Learn from Apple and Google to go beyond the survival during recession!

Imagine you’re Mike, the IP Counsel of a leading technology manufacturing company. With the economy slowly slipping into a recession, you must ensure that your company doesn’t sink.

This means you must protect your company’s existing IP and identify new opportunities for growth and innovation. Since you realize how important it is to invest in constant patent tracking, you take up the task without delay.

While reviewing the latest patent filings, you notice a sudden spike in patent activity in virtual reality.

Not just that, several new startups emerged during this spike, each with a unique approach to VR. You also noticed increased patent litigation in the field as these new companies began to compete for market share. You realize that this was a signal of change in the patent world and that virtual reality was a hot innovation area.

So, you immediately discuss these findings with your company’s R&D team and board of directors. Seeing the rapid growth in patent filing and emerging startups, the board gives you a heads-up to explore potential licensing and collaboration opportunities with these startups.

In addition, you re-evaluate your company’s IP strategy and R&D efforts in the VR field and create a plan to get the most out of it with your limited resources. Impressive, right?

You see, constantly tracking patents and identifying signals of change in the industry can help you stay ahead of the competition and capitalize on market opportunities.

This brings me to the heart of this article, Why identifying the signals of change is more crucial during an economic crisis? And how to identify signals of change through patent activities?

What are signals of change?

Signals of change indicate that something is changing or likely to change in a particular field or industry. Through the identification of these signals, it becomes easy to pick up opportunities and anticipate trends. In short, companies can stay ahead of their competition and capitalize on new opportunities for growth and innovation.

But why is identifying signals of change important, especially during a recession?

We understand that survival takes the front seat in economic downturns, and investing in something like constant patent tracking to pick up signals of change might seem like bleeding your company out.

On the contrary, your company can not only survive but transcend with constant patent tracking to identify change signals. Here is why!

1. Generating a Revenue Stream

The recession motivates companies to look for new revenue streams. Identifying change signals can help you find potential licensing, collaboration, and acquisition opportunities. 

You may be well aware that companies sometimes refrain from filing research papers, and their technology strategies remain hidden until tracked through patents. Therefore, if a company is involved in a consistent patent tracking activity, it can spot early-stage startups suitable for collaboration.

We mean that even during the recession, tracking the patents can help generate revenue. 

2. Preventing Litigation Threats

Since every business tries to leverage its patent portfolio, litigations increase during economic downtime. And getting twined in the litigation is the last thing you’d want for your company, right?

Therefore, to avoid becoming the next target, identifying where the litigation is increasing by patent tracking is a smart practice. This can save you from costly legal battles. 

In 2008, during the recession, Apple’s IP counsels were able to identify that the company’s major revenue source was the sale of mobile phones. By tracking the patent filings and litigation in the field of mobile technology, they were able to identify potential infringement issues and license necessary patents. This helped the company to avoid costly legal battles and to protect its IP, which was crucial to Apple’s survival during the recession.

3. Riding the growth wave that follows a recession-

You might have heard the phrase, the calm before the storm. Why am I mentioning this here? Well, in a similar manner, while innovation is limited during the recession, it is an indication that an innovation period is about to follow. While the need of the hour is to cut back the budget, the previous recession proves that R&D heads have always tried to stay informed of the happening in their field, even in times of crisis. Hence, by keeping a check on what innovation is picking up the pace, IP counsels can convey the same to the R&D team.

Further, Shikhar Sahni, Senior Vice President of GreyB, highlights, “Patent tracking also hints at the type of results that a company’s competitors have achieved at the research stage. Such results can then act as a benchmark for the inhouse R&D. For example, if competitors mentioned in the patents that the solution described in the patent can help in achieving 42% higher efficiency, then it is a good indication that something close or higher than this will give advantage in the coming time. As a result, companies can leverage this to ride the innovation wave.”

It isn’t just about one company or one industry. Several sectors have utilized signals of change in the backend and saw a boom after the recession due to timely innovation.

• The Great Depression of the 1930s led to innovation in transportation and infrastructure as the government invested heavily in constructing highways, bridges, and public works projects.
• The 2008 Financial crisis was followed by a period of innovation in the field of technology as companies sought to reduce costs and increase efficiency through automation and digitalization. New business models, such as peer-to-peer lending and crowdfunding, emerged.

All this happened because innovators envisioned the time after the economic downturn. They continued generating ideas and filing patents. 

However, an important thing to note is that it isn’t just about innovating. A lot of companies were able to ride the innovation wave by simply identifying signals of change.

So, what kind of changes should you look for in the patent world, and what would they mean for your business? Well, having a clear idea of what to identify helps shape R&D and IP strategies, which is what the next section is about.

Types of changes in the patent world and what do they signal?

Just as the changing color of leaves signals the coming of winter, the change in the pattern of patent filings signals the upcoming change in technology and market. 

But to do this, you must carefully study several changes in the patent world, and by identifying these signals, you can tweak your business strategies accordingly. Here are a few ways to easily identify some of these changes through patent tracking:

1. Change in the number of patent filings: 

A sudden increase in patent filings in a particular industry or field can indicate a new area of innovation or interest. 

For example, in the early 2000s, IBM faced declining revenue from its traditional business of selling hardware and software. As a result, the company’s IP counsels and R&D Team began tracking patent filings. They noticed an increase in the number of patent filings in the field of data analytics and cloud computing. 

Recognizing this as a significant signal of change in the industry, IBM invested in research and development in these areas. As IBM diversified its revenue streams and capitalized on new opportunities for growth during the recession, it became a leader in the field of data analytics. 

And weren’t you intrigued to read this example just because of IBM’s name? That is the impact it has created over the years by surviving the recession.

2. Changes in patent ownership: 

Changes in the ownership of patents, such as through mergers and acquisitions, can indicate shifts in the competitive landscape or a company’s strategic focus. 

Think of a major tech company acquiring patents in the field of autonomous vehicles. This signal can indicate a shift in the company’s focus toward self-driving technology.

On the other hand, if Non-practicing entities are acquiring a lot of patents for a specific technology, the signal indicates an increase in litigations.  

3. Increase in litigation: 

An increase in patent litigation indicates a high level of competition or that companies are more aggressively protecting their IP. By catching this signal, it is possible to identify potential infringement issues and take steps to address them before they become a problem. This can include licensing any necessary patents or re-evaluating the company’s R&D efforts to ensure they do not infringe on existing patents.

Muzammil Hassan, Manager and Senior Research Analyst at GreyB, shares a similar observation, “Last year, we saw a significant increase in patent litigation funding from 48% to 68%. As a result of the current economic slowdown, patents are sought to generate new revenue streams. If the economy continues to decline in 2023, this may increase even more.”

4. Changes in patent laws and regulations: 

Changes in patent laws and regulations, such as patentability criteria or term length, can significantly impact the patent landscape. For example, if the laws become more restrictive, you may find it easier to protect your inventions, and the R&D budget may reduce. 

On the contrary, a more lenient law will make R&D an attractive investment. Ultimately, changes in patent laws can greatly affect incentives and risks associated with R&D, which creates the need for businesses to adjust their strategies accordingly.

5. Increase in patent licensing and cross-licensing: 

An increase in patent licensing and cross-licensing can indicate that companies seek to monetize their IP or that there is a high level of collaboration within an industry. 

6. Increase in patent expiration, maintenance, and abandonment: 

The expiration of many patents can open up markets for new companies and increase market share for existing companies. This change signal is used by generic drug manufacturers who monitor when brand-name drugs are set to expire.

Once a patent on a brand-name drug expires, generic manufacturers can begin producing and selling their versions at a lower cost. This is known as a “generic entry.”

By now, you have been through the major sections of this article, where we discussed the types of changes, what they signal, and why identifying them is crucial. However, all this information may only be worthwhile if you know how. 

How to identify signals of change in the patent world?

As the patent world is dynamic, it can only be easy to keep up if you monitor various change signals through patent tracking. 

By closely monitoring patent application and grant trends, competitive activity, and emerging technologies, you can identify new opportunities for the company to track where the industry is headed and utilize the white space in your domain. 

This information can help the company’s R&D efforts and secure new patents that give your company a competitive edge.

Therefore, investing resources into constant patent tracking is vital to avail the benefits of identifying the signals of change. It may not be the obvious choice during economic downtime, but it is definitely a smart one in the long run. 

GreyB has been able to help companies in diverse fields stay up-to-date with what is and may happen in their domain. We dive deep into patent insights and wide into the industry trends to analyze where the industries will head next. And we are almost* always right.

*except for that one time… oh no, wait, that never happened. 😉

Don’t miss out on the next big opportunity to become the megacorp in your industry. 

Authored by: Annie Sharma, Editorial Team