. Catch phrases are often useful as a method of classifying and highlighting citations. Upon selection of the appropriate patent classification codes it is extremely rare for a relevant patent or patent application not to be identified.

Eventually, the database provides valuable FTO information, offering, at least, guidance as to what patents may potentially cause issue. While, of course, not replacing a formal FTO search and opinion, the present methods are of very low cost, particularly in view of the other benefits which ensue. Utilisation of fee-for-service databases can exponentially increase the value of the output because they include tools for information analysis and presentation which can eliminate slavish review of each document that is revealed.

In the author’s long experience in R&D at multinational chemical companies, the exercise can be performed in about two hours per week for a defined technical field. It will be apparent that this represents a small investment relative to the immense amount of information that eventually ensues. The attraction is that any company can undertake this exercise, as all of the resources are freely available and there is no need to subscribe to expensive databases or utilise the traditional services of an IP watch provider.

Alternatively, the activity may be performed by an external IP provider that has the necessary technical expertise to place each new citation within the context of the client’s business. This scenario has the advantage of strengthening the client/IP provider relationship and potentially offers future cost savings with respect to IP strategic advice. Long term, a company’s confidence increases with respect to shaping their future strategy in the light of the information available. Further, and of significant importance, the interactive nature of the exercise educates those involved to become further knowledgeable in their technical field.

The most successful companies not only continually innovate, but they position their innovations within a framework of competitor developments. Knowledge of who their competitors are, what intellectual property they hold and, in particular, in what direction they are moving, should be fundamental to shaping a company’s internal innovation strategy and avoiding the competition, both of which in turn will underpin long term business success.

If you didn’t do it then, consider doing it now!

Look over the horizon. Speak to us to get started on establishing your own bespoke patent knowledge bank, and how to drive cost effective and predictive business outcomes.