In the 19th century the Prussian military genius Carl von Clausewitz coined the term the ‘fog of war’, to describe the uncertainty commanders face in battle. Clausewitz observed that officers who could pierce this fog, who could reduce relative uncertainty, consistently defeated opponents even when outnumbered and outgunned.
This observation directly led to a massive investment in military communications and intelligence encompassing everything from radio to GPS, radar to satellites. Put simply: better intelligence about your capability relative to your adversary’s capability wins wars.
What is the relevance to intellectual property? The military battlefield is remarkably similar to the commercial battlefield companies find themselves in today. With an ever increasing focus on technology and innovation as key competitive advantages, intangible assets (including know how, brand, copyright, patents and trade secrets) are now a crucial weapon. Companies who understand their intangible assets, who correctly assess their strength relative to their competitors’, who know which areas to avoid, which to protect and which to attack, are manifestly better positioned than their opponents.
Because many forms of intangible assets must be recorded in public databases (for example patents and trademarks) IP research provides business managers a unique lens to lift the fog of war and see inside a competitor’s strategy, strength, focus and resources months and years before the battle begins.
Careful research can show that a competitor is investing heavily in R&D around a particular technology area or specific geography. It can reveal the pace and direction of technology development, what features it considers important, how it has solved certain problems and even its marketing strategy. This information is priceless to an informed company: it can enable them to avoid mines (infringement issues), to steal a march (leap frog earlier innovations), to blockade (lay in blocking intangible assets of its own), to license or enter agreements (form alliances), to make targeted attacks (litigate or issue injunctions) at critical moments or areas.
Of course the reverse is also true: a competitor can see what you are doing and apply all the same advantages in return. Hence the need for a careful and considered IP strategy about when, where and how you file intangible assets that require publication, such as patents and trademarks. It goes without saying that advice on your IP strategy should come from someone other than the person selling you the weapons!
A simple example of how powerful IP research can be: consider a company developing a new product and facing two divergent technology paths (A) and (B). Both paths will take 10 engineers 2 years to complete. Without looking at the intangible assets, management might decide which path to take solely on functionality, perceived market acceptance and a host of other factors. Putting on the IP field glasses however suddenly reveals very different terrain. Path A is heavily patented out: the chance of gaining strategic high ground is limited (building its own strong intellectual property position) and there is a high probability of infringement (hitting mines or being ambushed). With path B on the other hand the terrain is wide open: the company can develop its own strong IP, has no fear of ambush or mines and can instead turn the tables and lay traps of its own, further fortifying its position. Consider the implications of taking Path A: 20 man years of engineering time lost (perhaps $1.5M), its investments in its own patents and intangible assets are largely or completely lost (perhaps $150K), the cost of launching a product that is quickly copied or worst must be removed from the market (millions). Worst of all, the opportunity cost of going back to the beginning and missing the market as it moves (millions more). The difference between the two paths will be millions or tens of millions and this is for a relatively small project – consider a large one! This is how battles are won and lost, companies destroyed and made.
As governments have invested massively in on-the-ground, real-time military intelligence, so too businesses can invest in on-ground intellectual property information. Careful mining of IP databases can provide businesses with the ability to lift the fog and understand the technology and intangible-asset-landscape in which they find themselves. Such research can reveal priceless information such as:
· unseen competitors (those who have filed patents but yet to sell any product);
· what your competitors are up and their strategy (eg. their latest patent acquisitions or filings)
· licensing opportunities (others in the market who might want your technology or who you can license from);
· market shifts (what technology to direct your R&D budget into);
· what and where your competitor may launch next (patents are often filed in the research phase and the corresponding product may still be pre-production); and
· perhaps most importantly – whether you have Freedom to Operate (FTO) – where are the landmines? Are you infringing someone else’s intellectual property?
With the help of a skilled intangible asset strategists, a plethora of databases globally can be mined to reveal the battlefield in front of you. Careful research can mean the difference between success and failure, victory and defeat. In short, knowledge “is power.”
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