Inside the Patent Factory E-Book

Donal O'Connell

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 350

Veröffentlichungsjahr: 2011

Beschreibung

The book is a coaching guide for anyone interested in intellectual property and those wanting to embark on or develop patent creation. It draws on the authors' extensive experience and insights from change projects, management and leadership at Nokia. The book guides the reader through each stage of setting up a successful unit, inviting active involvement by asking vital questions about their needs and aims. Focusing on key issues and themes involved, it provides examples, diagrams and models to illustrate how they can be out in to practice. Critical chapters include the core activities of patent creation, possible organisational models, costs, quality and the comparison of external and internal allocation of tasks. Discussion concentrates on how to such define roles and responsibilities and the management techniques of external resources. The book encourages the reader to challenge their current organisational structure and strategy by introducing various methods and tactics that can be deployed when considering patent creation, then offering advice into the pros and cons of techniques and how such methods can be assessed. The book highlights how knowledge and innovation can be utilised and protected, which due to the increased importance of intellectual property rights, especially the use of patents, is essential for every business.

Leseprobe

Table of Contents

Title Page

Copyright Page

Dedication

Foreword

Preface

Acknowledgements

Chapter 1 - Introduction

Introduction

Why ‘Inside the Patent Factory’?

What questions does the book intend to answer?

Who is the target audience for this book?

Why have I written this book?

Patent creation explained

Multiple regimes of intellectual property protection

A somewhat unique factory

The structure of the book

Chapter 2 - Building a strategy

Introduction

Strategy explained

Getting started

Format of a strategy

Developing a strategy

Validate and test your strategy

The characteristics of a good strategy

Monitoring and reviewing your strategy

Summary

Chapter 3 - Why patent?

What is a patent?

A brief history of patents

Reasons to patent

Starting with an invention

Some facts and figures

Summary

Chapter 4 - Invention harvesting

Introduction

What is innovation?

A culture of innovation

Harvesting inventions

Summary

Chapter 5 - Core activities of patent creation

A national application - the UK

Key differences between the UK and US systems

A regional application – the EPC

An ‘international’ application - the PCT

Summary

References

Chapter 6 - The inventor community

Introduction

Categorising the inventor community

Rating these inventor community sub-groups

Working with inventors inside the company or organisation

Working with inventors external to your company or organisation

Understanding inventors

Recognising and rewarding inventors

PULL versus PUSH modes of operation

Appreciate your inventor community

Chapter 7 - Other key interfaces

Introduction

Senior management

The ‘other half’ of IPR

Business and technology management

External Patent Agencies and other IP organisations

Summary

Chapter 8 - Organising your patent factory

Key factors to consider

Organisational models to consider

Organisational change

Summary

Chapter 9 - The management of External Patent Agencies

Who are the External Patent Agencies and what services do they provide?

Why subcontract?

What work can be subcontracted?

Challenges in subcontracting

Cooperation with External Patent Agencies

Key principles regarding agreements with External Patent Agencies

Example of a pricing model for External Patent Agency work

Managing the External Patent Agencies

What is expected from you?

Associations for External Patent Agencies

Outsourcing the management of the payment of annuity fees

What can go wrong?

Summary

Chapter 10 - Metrics

Introduction

Definition of metrics

Why are metrics important?

Elements that can be measured

Specific metrics

External metrics

Setting metrics for others

Summary

Chapter 11 - Quality

Introduction

Definition of quality

Patent quality

The quality debate in the patent world

Quality guidelines

Organisation quality

Improving quality

Summary

Chapter 12 - Patent cost management

Patent cost management

The patent cost curve

Official patent office fees

Patent attorney fees

Keeping track of your patent costs

Hints and tips to help keep your patent costs under control

Costs versus value

Summary

Chapter 13 - Processes and tools

Processes and tools

Operational modelling/process definition work

Patent systems, tools and services

Vendor selection

Summary

Chapter 14 - Benchmarking

Introduction

Benchmarking and the Patent Creation Factory

How to conduct a benchmarking exercise

The benchmarking exercise

My own experiences

Benchmarking a Patent Creation Factory

Summary

Chapter 15 - Changes

Introduction

European regional initiatives

Developments in the Far East

Cooperation between patent offices

Changes in US patent law

Patent initiatives by individual companies

WBCSD initiative with environmental patents

The WIPO WorldWide Academy

European Patent Office project looking at future scenarios

Summary

Chapter 16 - Conclusion

Conclusion

Patents are of importance

The factory analogy

Steps to success

Creativity and innovation

Wrap-up

References

Index

Copyright © 2008

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Library of Congress Cataloging-in-Publication Data

O’Connell, Donal, 1963-

Inside the patent factory : the essential reference for effective and efficient management of patent creation / Donal O’Connell.

p. cm.

Includes bibliographical references and index.

ISBN 978-0-470-51640-9 (cloth : alk. paper)

1. Patents. 2. Intellectual property - Management. 3. Industrial property - Management. I. Title.

T212.O26 2008

608 - dc22

2007050377

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

Typeset in 11/16pt Trump Medieval by SNP Best-set Typesetter Ltd., Hong Kong

Printed and bound in Great Britain by TJ International Ltd, Padstow, Cornwall, UK

Dedication

THIS BOOK IS DEDICATED TO EVERYONE WORKING IN Nokia’s Intellectual Property Rights team, the inventor community across Nokia for your innovation and creativity, plus all of the Patent Agencies working on our behalf around the world

“Never doubt that a small group of thoughtful, committed people can change the world. Indeed, it is the only thing that ever has.”

Unknown

Foreword

THIS IS A UNIQUE BOOK ABOUT INTELLECTUAL PROPERTY rights (IPR). The approach is new and the author, my good friend Donal O’Connell, is uniquely suited to analyse the creation of a patent portfolio based on his personal combination of experiences in product development, product creation and intellectual property. I hope that you enjoy the book and benefit from it.

My own experience in IPR stretches from the early 1980s to the present time. During this time the thinking in IPR has evolved from the casual protection of inventions, which happened to be made during development of practical products, to the current realisation that on the one hand IPR is a product in its own right and on the other hand it is possible, desirable, and in certain businesses even necessary to mass-produce such ‘IPR products’. The times of the lonely, non-professional inventor belong to the past. Currently, innovations are cultivated and invention reports harvested in strategically defined target areas.

Nevertheless, the key to all IPR is the work of the creators, innovators and inventors. Their need and zeal to create new and improve existing products not only provides raw materials for the IPR factory, but also brings benefits to humans. The wish to climb the steps of the Hierarchy of Needs is still the driving force for most inventors. It is commonly stated that all great inventions arise from greed or laziness. I beg to differ slightly, as I believe in the inventor’s internal search for satisfaction in providing better solutions, products and services. Money is of course important, but I have not seen any great differences between the productivity rates of inventors under different compensation systems. In my experience, nonmonetary recognition is as important as monetary compensation. Both are needed.

Finally, let me emphasise the need to organise and manage the Patent Creation Factory in an efficient and streamlined way. All IPR, but especially patent creation, is very expensive and the teachings in this book should help by providing the live experiences in one company. The results may not be applicable to all, but at least these experiences are practical and tested in one application.

Urho Ilmonen Chairman of the International Chamber of Commerce, Intellectual Property Commission

Preface

THE BOOK IS TO ACT AS A COACHING MANUAL FOR anyone interested in intellectual property and those wanting to embark upon or develop their Patent Creation Factory. It draws on the author’s own experience and insights from management and leadership, plus successful completion of a number of major change projects within a Patent Creation Factory unit.

The book guides the reader through each stage of setting up a successful unit and invites the reader to become actively involved by asking vital questions about their needs and aims.

Focusing on the key issues and themes involved for any Patent Creation Factory, it provides the reader with examples, diagrams and models to illustrate how theory can be put into practice. Topics include such issues as strategy development, the core activities of patent creation, key interfaces and relationships, possible organisational models and modes of operation, patent costs, patent quality, internal and external allocation of tasks and the techniques for properly managing external resources.

The book highlights how knowledge and innovation can be used and protected, which due to the increased importance of intellectual property rights, especially the use of patents, is essential in the business world. It also covers some of the changes taking place in the world of intellectual property, and how these may impact you.

The purpose is to encourage readers to challenge their own current Patent Creation Factory strategy, organisational structure and mode of operation by introducing various concepts, ideas, methods and tactics. It then offers advice and guidance on the pros and cons of the options presented and how any changes planned can be successfully implemented.

My hope is that this book really does get used - and used often - and does not just sit on the shelf after one read through.

[email protected]

Acknowledgements

THE INSIDE THE PATENT FACTORY’ PROJECT TOOK OVER two years from original idea right through to publication of the book. That period was taken up with research, phone calls, e-mails, face-to-face meetings, discussions, debate and revisions. One could argue, however, that the seed was planted for this project many years earlier when I took my first initial steps in the world of intellectual property rights and patents and found I missed having a book like this to help and guide me.

I am indeed indebted to a large number of people, several of whom should be singled out for special mention.

Tim Frain, for sparking my initial interest in the world of intellectual property and patents.

Ilkka Rahnasto, for giving me my initial opportunity to work on intellectual property matters and for trusting me to lead and manage Nokia’s Patent Creation Factory.

Sami Saru, for his great help and support in getting the project off the ground.

Jan Koeppen, Kevin Rivette, Ralph Eckardt, Harri Andersson and Tommi Kainu, for opening my eyes to the possibilities.

Amy Dixon and Morgan West, for their motivation, dedication and sense of humour as student researchers on the project. The quality of their work was first class. I could not have completed this project without them.

John O’Connell, John Samuels, Ian Johnson and Irene Bentley for reviewing various early drafts, challenging me, making suggestions and urging me forward.

Yrjo Neuvo, Urho Ilmonen, Lucy Nichols, Paul Melin, Sisko Piekkola, Thomas Wünnemann, Christian Bunke, Mark Cordy, Charles Bailey, Jay Erstling, Aino Metcalfe, Guy Gusnell, Bradley C. Wright, Shaun Sibley and Anu Chandra, for giving me the positive encouragement to really get started on the book project when I only had the basic concept in place. Their initial feedback on the book concept was most appreciated way back then and motivated me to move forward in earnest.

Anne Ruippo, Barbara Lindley, Kelly Wilcox and Nick Filler, for sharing some of their knowledge and wisdom with me in the broader area of supplier and vendor management.

Harri Poyhonen, Mikko Lintunen, Kari Syrjarinne and Heikki Korkeamaki, for the insight and reference material they provided on the subject of innovation and creativity.

Sue Harvey, for looking after me throughout the duration of this project, reviewing drafts plus organising, helping and supporting me in so many different ways. A very special thank you for the major contribution she made to this book.

Yrjo Neuvo, Anne Ruippo, John Samuels, John O’Connell, Sami Saru, Urho Ilmonen, Mika Lehtinen, Nick Filler, Timo Ruikka, Trevor Dragwidge and Ulla James, for reviewing the complete draft versions of the book and for providing excellent constructive feedback.

Anil Sinha, Omar Shoukry, Catherine Calais Regnier, Christine Wren, Mick Ralph, Vicente Aceituno, Kate Watkins, Professor Markus Reitzig, Dr Berthold Rutz and Guy Carmichael, for providing formal permissions that allowed me to re-use some copyrighted material in the book. Thank you for being so kind and responsive to my requests for help and assistance on this matter.

Marian Underweiser, Manny Schecter, Professor Beth Noveck and Professor Ronald Mann for providing me with excellent insight into the workings of various patent quality initiatives. Thank you for being so helpful on this matter.

Viv Wickham, Francesca Warren, Jo Golesworthy, Karen Weller, Natalie Garach and Michaela Fay, from John Wiley & Sons, for guiding me painlessly through the publishing process.

Liza and Shane O’Connell for their love and support, especially for those times when I was working at home on the book, interrupting our precious family time together.

1

Introduction

Introduction

If one were challenged to think about a factory, production site or plant, one would typically picture a physical entity with components and raw material being delivered in and finished goods being shipped out.

The concept of a factory may be based on the large cotton mills in England in the 1800s, Henry Ford and his innovation with mass production in the early 20th century or today’s mass customisation factories.

Inside this building, one can imagine production lines full of products, tools and test equipment. The building is busy with various activities taking place such as sorting, assembly, testing and packaging, with some of these activities being handled automatically while others are handled manually.

Now imagine walking into a large modern mass customisation factory where the material coming in one side of the factory consists not of physical components or raw materials but rather ideas, thoughts, inventions and solutions to problems, while patent applications or granted patents flow out the other side of the factory as the finished goods.

“Asset value isn’t going to be found in machinery and equipment, warehouses or real estate - it’s going to be found in patent portfolios.”

Eric Gillespie, Advancing innovations as assets in the global marketplace. FORTUNE Magazine Innovation Forum, 5 December, 2005

This analogy linking modern factories and patent production is useful for a number of reasons. It is clear that the importance of intangible assets is growing, often equalling or surpassing the value of physical assets for a company. The state of the intellectual property of a company determines its share and corresponding influence on the market. The size and quality of its portfolio has a direct impact on several factors, such as the reputation of the company, the level of returns on investments and the access to the market, amongst others.

The way a company is valued has also changed considerably. In the mid-1970s, approximately 80 % of the value of a company was made up of tangible assets, with the remaining 20 % being made up of intangible assets. Today this percentage is completely reversed, with intangible assets making up 80 % of the value of the company and only 20% being made up of tangible assets.

“Intellectual capital is recognised as the most important asset of many of the world’s largest and most powerful companies; it is the foundation of the market dominance and continuing profitability of leading corporations.”

Kelvin King, founding partner of Valuation Consulting

The volume of patent applications and granted patents has been increasing in recent years. As companies begin to realise the importance of intellectual property rights (IPR) in the modern business environment, it is unsurprising that this pattern has emerged. Indeed, companies are afraid that failure to evolve in correspondence with today’s business climate will result in their competitors dominating the market in future.

The World Intellectual Property Office (WIPO) Patent Report, 2007 Edition (available at http://www.wipo.int/ipstats/en/statistics/patents/patent_report_2007.html), shows that worldwide filings of patent applications have grown at an average annual rate of 4.7 %, with the highest growth rates experienced in North East Asian countries, particularly Korea and China. The report is based on 2005 figures and shows that patents granted worldwide have increased at an average annual rate of 3.6 % with some 600 000 patents granted in 2005 alone. By the end of 2005, approximately 5.6 million patents were in force worldwide.

The largest recipients of patent filings are the patent offices of Japan, the USA, China, Korea and the European Patent Office (EPO). These five offices account for 77 % of all patents filed in 2005 (a 2% increase over 2004) and represent 74% of all patents granted. With an increase of almost 33 % over 2004, the patent office of China became the third largest recipient of patent filings in 2005.

Use of the international patent system has increased markedly in recent years and although it remains highly concentrated, with 49 % of the estimated 5.6 million patents in force being owned by applicants from Japan and the USA, there is evidence of an increase in the use of the system by newly industrialising nations.

However, the patenting process is by no means simple and there are various steps or stages in the process. The patenting language and terminology is often not easily understood and can also be a relatively expensive exercise. The reason for such complexity, in particular in the application and granting stages, is to ensure that the patents that do get through are of the utmost quality and provide protection only to the extent necessary.

Therefore, in today’s highly competitive environment it is essential that we take a detailed look at how we go about producing these patents.

If one is concerned only with a few patents, one can probably stay with the individual handcrafted approach. However, as volumes increase it is better to compare and contrast how such patent creation activities are organised and structured to today’s mass customisation operations and logistics, in order to then create and manage a patent portfolio.

“Leaders must encourage their organisations to dance to forms of music yet to be heard.”

Warren G. Bennis

This book is about the successful management and leadership of a patent factory and considers the organisational structure and mode of operation required. This involves providing clear direction and meaningful vision to all parts of an organisation, and deploying and controlling resources, be they people, money, and physical or intangible assets. Drawing from my experience and insights, this book guides readers along the path, providing advice about how best to arrange the human resources available to optimise the effectiveness and efficiency of the organisation. It then looks at which tasks are best conducted internally as opposed to outsourcing and what sort of organisation structures and formats work best. Decisions then need to be made on the key processes and the necessary tools to put in place.

This book highlights the key issues for consideration, the options available, the decision-making process and the opportunities and challenges that exist at each stage of this journey towards setting up a successful patent factory. In order to embark upon this journey you must ensure that you have the passion, determination and persistence in order to create a successful organisation.

Throughout this book, I will refer to this factory as a Patent Creation Factory.

Why ‘Inside the Patent Factory’?

The title of the book ‘Inside the Patent Factory’ obviously comes from the analogy painted above.

The factory analogy stems from the idea that patent creation should not be seen as some simple legal process but rather that it should be seen as a core activity of ‘creating’ patents, just like a factory creating products.

The basic idea is that if you wish to create patents as effectively as possible, you should then see the process like a factory production line, in which the end result is the granted patent. You should treat patent creation in much the same way that you would handle product development and granted patents just as you would handle a finished product.

However, it is important to realise that just as with modern factories, not all the tasks and activities are handled internally by the factory’s own employees or even by the key suppliers and component vendors. Some tasks are outsourced to specialists.

“Companies are now treating intellectual property as a business asset not very different from a product on a shelf.”

Ken Cukier, The Patent Survey, The Economist, Oct 2005

In this book, I will look at a number of critical success factors for this patent factory, starting with the overall goals and objectives of the factory followed by the organisational structure and mode of operation. Cost and quality management, internal versus outsourced activities and the flow of raw materials into the factory are all vital elements to consider.

What questions does the book intend to answer?

I examine the key issues that any organisation interested in creating patents should consider and what options are available in terms of organisational structure and mode of operation. What are the factors to consider when making fundamental decisions about how to organise, structure and operate an organisation to create patents? I also look at some of the challenges that are likely to be faced along the way, such as deciding upon the correct metrics to use when managing and leading an organisation to create patents.

Who is the target audience for this book?

This book should be of use to anyone interested in IPR, more specifically those interested in how to organise and structure people and processes to ensure that the patent creation part operates effectively and efficiently. As I myself researched and drafted this book, I reached out to many people from different backgrounds and experiences and not just those linked directly to Patent Creation Factory type activities. I found surprisingly strong interest in this subject matter across a quite diverse group of individuals, including the following:

• company managers interested in IPR and patent creation;

• IPR professionals within companies;

• External Patent Agencies filing and prosecuting cases on behalf of a Patent Creation Factory;

• functional managers with links to patent creation such as Human Resources, Finance and Quality;

• those involved in corporate strategy and strategy development;

• research and development managers interested in the subject of IPR and patents;

• investors interested in the intangible assets of companies;

• merger and acquisitions experts interested in the intangible assets of companies;

• the inventor community;

• students of business management;

• students of law and especially of IPR and patents.

Readers will gain a sound and detailed understanding of the workings of a Patent Creation Factory and its immediate environment. I describe everything from the point of view of a layperson so that the often confusing intellectual property concepts begin to appear relatively clear. Quotations from reputable sources are used to emphasise the significance of the text and case studies are provided to highlight specific issues. Moreover, analogies are used where it is felt that readers may struggle on first glance to come to terms with certain aspects. Ultimately, you need look no further to find a clear, yet detailed, account concerning the ‘ins and outs’ of what I term the Patent Creation Factory.

Why have I written this book?

This book is based on my own experiences of managing and leading one such Patent Creation Factory and taking it through some dramatic organisational changes, including the removal of the matrix structure, a shift from site to technology focus, putting External Patent Agency management in place and conducting a major benchmarking exercise.

My primary responsibility has been in the management and leadership of a Patent Creation Factory.

I spent time and energy examining our organisational structure and mode of operation, reviewing various options and benchmarking our organisation against other companies and IPR organisations. I have also examined the interface to other parts of IPR, to the inventor community, to External Patent Agencies and to other parts of the company.

I very much wish to document what I have gained from these experiences and to share my learning and insight with those who may find it beneficial. I have also read many IPR books already published but believe that few, if any, concentrate on the organisational structure and mode of operation of the Patent Creation part of IPR.

Encouragement to write this book came from discussions with many IPR professionals and business and technology managers, because many are thinking about how to restructure or reorganise their IPR departments but do not know how. Therefore, there is a clear need for the book.

IPR is becoming more and more important to a company’s success and it is crucial that the patent creation part of IPR is well organised and has an efficient and effective mode of operation.

There are still some things to learn about how best to manage and lead a Patent Creation Factory and I will continue to learn and develop and no doubt make some mistakes along the way. I hope that the writing of this book marks a key milestone on my learning journey and that this book also helps readers as they progress along their own learning journey.

Patent creation explained

The word ‘creation’ is very meaningful in this context because the basic idea is to really ‘create’ patents, as opposed to just drafting legal documents and filing them to relevant patent offices. Patent creation should not be seen as a bureaucratic activity, concerned only with the formalities of the process, but as much more than this: it should be suitably elevated to the role of a ‘factory’ at the heart of a company’s IPR activities.

Patent creation is the activity within IPR that involves interfacing to the inventor community, gathering inventions, analysing them, making decisions and then filing and prosecuting cases. It can be seen as a virtual factory, producing quality patents at the end of the production line for others in IPR to utilise.

However, it is not an isolated factory disconnected from the rest of IPR and the company or the business environment, it is a factory well connected to those developing strategies. Actively linked to the inventor community, it takes pride in raising awareness of IPR throughout the company and continuously grows and develops its people, processes and tools. Furthermore, it does the basics well, such as harvesting inventions, reviewing those inventions and filing and prosecuting those considered of value, ultimately to obtain good quality granted patents.

The leader and manager of this Patent Creation Factory formulates a long-term strategy for the factory on the basis of the overall IPR strategy and the overall company strategy. This person then identifies competencies needed to achieve the strategic objectives and targets and ensures team and individual targets are in line with the strategic objectives of the factory. He or she actively monitors the source, volume and quality of the raw material (inventions) coming into the factory and participates in factory process and tool development, while managing the budget in a professional business manner. This process will ultimately ensure the quality of the patents produced within the factory.

Patent creation clearly involves an array of activities that you need to be aware of with the overall objective being to create good quality patents, hence the term ‘patent creation’.

Multiple regimes of intellectual property protection

It is most important to realise that multiple regimes of intellectual property protection exist. Although this book concentrates solely on patents and not on other elements of IPR such as trademarks, designs, domain names, copyright, etc., these other rights remain important and warrant some definition (see Table 1.1). It is also important to take a holistic view of IPR, and to realise that the premeditated use of multiple intellectual property regimes can help achieve sustainable differentiation.

These rights differ substantially in many ways, and the rules applicable are different. It is therefore not fitting for them to be discussed here as many other books are available on these other rights. However, what must be kept in mind is that patents are just one of the many rights that exist to protect intangible assets and thus IPR, more than ever before, is essential in today’s market economy.

“If this business were split up, I would give you the land and bricks and mortar, and I would take the brands and trade marks, and I would fare better than you.”

John Stuart, Chairman of Quaker (c. 1900)

Table 1.1 The multiple regimes of intellectual property rights

PatentsA patent protects an invention. It gives the holder an exclusive right to prevent others from selling, making and using the patented invention for a certain period (typically 20 years from filing date).CopyrightCopyright protects the expression of literary or artistic work. Protection arises automatically giving the holder the exclusive right to control reproduction or adaptation.TrademarksA trademark is a distinctive sign that is used to distinguish the products or services of one business from others. A trademark is closely linked to brand.DesignThe design protects the form of appearance, style or design of an object. It does not protect the functionality.Utility modelsA utility model is an intellectual property right to protect inventions. This right is available in a number of national legislations. It is very similar to the patent, but usually has a shorter term (often 6 or 10 years) and less stringent patentability requirements.Semi-conductor topography (‘silicone chips’)This protects two or three-dimensional layout or topography of an integrated circuit. It is somewhat similar to copyright.Database rightsDatabase right prevents copying of substantial parts of a database. However, unlike copyright the protection is not over the form of expression of information but of the information itself. In many other respects, database right is similar to copyright.Trade secretsA trade secret is a formula, practice, process, design, instrument, pattern or compilation of information used by a business to obtain an advantage over competitors or customers. Trade secrets are by definition not disclosed to the world at large.

A somewhat unique factory

This chapter sets the scene of the book. If you wish to have patenting activities, you should consider how to create patents effectively and efficiently by forming a Patent Creation Factory.

However, although the analogy of a factory explains the patent creation process, one must appreciate the unique nature of patents and the inevitable exceptions that come with applying such an analogy. Some aspects of the factory analogy may not be so obvious to some readers, or may indeed even cause confusion, and so I clarify below a few aspects of the analogy.

• Patents can cover a wide range of topics and each patent is different, whereas a factory often produces the same product repeatedly. The goal of most factories is to increase production while lowering costs. However, a patent factory must foster innovation and quality should almost certainly be more important than quantity.

• Factories can be automated (the same inputs at one end produce the same outputs at the other), but with patents, if you take the same set of ideas, expertise and knowledge you do not necessarily get the same patents as output.

• The patent process must also tolerate ‘rejects’. Not every idea will become a valuable patent; some ideas may already have been patented, others may not be sufficiently original, etc. In contrast, factories are measured on their efficiency, with the aim of eliminating all waste (i.e., no faulty products) and by constantly testing and measuring the output from the production line.

Overall, the concept of a patent factory accurately portrays the need for an effective and efficient procedure in order to maximise a company or organisations gain when creating a patent or more importantly building a patent portfolio.

The structure of the book

The book begins by stressing the need for a strategic plan to help direct the long-term operation of the Patent Creation Factory. It then addresses some basic fundamentals that are key to the success of any such factory, namely understanding why patents can be of importance and of value to you, an appreciation of innovation and the need to harvest inventions, and the need to know the ins and outs of the actual patenting process. The book then moves to discussing in depth the key external interfaces such as the inventor community, senior management, the External Patent Agencies and so forth, as no factory can work in isolation. Various organisational models and modes of operation for the Patent Creation Factory are then examined with specific detailed information supplied on the management of the relationship with External Patent Agencies. This is followed by a number of chapters related to metrics, with special emphasis on quality and costs. Factory processes and tools are then discussed, before the book prompts the reader to look outside the factory, using benchmarking against others as well as examining major changes taking place in the patent world.

2

Building a strategy

Introduction

This chapter invites you to consider your own patent needs and asks some key questions to prompt you to initiate or further develop your strategy relating to patent creation. I want to force you to think about your own needs, your current situation regarding intellectual property and what you want your patent portfolio to be like in the future. Key questions relating to strategy, objectives and aims are asked in order to help you to create and improve a patent creation strategy. The questions guide you through the subject and provide answers and examples along the way about the theory of strategy and how it is critical to intellectual property, and how to develop a strategy as well the key themes and issues involved. When dealing with intellectual property and patent creation management, it is critical to think strategically about this subject matter.

“2006 marks the first year of the 11th Chinese five-year plan. The focus of this plan is to foster independent innovation and build an innovation-oriented country. Intellectual property (IP) rights form a central plank in this transition from a manufacturing to innovation-based economy.”

From “World Economic Forum on China Business Summit 2006”

To ensure that your intellectual property strategy is an excellent strategy in the future, the book will give you exemplary questions and hints to help you analyse your current situation and to see and predict possible changes happening in the future with your business environment. I invite you to consider some key questions that are relevant when creating, implementing and further developing an intellectual property strategy and I will guide and assist you to create and shape your intellectual property strategy to be aligned with the overall company strategy. The purpose of this chapter is to ask if you know where you are and where you want to be in the future and it should prompt you to think about strategic issues.

Strategy explained

“Strategy is a plan you adopt in order to get something done.”

Collins Cobuild English Language Dictionary

One may think that strategy is something theoretical or impractical, but in general this is not the case and it is certainly not the case with intellectual property. Just like in a factory, there needs to be a plan that is followed when deciding what to produce and when. Similarly, every company should have a plan for the company’s activities and this should always include intellectual property activities.

Every strategy is, and should be, unique and different, since business needs, business environments and company resources and targets are also unique. Good strategy takes into account the current situation and the needs and targets, but it should be especially created to ensure that the company can be successful in the future and in a changing environment.

“The essence of strategy is choosing to perform activities differently than rivals do ... a company can out perform rivals only if it can establish a difference that it can preserve.”

From Michael Porter’s What is Strategy

It is critical that one thinks strategically when dealing with intellectual property and patent creation management, because patent creation cannot operate in tactical short-term mode. A strategy is a long-term plan designed to achieve a particular objective or level of success. Strategy differs from tactical planning or immediate actions with resources at hand. It was originally associated with military matters, but the word strategy has become commonly used in many fields, for example business and corporate strategy.

When talking about strategy, it is worth clarifying some of the phrases and terms often used (Table 2.1).

Table 2.1 Phrases and terms used in strategy creation

VisionPaints a clear picture of your environment at the end of your strategic time frameCurrent stateDefines your position in terms of strengths, weaknesses, opportunities and threats at the present timeStrategyYour long-term plan of campaign to achieve a particular goal or objectiveMission statementDefines how this plan will be achievedStrategic intentDefines where you wish to be at the end of the strategic time periodStrategic actionsDefines the top level actions you plan to take, in order to move from where you are today to where you wish to be at the end of your strategic time frameStrategic reviewsDefines how you plan to review your progress as you move alongMetricsDefines the measures you plan to put in place to monitor your progressValuesDefines the culture and mode of behaviour

For a more expansive explanation on strategy, I refer you to the book The Art of War. Although this is an ancient military handbook, it is in such an environment that the origins of strategy can be found. In the 6th century BC, Sun Tzu wrote this classic book of military strategy based on Chinese warfare and military thought. It is one of the oldest books on military strategy in the world and had a huge influence on Eastern and Western military thinking, business tactics and beyond. Like a work of science, much of the book is dedicated to explaining its concepts as a series of formulas.

Sun Tzu was the first to recognise the importance of positioning in strategy and that position is affected both by objective conditions in the physical environment plus the subjective opinions of competitors in that environment. He taught that strategy was not planning in the sense of working through a to-do list, but instead it requires appropriate, quick responses to changing conditions. Planning works best in a controlled environment, but in a competitive environment you will find that competing plans collide, therefore creating situations that no one can foresee.

Getting started

There are many approaches to strategic planning but typically a three-phase approach may be taken:

• Current state: an analysis of where you are today and how it came about.

• Ideal state: a clearly defined statement of intent stating where you wish to be at the end of the strategic period.

• Strategic actions: a course to plot on how to get from where you are today to where you wish to be at the end of the strategic time period.

When developing strategies, an analysis of the current state, such as the organisation structure, mode of operation, skills and competencies is needed, as well as its processes and tools, financial situation and environment. Customer focus is also very important. The analysis has to be conducted in an honest and thorough fashion so as to identify strengths, weaknesses, opportunities and threats.

The ideal state may sometimes be defined by means of a mission statement or a vision statement, but it is important that these two statements should not be confused with one another as many people mistake a vision statement for a mission statement. A vision statement should describe the future identity, whereas a mission statement should describe how that identity is to be achieved. A mission statement may further define the purpose or broader goal for being in existence or in business and it serves as an ongoing guide without a time frame. The mission statement, if crafted well, can remain the same for many years! Vision is more specific in terms of an objective and future state and the vision is related to some form of achievement if successful.