Patent Information Service Provider Market: An Overview

Patents are important sources of technical and business information. They provide
insight on technology, business, and competition, and have the potential to affect key
decisions, such as those related to Research and Development (R&D) strategy and
the business strategy of a company.

The patent information services market comprises of companies that provide
products and services related to searching, mining, analyzing, and managing of
patents and patent-related information.

At present, Knowledge Management (KM) and Information Technology (IT) tools are
being used for searching, mining, analyzing, and managing patent information.
Although the current state of the art demands significant human intervention for a
meaningful analysis, a host of advanced tools that would reduce human intervention
in mining and analyzing patent information are likely to be available in the near
future.

A variety of factors affect the dynamics of the patent information services market and
these factors are leading to evolving business models among patent information
service providers.

More details on the patent information service market will be available in a report that
to be published by Evalueserve on August 31, 2004 (http://www.evalueserve.com).

1. Patent Information and its Uses

Users of patent information include research organizations, corporate organizations,
law firms, universities and independent researchers.

Espacenet estimates that more than 80% of the world’s technical literature is
documented in the form of patents, and hence, it is not surprising that researchers
in research, development and corporate organizations as well as those in universities
use the technical information obtained from these patents as starting points for their
research. Use of patent information helps in them potentially avoiding the
‘reinvention of the wheel’ because they can potentially license and use patented
technologies instead of wasting time and money in developing identical technology.

Additionally, technology landscape analysis based on patent information helps in
identifying niche areas wherein the return on research investment may be higher.
Hence, most corporations and research enterprises use the available patent
information while formulating their R&D and business strategies, and they particularly
use this information while doing competitive analysis and while conducting “due
diligence” with respect to mergers and acquisitions.

Finally, research analysts often use patent information to benchmark the
innovativeness of a company, in comparison to its competitors. Similarly, patent filing trends of a company are used as indicators of the research focus of the company.

2. Patent Information Services

Several sources of patent information are available over the Internet. Patent offices
of several countries provide free access to their patent databases. However, most of
these databases are limited in their coverage to only one country or geography and
are usually accessible in only one language. Obtaining, analyzing, and utilizing
information from such diverse sources is a complex task. An exception is esp@cenet
(offered by the European Patent Office) that covers patents granted by most
European country patent offices, the United States Patent and Trademark Office
(USPTO), the World Intellectual Property Organization (WIPO), and patent abstracts
of Japan. esp@cenet also supports searching in most European languages.

Continuous increase in the number of patent applications being filed and granted
over the years has further complicated the task of searching, analyzing, and utilizing
patent information. Figure 1 shows the increase in the number of patents filed at and
granted by the USPTO in the period 2000-2003.

Companies providing patent information services usually provide searching, mining,
analysis, and management of such information. The common products and services
offered by these information service providers include:

•  Advanced patent databases. These databases combine patent information from
  multiple sources. Additionally, the providers modify and enhance this patent
  information to provide some more refined information.
• Search tools for accessing the patent information stored in the patent databases.
• Analysis tools for analyzing the patent information.
• Visualization tools for presenting the analysis.
• Multilingual services for handling patent information available in different
  languages.
• Readymade or customized reports based on requirements of users.

Users choose service providers based on their requirements. Figure 2 shows the
comparison of various patent information service providers with respect to their
search capabilities, which include:

• Quick search.
• Standard search.
• Special search.
• Complex search.
• Patent landscaping.

Quick search is a single keyword search, based on a patent number, an assignee
name, one technical word, or an inventor name provided by the user. The search
engine uses the keyword and returns the search results ‘AS IS’ to the user.

Standard search is based on multiple keywords provided by the user. Boolean
operators can be used with these keywords. The search engine uses the keywords
and the given Boolean function and then returns the search results ‘AS IS’ (to the
user).

Special search is an extension of Standard search, wherein the obtained search
results are further refined by using additional criteria provided by the user.

Complex search is based on an idea, concept, figure, diagram, or a picture provided
by the user. These cannot be searched by using the search services described
above. Examples of this kind of search include searches based on structure of
chemical compounds and mathematical formulae. This search involves interaction
between the user and the service provider.

Patent landscaping involves identification of basic trends and relationships based
on the results of the above-mentioned searches. The results of patent landscaping
are graphs and tables that reflect these trends and relationships.

The search methodologies currently supported by patent information service providers include keyword-based search, natural language search, and concept- based search.

In keyword-based search, the occurrence of exact keywords in the patent text is
searched. Natural language search is an extension of keyword-based search
wherein variations and extensions of keywords are also searched. In concept-based
search, the search for patents is carried out on the basis of the concept defined by a
search query. Concept-based search reduces the chance of missing a relevant
patent during searching. For example, in a concept-based search, the keyword
‘computer’ will also identify patents that contain other words and phrases such as
‘data processing system’.

Patent Information Service providers usually use the following parameters to
differentiate their services from others:

• Number of patent databases covered.
• Search and analysis tools offered.
• Searching through non-patent literature.
• Globalization (in terms of translation services and interface languages).
• Specialized content such as refined patent abstracts.
• Including of a limited amount of structured diagrams, e.g., “Markush Structures.”
• Subscription costs.

As of now, the deciding factor for most users seems to be the cost of subscription.
Table 1 compares the subscription costs of various service providers. However,
considering the growing importance of patent information in making critical decisions,
and with an increase in the availability of tools providing complex analysis, it is likely
that other factors will gain importance.

In the current patent information services market, the technology barriers faced by
any new player intending to provide services are quite low. The key challenges,
however, are in terms of reaching the end customers. Users tend to get accustomed
to a particular service provider, making it difficult for new players to create a market
for themselves. Hence, overall, we believe that the basic searching model will be
commodotized and the prices charged by the sevic players may go down in the
future.

3. KM and IT Enable Patent Information Services

Largely, the scope of the patent information services provided by various service
providers seem to be limited by the inherent capabilities – or the lack thereof – of the
underlying Knowledge Management (KM) and Information Technology (IT) tools.
Patent information service providers currently offer some KM and IT tools to enable
easier access to patent information. For example, Thomson Delphion offers
Snapshot and PatentLab that help in analyzing patent information. Similarly,
Micropatent offers tools for automatic report generation; PatentCafé offers claim
searching that searches for concepts within the claims of a patent; STN allows users
to search on the basis of chemical structures (vis-à-vis compound names); SurfIP
offers machine translations of English patents to other languages; and LexisNexis
offers low-cost machine translations of Japanese patents.

The current state of art clearly requires significant human intervention for intelligent
mining and analysis of patent information. In particular, it is required for identifying
search terms, considering variations of terminology within a given field, ensuring the
right meaning of the “jargon” used within a patent or patents, defining search queries,
and then analyzing the search results.

Figure 3 provides a comparison of features offered by various KM and IT tool
providers. We believe that although most patent informaiton services providers are
currently using most of these tools, they are likely to do so during the next 2-4 years.
This is mainly because some of these tools can help in reducing the manual effort
involved in searching and analyzing patent information and although many tools are
currently not customized for patent information services, some of the features offered
by them are very relevant to warrant their use in the patent information services area.

Finally, it is worth noting that although concept based searching is still in a nascent
stage, future developments in this area are likley to enhance its accuracy and reduce
the human effort. Hence, Patent Café has already incorporated concept based
searching in its most recent patent searching solution.

4. Future Trends

Patent information continues to play an important role in technical and business
decisions. Our analysis indicates that advances in KM and IT tools will help in
providing better patent information services since they will reduce the human
intervention that is involved in analyzing patent information. Moreover, with the
enhancements provided by these tools, the deciding factors for choosing a patent
information service provider will move from cost and familiarity to search
methodologies and services supported by the service provider. Together, these
would lead to the emergence of new business models in the patent information
services market.