The AQX Series: A Convergence of Internal and External Data for 360 Analytics
In the third post of our blog series, we spoke with Vincent Brault, Senior Vice President of Product and Innovation, about the importance of analytics and how new technology is helping to reshape its use in the IP industry. From internal portfolio performance insight to prosecution and competitive analysis, we learn more about how a 360 view is critical to an organization’s business decisions.
Nancy: We hear a lot of buzz about a 360 view. Can you share a bit about what that means and how it applies to IP assets?
Vincent: The concept of a 360 view is simply taking as broad and comprehensive a view of a situation as possible. We do this in our personal lives regularly and may not even realize it. Think about purchasing a new home, when we think of the investment, we need to consider internal and external data. From an internal perspective we consider our current compensation, the outlook for future earnings, our savings levels and comfort with debt. From an external view we consider the type of home, what it offers, the neighborhood it’s in, the town where it’s located, how the economy is tracking, the outlook, etc. You look at that potential investment from as many angles as possible, and make sure all data (internal and external) helps support you in the decision-making process.
When it comes to assessing an IP portfolio, a 360 view is critical to ensure the best decisions are made for the business. Let’s take patents for example – the IP executive needs to consider the patent itself, what the patent does for the business, how strong is it, where it fits within the family, if the patent family helps the business deliver its objectives, what the product/market/sales revenue picture is, etc. This is all very important and can be found within the business.
But it’s not enough. The IP executive wants to partner with other parts of the business to help drive performance. To do so they must bring insights that others don’t. If the IP executive can combine their internal view with external data that would be a true differentiator. The external data may include global IP statistics, industry insights, economic indicators, business stats, etc.
Having access to better IP analytics allows you to be able to accelerate the speed at which ideas are assessed and evaluated, making the decision process more efficient and more effective. It also allows you to manage work allocation, better understand how internal and external resources are being leveraged, and see any trends that are happening in your space.
If the IP executive can bring these elements together in a digestible format, that would be a big advantage for them.
Nancy: Given your role, you must see the types of IP analytics that businesses track and report on? Can you share some examples with us?
Vincent: Working closely with our clients, we’ve had a great chance to hear and see what’s important to them in terms of the metrics they want to review, report, and consider within their IP decisions. For example, a couple of years ago, we formed a client-driven Patent Performance Metrics Working Group to establish commonly used outside counsel performance metrics for corporations. This helped us identify that the following metrics are the most commonly used for outside counsel evaluation: insight on Allowance Rate, Pendency, Average Time to Draft and File, Average Number of Office Actions, Average Spend Per Firm/Docket, and other performance and cycle time metrics.
The beforementioned metrics are critical stats, and many clients have taken it further by developing additional sophisticated KPIs to measure outside counsel performance such as benchmarking issuance, tendency, work quality, and more. That's definitely one area where I've seen a lot of work from our clients over the past couple of years.
IP data can be very complex and difficult to understand, especially without the right tools for delivering information you need. Recently, there has been significant progress in machine learning, and technology and processing power that can help mine complex data and derive trends to better support IP strategy and next steps. Today, on Anaqua’s AQX platform we deliver information packaged in a way that’s easy to understand and see what’s happening within their world at both a macro and micro level for IP and business strategy. This is especially important when you work at the case level and need to make prompt decisions around due dates to help steer people in the right direction.
Nancy: You elaborated on the internal legal data within an organization and outside counsel performance metrics. What are some specific types of external data that an IP person should be interested in understanding better?
Vincent: To enhance portfolio management, IP executives can use analytics for external assessment on the competitive landscape, supplier performance, the technology landscape and market trends.
For example, if you look at the autonomous vehicle industry over the past five years, there has been an incredible shift in the key players. The industry started with mostly automotive companies, and now technology and insurance companies are getting involved. In order to get at this type of information, the analysis starts by asking questions that affect your business and then trying to get the answers by analyzing the data. By studying patent data and combining it with industry and economic indicators, stories start to unfold. In addition to the data, you need strong query functionality and easy-to-understand reporting tools (e.g. dashboards, charts, tables). The ability to automatically classify third-party patents leveraging your own taxonomy is particularly powerful, as it allows you to efficiently compare apples to apples. Clustering tools, heatmaps and AI that detects statistical deviations and trends have also had a huge impact on IP-owning businesses.
Other important external IP-related information is having the ability to identify filing rates, abandonment trades, knowing who is investing and divesting, and being able to keep track of and monitor new areas of importance. For example, if you see several players in your industry investing significantly in one area, you might need to develop your portfolio in that space as well.
Nancy: How could a more disciplined use of analytics help deliver and drive ROI?
Vincent: Typically, what we see across our customers are analytics related to funding decisions. IP is expensive. Being able to invest in the right area and make better decisions will have a significant impact on the IP budget. The focus is at the IP spend level.
The bigger ROI insight an IP executive can make is around how IP impacts innovation and competitive positioning. Back to the automotive example, understanding where the industry is going technology-wise (i.e. via patent filings) and which companies are filing what (i.e. competitively) enables the IP executive to bring new knowledge and new insights. When organizations better understand the movement of traditional competitors and actions of new entrants, they will be in a position to have freedom to operate and design, and possibly achieve an exclusive position within a specific area. You want to make sure that you steer the innovation of your organization in the right area, that it's not just for today, but for the years to come, setting the organization up for success.
If I had to sum up everything, I would say that smart use of analytics can help IP departments develop a competitive advantage by establishing a strong offensive and defensive IP portfolio. It can also help IP teams receive higher issuance rates and a reduced number of office actions by leveraging data-informed decisions before patent prosecution. They can also prune and monetize the organization’s IP portfolio by having internal and external analytics for enhanced insight and comparison. Lastly, they can select, evaluate and manage outside counsel – increasing clarity into outside counsel performance and service levels can enable fact-based discussions on individual firms versus peer group performance and cost.
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