Lean invention harvesting in emerging technologies

New technologies form tangible assets that can be systematically developed by technology-oriented companies for a particular market in order to generate revenue. However, recent IP transactions (eg, in the telecoms market) clearly demonstrate that intangible assets may also significantly contribute to revenues.

Inventing in traditional technology fields

Traditionally, technology development is based on an incremental innovation in order to, for instance, improve an already existing product. An example of such an incremental technology development is the continuous improvement of the combustion engine since its introduction by Nikolaus August Otto in 1892.

Incremental innovation, and thus incremental technology development, aim to improve existing technology that is typically well known to the engineers, who are well educated and experienced in developing tangible assets. However, engineers are not usually trained to systematically develop intangible assets such as inventions. Therefore, in traditional technologies, inventions happen as a by-product of a technology development, rather than being systematically developed. The invention process is supported by the fact that technology development is usually incremental – as are inventions in traditional technology fields.

Like incremental technology developments, incremental inventions are based on known technologies or inventions, differing from those by one or more features. In the course of incremental technology development, the engineers practise developing or at least recognising incremental inventions, but usually have no experience in systematically developing them.

However, the systematic development of inventions, and thus intangible assets, is important in order to capture the available assets, including tangible and the associated intangible assets.

When an invention is a patentable invention

In order to obtain patent protection for an invention, a patent application claiming an invention in a patent claim or at least describing the invention must be filed with a patent office. However, patent offices do not judge whether the subject matter of a patent application forms an invention. Rather, they decide whether an invention as claimed in the patent application is patentable (ie, whether it can be patented).

The difference between an invention and a patentable invention can be demonstrated. Imagine that Robinson Crusoe invented a wheel on his desert island. This wheel is certainly an invention if Crusoe had never seen a wheel before. However, it is not patentable because wheels have been known for centuries beyond Crusoe’s island.

In order to determine whether an invention is patentable, patent offices – in particular the European Patent Office (EPO) – often assume an incremental character of the invention. This is reflected by the fact that patent claims should be drafted in a two-part format (ie, with a preamble defining the known prior art and a characterising portion indicating the difference between the invention as claimed and the prior art). This difference can be considered as an increment that will delimit the claimed invention over the prior art, and is referred to by the patent offices for determining whether a claimed invention as claimed is patentable. The patent practices of the offices therefore directly reflect the incremental character of innovation.

This may work well in the case of incremental technology development. However, emerging technologies are not usually incremental, which is one of the reasons why invention harvesting and patenting in the field of emerging technologies
is challenging.

Innovation challenges in emerging technologies

One characteristic of emerging technologies is that they can be disruptive and may traverse the well-established innovation processes: there is usually no existing technology that forms a starting platform for further improvement.

Clayton M Christensen has stated that disruptive technologies are often neglected by established technology companies at the beginning of a technical development (“The innovator’s dilemma: when new technologies cause great firms to fail”, Boston MA, United States: Harvard Business School Press, 1997). This is due to the fact that technology trends, unless driven by well-established companies, often have their beginnings in less profitable market niches and are usually associated with overcoming major technical difficulties. Moreover, not every new technology trend turns into an emerging technology. Once a new technology trend turns into an emerging and potentially profitable technology, the engineers in charge of its development will be under significant time pressure to transfer that emerging technology from a niche market to a profitable market. There is usually little time left for additional innovation development. In addition, emerging technologies are mostly implemented in software, which is widely considered by engineers not to be patentable. Important innovation assets can therefore be lost at the most important technology development stage.

An example of an emerging technology is blockchain, a rather disruptive technology that is not based on the incremental development of an existing technology (blockchain-based cryptocurrencies were not developed based on traditional banknotes). Blockchain is based on a cryptographic concatenation of distributed data blocks which enables the development of countless new applications in a distributed network environment. Each new blockchain application may require the development of a new cryptographic structure, (eg, a cryptographic signature scheme adapted for a certain application, such as cryptocurrency).

The non-incremental nature of blockchain makes it difficult for engineers to recognise an invention in a given blockchain development because there is often no technical increment that can serve as an orientation anchor for engineers to systematically capture inventions in an existing blockchain development. Blockchain is implemented in software, and most engineers believe that software is generally not patentable; therefore, they often fail to realise that a specific blockchain development may involve a patentable invention. In fact, software-related inventions require specific patent drafting skills and profound experience in order to circumvent well-known software patenting problems. Patent applications will otherwise be rejected as not patent eligible, which may in turn confirm the scepticism of traditionally oriented developers regarding patenting software-related innovations. Valuable inventions, and thus intangible assets relating to blockchain, may get lost.

Another example of an emerging technology is 5G communication networks, which are designed to support emerging technologies and applications such as blockchain, the Internet of Thing (IoT) or autonomous driving.

5G communication networks are designed to provide sub-networks which are specifically implemented to support specific applications and services. For example, autonomous driving requires very low communication delays, and thus a very fast communication link to the car. A specific autonomous driving slice is therefore a specific sub-network that enables a fast and reliable communication structure – for example, for car control using a 5G network architecture. In the context of blockchain IoT applications, a 5G slice can be specifically designed to use only secure communication nodes supporting encrypted communications of considerable data amounts associated with the distributed IoT environment.

The specifically designed 5G slices allow a specific network design for countless applications. In order to implement 5G, the traditional, all-purpose network architecture will be replaced step-by-step by the service-oriented network architecture, which is also a non-iterative process. In addition, 5G communication networks are widely implemented in software, mainly because software offers the required flexibility when designing service-specific network architecture.

Therefore, the innovation challenges associated with 5G are similar to the challenges arising in connection with blockchain or any other emerging technology. The development of 5G communication networks is non-incremental, which makes developing or at least recognising 5G inventions difficult for those engineers skilled in developing traditional technologies. Moreover, the software character of 5G implementations imposes several problems associated with patenting software per se. These problems may result in the loss of essential inventions and therefore intangible assets, particularly at the beginning of a development cycle.

One factor which may prevent harvesting valuable inventions is the fact that new technologies are mostly developed in software, and there are numerous problems associated with patenting software inventions. However, software is just another technology tool that often replaces traditional technology tools that are implemented to solve technical problems. Therefore, software implementations that solve technical problems are patentable according to the EPO.

Patentability criteria of the EPO

The EPO determines whether a technical invention is patentable according to Article 52 of the European Patent Convention (EPC). Article 52(1) EPC states that: “European patents shall be granted for any inventions, in all fields of technology, provided that they are new, involve an inventive step and are susceptible of industrial application.”

A novelty of a technical invention as claimed can be determined by comparing the features of the technical invention with prior art such as published technical implementations.

In order to determine whether a technical invention also involves an inventive step, the EPO developed the problem-solution approach, as described in the EPO Guidelines for Examination, Part G VII 5:

• determine the closest prior art (eg, a patent relating to the same field of technology);
• establish the objective technical problem to be solved; and
• consider whether the claimed invention, starting from the closest prior art and the objective technical problem, would have been obvious to the skilled person.

An essential characteristic of the problem-solution approach is establishing an objective technical problem to be solved by a technical invention. In this regard, the EPO assumes an incremental character of a technical invention by deriving a technical effect based on a difference between the technical invention as claimed and prior art. The objective technical problem is simply to achieve the technical effect.

Another patentability requirement of the EPO is eligibility. Article 52(1) of the EPC requires a technical character of an invention as claimed in Article 52(2, 3) of the EPC specifies that certain inventions, such as computer programs per se, are not regarded by the EPO as patentable inventions.

The technical requirement is fulfilled if an invention involves technical means according to the landmark Decision T 0258/03 (Auction Method/HITACHI). In order to determine whether technical means are involved, a technical solution of a technical problem can be taken into account.

In order to determine whether an invention forms, for example, a computer program per se and should therefore be excluded from patentability, the principles of another EPO landmark decision, T 1173/97 (Computer program product/IBM),
can be applied, according to which a claim
directed to the use of a computer program for the solution of a technical problem cannot be excluded form patentability.

The EPO’s patentability requirements should be considered when claiming inventions, in particular software-related inventions.

Fortunately, the EPO’s essential patentability requirements – namely, inventive step, technical character and non-exclusion of patentability – can be jointly assessed by a technical solution of a technical problem that is provided by the features of the invention as claimed. This provides a framework for claiming software-related inventions in European patent applications.

The EPO patentability criteria defines a framework enabling software-related inventions in European patent applications to be claimed. However, this framework can be exploited for harvesting inventions as well.

Market need and technical problem to be solved

The essential patentability criterion is a technical solution of a technical problem by an invention as claimed in a patent application. Clearly, this applies where an existing invention has already been claimed.

However, it can also be exploited during an invention harvesting process in order to harvest valuable and (hopefully) patentable inventions. Focusing on a technical problem when harvesting inventions also simplifies the interaction with engineers during the innovation harvesting process, because a technical problem is where an engineer starts.

Ideally, the harvested inventions should be valuable and patentable. The patentability criterion provides a framework for harvesting patentable inventions. However, the question of how to systematically harvest valuable inventions remains.

A valuable invention should address a market need. An invention that satisfies a market need is more likely to be implemented in a product or infringed by a third party and therefore has potential monetary value. In contrast, an invention that is unrelated to any market need is unlikely to be implemented into a valuable product and therefore has limited value.

The market need defines a purpose of a technical invention. For example, the purpose of a cryptocurrency is to provide a digital payment scheme; the purpose of a smartphone may be internet shopping. Clearly, the purpose of an invention does not automatically define a technical problem that is solved by an invention. However, a technical invention should preferably solve a technical problem, and there is likely to be several technical problems to solve in order to develop a market-ready product serving the identified purpose.

The essential task of invention harvesting is to define a suitable technical problem that reflects EPO patent practice and that should be solved by the to-be-harvested invention in order to achieve the identified purpose of the invention. Focusing on a technical problem when harvesting inventions has two advantages:

• engineers know how to solve technical problems; and
• the EPO requires a solution of a technical problem as a patentability criterion.

Therefore, such a criterion can be implemented into the invention harvesting process from the beginning.

By way of example, in the context of blockchain technologies, the market need may be a secure cryptocurrency scheme. An exemplary technical problem is therefore to provide a secure fund transfer concept that enables a secure digital payment. A (simplified, but unfortunately not novel) technical solution to the technical problem is a digital signature process, according to which a fund transfer is authorised by the digital signature of the fund’s owner.

In the context of 5G technologies, the market need may be a communication service supporting, for example, autonomous driving. A technical problem is therefore to provide a fast communication network solution. A (simplified) technical solution to the technical problem is a dedicated 5G slice that allows direct communication in an end-to-end fashion.

Lean invention approach

The identification of a technical problem is a starting point for harvesting valuable and patentable inventions. However, the technical problem does not usually provide any hint towards its technical solution (ie, towards the technical invention).

In order to develop a technical solution to a technical problem, a lean invention approach has been developed by Patentship, based on the lean startup principles described by Eric Ries in his book The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses (17 October 2017). The lean startup approach is based on identifying a market need in order to build a valuable company. In order to satisfy the market need, a minimum viable product (MVP) can be designed, providing basic functionality. The MVP can be subject to further improvement in subsequent iterations in order to achieve a better market fit.

The lean startup approach and the innovation harvesting approach share the same starting point (ie, market need). Therefore, the principles of the lean startup can be directly exploited to systematically develop technical innovations as well. In particular, the MVP may already define a ‘minimum viable invention’ (MVI) that provides a first solution to the technical problem based on market need. The MVI can iteratively be improved further if necessary. Moreover, several concurring MVIs can be harvested, each forming another solution to a given technical problem. Therefore, the MVI approach can provide alternative solutions to the same technical problem and thus a plurality of technical inventions during the same invention harvesting process.

Comment

The market-driven invention harvesting scheme has been developed and successfully deployed by Patentship in a number of invention harvesting projects in emerging-technology fields (eg, 5G) in recent years. The considerable number of harvested, important inventions and the high grant rate of patents prove the efficiency of the systematic invention harvesting concept.