Analytics will make it easier to weed out worthless patents

• Corporate IP departments will make much more use of data analytics in day-to-day work
• Better data will mean greater speed and transparency in decision making
• Better analysis will mean more scrutiny of large IP portfolios and their value

It’s not just in R&D that data will become ubiquitous. Patent practitioners will be using a lot more data and analytics in the way they develop and measure their IP work. This includes assessing the strengths and weaknesses of your portfolio, your competitors’ portfolios, transactions, valuations and potentially many other aspects of the IP workflow. “The more data you can get, the better,” remarks one practitioner.

Tools are now being developed that will become essential for large patent owners in the future, and these are discussed in detail in our report on patent service providers. They will inevitably involve more automation and use of AI – including for tasks such as searching, valuation, discovery and probably even drafting patent applications and agreements. “The biggest change in our practice will be that AI will take off. It helps maintenance decisions, makes filing/prosecution strategy easier and assists decisions about when to litigate and what the risk is in contracts. We will see that in the next five years,” says one in-house counsel. Another compares the patent market to the baseball business before Moneyball – the assets are all there, but they are waiting for a Billy Beane to crunch the numbers and identify them: “People that provide good AI toolsets will make a lot of money.”

Of course, AI will not provide all the answers – certainly not within the next few years. “The hardest thing with respect to intellectual property is the interpretation of the data. Do I accept one term or another in a contact and what is the financial risk? No one has cracked that nut,” says one practitioner. But it will dramatically improve the visibility and speed with which decisions can be made: one in-house counsel reports that it can now take weeks to get the analysis he needs for just one small portfolio. With AI, that will be done almost instantly.

As tools enable better analysis of portfolios and more effective searching of prior art, that will have an impact on future patent strategies. One analyst predicts that it will expose the myth of the long tail:

“A whole heap of intellectual property owned by companies has no true value… The truth is too many patents are filed where a reasonable search would have pulled them up. Analytics will make it much easier to show which patents are worthless. There are very significant concentrations of power in a small number of patents.”

Combined with other trends discussed in this report, that could lead to fewer, better-quality patents: a triumph of quality over quantity.