Data changes everything

• Risk assessments will be improved by access to and analysis of patent data
• There is great scope to improve data on patent portfolios
• Technology such as blockchain will make patent data more available and transparent

“Data changes everything in terms of how we think about risk,” remarks one in-house counsel. As one service provider adds: “How do you launch a product in five geographies where there are 200,000 patent families? You can’t possibly do that manually!”

The next few years will therefore see more and better efforts to compile and analyse data on patents, transactions and other IP assets. Some of these will be driven by existing providers, which have big databases and networks of clients, but many will come from start-ups using innovative technology and backed by venture capital funding. A few of these start-ups are profiled in the box below.

There are many areas where patent data can be improved, including the following:

• Ownership – a large number of patents are effectively in disguise, either deliberately or as a result of complex ownership histories.
• Patent families – due to language, cultural and legal differences, it is not always as easy as it should be to identify related patents in different jurisdictions.
• Scope of protection – one of the tenets of the patent system is that a patent discloses an invention, but ever-more complex technology, combined with jargon and language challenges, mean that this is not always delivered in practice. And of course the scope of a patent is not really known until it is tested in court.
• Transactions – many licensing and other agreements are confidential – often deliberately so to protect parties’ negotiating positions. But they can be highly valuable in assessing patent value and drafting comparable deals. The higher profile of intellectual property may lead to more data being revealed in public announcements as well as in litigation (eg, over SEPs).
• Disputes – even though judgments are public, many are not accessible (eg, due to language or court resources). Companies such as Darts-IP and Lex Machina are investing in more comprehensive case databases, which can be analysed to reveal trends and precedents.

Making data available on these and other aspects of patent strategy will enable and encourage both the development and exploitation of IP assets. “The IP market is going to go transactional. Intangibles represent a huge percentage of corporate balance sheets, but only a tiny proportion of patents are ever transacted,” says one service provider. More data will also, as one interviewee puts it, “promote transparency in the IP system”. “Better data feeds back into licensing litigation and prosecution,” comments another provider. “We see a lot more use of historic reverse-engineering data on patent quality asking: where is the innovation?”

Not everyone will welcome this; many companies choose to disguise the assignee of a patent application and licences are mostly confidential for good commercial reasons. But many providers believe the momentum will be unstoppable. “Some companies hide the assignee but AI fixes that: you won’t be able to hide it,” says one. “Without comparable licences, everyone’s going around in a fog. That has to change,” contends another. The effect will be that companies which compile unique data will become much more valuable to clients.

Pressure to disclose data on IP-related matters will come from independent compilers of data, which will use tools to track down and decode information on, say, patent ownership. It will also come from clients, particularly in technology companies, where a new generation of engineers and programmers are more likely to believe that information should roam free and unconstrained. Finally, there may also be an impact from greater disclosure in other fields – call it the ‘#metoo’ effect – which will make previously confidential documents, including non-disclosure agreements, unenforceable.

Blockchain may also have an impact, if it takes off in the patent area. “Patent office data is messy and needs cleaning. Blockchain will change that. It will drive standardisation of formats and datasets,” predicts one entrepreneur. Could blockchain even replace patent rights? The head of one servicer provider says: “As with bitcoin, it will be a political choice whether it happens – you will need a national or global decision to put everything in blockchain rather than patent offices. If it’s used smartly, it could at least help in certain things, such as administering proof of transactions.”