Recession: The Mother of All Innovation

By Jeffrey Magee, BSME, MBA, Nerac Analyst – Innovation IP Management

Originally Published November 3, 2022

Nerac helps its clients identify and measure innovation

Looking back at historic economic downturns, companies who commit to innovating have won in the long run. There was a significant spike in patents in the wake of the Panic and Long Depression of 1873. The Great Depression of the 1930s was far and away the most “technologically progressive decade of the 20th century,” according to the detailed research of economic historian Alexander Field, outpacing the high-tech boom of the late 20th century by a considerable margin. Regarding the 2009 crash, startup activity, as well as indexes of entrepreneurship, soared despite high-interest rates and tight cash flows. The evidence is overwhelming (read a supporting article here).

Turning to the post-Covid economy, companies grapple with rising interest rates and tight cash flow. Questions for entrepreneurs, R&D managers, and startups are: what are the right technologies to back? How do innovators quantify opportunity, value, and risk? A patent landscape and an assessment of patent portfolio value can help. Many clients express a healthy skepticism towards the merits of this type of research. Clients have shared that results typically lack usefulness and relevance to the real-world. On the other hand, it can be difficult to convert a series of independent prior art research requests into a strategic road map. Nerac offers ways to overcome the limitations and provide real results for its clients.

When performing a patent landscape, a typical client objective is to identify potential areas for technology development. This can include white space, as well as grey space opportunities. White space refers to nascent technology areas with little-to-no patent history. This may present an opportunity to develop and patent new innovations. On the flip-side, grey space represents mature technology areas where the entire patent publication field, or most of it, is expired. This can help development teams confirm that their technology doesn’t infringe on anyone else’s patent portfolio. In parallel, an assessment of innovation rank is provided to quantify the landscape. These elements are combined to help sharpen technology development strategy. But does this approach really work?

Recently, Nerac provided research services as outlined to a longstanding client. Based on analysis of the data, an emerging technology with potential white space opportunity was identified. The findings were framed in context with key competitors, and their patent publications. For another client, mature technologies were examined in a similar fashion. The objective was to identify grey space opportunities. A few technology areas were identified for product development consideration. These tangible, evidence-based examples demonstrated to Nerac’s clients how a patent landscape can help guide technology development, patenting, and freedom-to-operate (FTO) strategy.

Turning to innovation rank, Nerac has developed a methodology to assess the innovation rank for a given patent portfolio in context with the competition. Typical patent assessments include patent age, relevant litigation/ opposition, geographic coverage, non-self citations, patent family size, claim length, and country gross domestic product. Algorithms are available from various software companies to compute patent strength/ value based on these and other parameters. However, it can be unclear how the results can inform business strategy. Nerac’s Innovation Rank combines the industry best practices with real-world factors.

To start, a phase 1 innovation ranking is prepared. This assessment looks at the client’s patent portfolio in context with key competitors. The results help confirm a client’s competitive position in key technology sectors and markets. For clients seeking a more substantive assessment of technology value, a second phase of research can be provided.

In phase 2, Nerac interrogates the extent to which a technology has been de-risked. The assessment includes a review of technology validation and scalability, supply chain feasibility, and many other factors. While each aspect should be addressed prior to technology commercialization, history shows this is not always the case. Headline startups in telemedicine, as well as other industries, provide ample evidence of this phenomena. As a result, Nerac casts a wide net to quantify the efficacy of a company’s de-risking diligence. Competitor technology risk profiles are developed based on a review of trade journals, scholarly articles, market alignment, primary research (interviews with relevant companies, industry experts, etc), etc. Efforts can be focused on specific technology areas as applicable. These and other techniques enable Nerac to tie intellectual property to the real world. Automated algorithms available in the marketplace appear to lack an appreciation for this key aspect.

Circling back to the white space opportunity identified for our client, discussions are underway to investigate de-risking measures as outlined. Nerac’s long-standing client has taken the initiative during an economic downturn to strengthen their competitive edge. New opportunities have been identified that shape the company’s technology strategy. A focus on innovation, especially during economic downturns, has proven invaluable for Nerac clients, and over the arc of history. Nerac helps clients with their technology research, development, and commercialization strategies. Don’t miss the opportunity to strengthen your competitive edge!

How Can Nerac Help?

The first step Nerac takes when preparing to conduct patent landscape research is to have a detailed discussion with our client to identify the key questions they would like the report to answer. Is the report looking at the competitive landscape? Or are technology trends more of a focus? How about technology scouting for available white space opportunities? Is your company entering a new area of technology? Do you need a comprehensive picture of the intellectual property players and trends?

Once we have set the parameters for the type of questions which need to be answered, Nerac analysts design the appropriate search protocols to gather the required relevant patents. Various limitations can be put on the searches depending on the focus of the patent landscape. Typical examples include date limitations (on recent patents, or looking back to the start of the technology) and geographic limitations (U.S. only, or worldwide). Since every patent landscape report Nerac generates is customized, the focus and limitations are completely up to our clients.

Nerac’s patent landscape reports are often completed in phases … mostly because we don’t know what type of information we’re going to find until we complete the preliminary searches. A general patent landscape can be followed up with additional analysis to focus in on specific areas or technology or competitors. Taking a deeper-dive can help clients discern, for instance, where key patents are being filed and in which markets for important assignees. Furthermore, the strength of key patents can be defined through careful analysis of the full-claims language per filing country.

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