“OMG. How’d They Get a Patent on a Thing Like That?”
I have been asked this question hundreds of times. You can probably guess that the person doing the asking has just been accused of patent infringement. What you probably can’t guess is that the person doing the asking either doesn’t know that much about patents, or doesn’t have a very effective patent program at his company.
This article imparts actionable knowledge about using patents to help your business gain market share and pricing power. I’ve represented companies of all sizes for nearly 30 years on patent issues. An inventor myself, I have licensed my own patents to companies around the world for millions of dollars. Here is my guide to obtaining valuable patents.
Realize that Patents are about Market, Not Technology
Valuable patents are primarily market weapons. Properly understood, patents have little to do with technology. Patents are fences erected to keep competitors out of your market space. The key is to carefully circumscribe the market space in which you want to be the only company to operate. Protecting that market space is what patents are about.
Many companies do not operate in a technology centric market. But they still obtain valuable patents. Patents are market weapons, not technology weapons. It’s almost axiomatic that companies with great technology often fail. They may have great products, but if the patents they own are focused on their technology instead of their market space, the patents will be of little competitive use to the company. The fence won’t keep competitors out. The companies’ products, or suitable facsimiles, will be made by a competitor, probably at lower cost, keen to operate in the same market space. Valuable patents protect market space, not technology or even products.
Research your Market and Competitors
Start by identifying your major competitors. What is their market share? What feature(s) do they promote to potential customers? How have they positioned themselves in the market? Who are their customers? Suppliers? Channels of distribution? What are their costs and margins? How much do they spend on R&D? Product development? What trade shows do they attend?
The list of questions is long, but all the information is available on the Internet organized into an instantly searchable index by Google. User manuals for virtual any company’s products are readily downloadable. Everything you need to thoroughly research your market and competitors is at your finger tips everywhere and all the time. Use it.
When Apple set out to develop its iconic iPhone in about 2004, it would have researched the market leading BlackBerry Quartz. Introduced in 2003, the Quartz boasted push email, secure messaging, a physical keyboard, a click-wheel, and a 160 x 100 pixel black-and-white LCD screen. TIME Magazine subsequently named the Quartz one of the 50 most influential gadgets of all time. How should Apple position itself against the market leader?
Apple was starting from scratch. But if you already offer a product/service in the market, where does your company fit on the matrix of information about your competitors? How is your product or service offering different from your competitors? Once you have a good honest assessment of where your company sits in the market, it’s time to plan the market space where you would like your company to operate. That is the market space you want to control with your patent filings. It’s where you want to build the fence to keep competitors out. If you are thoughtful about your business strategy and build a good fence your market share will grow and you will achieve pricing power by keeping competitors out of you market space.
Build a 10 Year Business Strategy
Develop a clear vision about what market space you want your business to occupy in 10 years. This is the time horizon patents can help with. Intermediate goals are useful as well, but 10 years is the time frame you need to focus on to get the most value from your patent activity. What features and benefits will distinguish your product or service in the market and drive sales in 10 years?
Patents last 20 years. But no one knows what technology their products will incorporate even a few years into the future, let alone 10 years. Returning to the Blackberry Quartz, patents filed to protect its physical configuration of a keyboard and click wheel are of no value against the first iPhone which was released in 2007.
The first iPhone was directed to a different market space than the Quartz. It included no physical keyboard and no click-wheel. It did include a camera, touchscreen, WiFi connectivity, a music player, and color graphics (480 x 360 pixels in 256 colors). Patents directed to Quartz’ push email and secure messaging features, as opposed to its physical configuration, had a much better chance of retaining relevance to the iPhone but they were owned largely by companies other than Blackberry.
Deleting the keyboard and including a touchscreen with magic keyboard seemed like radical choices at the time, but — importantly — Apple had clearly staked out its market space in the mobile phone market. And many of the individual features it chose had a synergy when used together. The touch screen allowed display of much higher quality images taken right on the device. WiFi connectivity allowed faster and less expensive transmission of images and music.
Go Invention Hunting
I coined the term “Invention Hunting” because it reinforces the fact that anyone can invent. Inventing can be taught, and it should be taught in your company. The act of invention is not a passive pursuit. Inventors don’t just ruminate until struck with lightning bolts of genius. They don’t have proverbial light bulbs go off in their head. Inventors don’t need to be geniuses. Inventors only need to have energy and know where to look. The place to hunt inventions is in the market space your business wishes to occupy in 10 years. Patents on these inventions will have intrinsic value because they inherently protect your business strategy.
Invention is a collaboration between your marketing and product development staff. Technical sales and customer support staff can also provide valuable input. All of these parts of your company should develop a list of customer complaints, and feature wish lists for your product or service. What do customers like about your product/service, and what feature(s) do they wish it had? Solving these problems and providing these features is also inventing.
No question Apple carefully studied the BlackBerry Quartz before they staked out their market space: camera, color graphics, touchscreen and WiFi. Next they focused on the technologies that could provide the feature set they had identified. How to pack a desktop monitor’s worth of screen resolution in a pocket-sized phone? And all this on a touchscreen with a magical keyboard that pops up when needed. How do you operate the iPhone without the many keys and buttons found on the BlackBerry? How do you combine WiFi and cellular connectivity in a single device?
The touchscreen construction, in particular, likely required conquering many technological hurdles. Beyond technology, the iPhone accelerated User Experience design or UX. UX concerns defining how gestures are unambiguously interpreted by the device. For example, the touchscreen had to interpret new kinds of interactions that went well beyond simple point and touch selection. Touches such as single finger swipes eg to unlock the device and multi-finger gestures such as pinch to zoom also had to be interpreted by the screen. This UX language was very important to the iPhone market space because any mobile phone with a touchscreen would be dependent upon it. Not coincidently, Apple’s patent strategy included protecting its UX.
If Apple could put a patent fence around its UX, it could force competitors to adopt a new UX language which would befuddle customers and thereby discourage them from switching to competitive products.
Call in the Patent Attorney
The rules and laws applicable to patents are extremely complex. Nonetheless, the job is made much easier and result likely to be much more valuable to the owner once the above three steps are completed. The patent attorney’s job is to build a word fence around the inventions identified in the market space of interest for the company’s goods or services. Once the patent attorney understands the market space and business strategy which gave rise to the invention, she is much more likely to build an effective word fence. Information about the competitor’s product and features can also be important so the word fence can be built right up close to these known products, making it much more difficult if not impossible for the competitor to innovate.
A patent Apple filed for UX on its new iPhone is instructive. Reproduced below are elements of a claim from US Patent № 7,657,849 filed in 2005 and entitled “Unlocking A Device By Performing Gestures On An Unlock Image”:
displaying an unlock image on the touch-sensitive display while the device is in a user-interface lock state, wherein the unlock image is a graphical, interactive user-interface object with which a user interacts in order to unlock the device;
detecting contact with the touch-sensitive display; and
transitioning the device to a user-interface unlock state if the detected contact corresponds to moving the unlock image across the touch-sensitive display according to a predefined displayed path on the touch-sensitive display; and
maintaining the device in the user-interface lock state if the detected contact does not correspond to moving the unlock image across the touch-sensitive display according to the predefined displayed path.
The related patent figures give meaning to the claim elements and illustrate how simple the patent really is, and how precisely it is aimed at Apple’s intended market space for the iPhone.
A properly focused patent program won’t help you sell products, but it will help you protect your market space if your product is successful. Apple successfully enforced this UX patent against HTC mobile phones using Google’s Android operating system. This and other patents have certainly helped Apple grow its market share, and improve its pricing power.
As a final point, it’s important to understand that the process outlined in this article is iterative. In other words, with each new iPhone the same steps were followed and new patents filed as Apple’s market space was redefined and features were added to its product.
If this seems like an excessive amount of effort to put into your patent program, it shouldn’t. Patents are expensive but can be invaluable to your business if properly implemented. I have given this same advice to all my clients, and used it with my own patents as well. At Whitmyer IP Group, we are committed to solving IP problems in a creative and cost-effective manner. Our clients come to us for our superior technical and legal know-how and we leverage our skills with advanced cloud-based technology to obtain quality results.