Wednesday, October 7, 2009

Patents become more granular at tech companies

By Jackie Noblett

Video Gallery

MHT's Galen Moore: Hiring trends and opportunities

Breaking down the MIT $100K

MHT's Doug Banks: 10 Women to Watch in tech

Related News

Blog: Cost of patent reexamination may skyrocket [February 9, 2012]

Chinese court dismisses one of AMSC vs. Sinovel cases [February 6, 2012]

Fraud charges dropped on Stryker ex-president Philip [February 3, 2012]

Judge grants stay of preliminary injunction in Momenta Pharma case [January 27, 2012]

Boston Scientific cleared of 2008 J&J patent suit [January 23, 2012]

When it comes to New England’s most prolific patent-producing companies, many of them are easily recognized brand names in the information technology community.

And then there’s Acushnet Co.

The Fairhaven golf equipment company has received 93 patents so far this year for advancements in the composition, construction and geometry of products, primarily its multiple lines of golf balls. A single golf ball may have 50 patents or more that determine everything from how high the ball flies to reducing the spin that causes a slice or hook.

Acushnet has already surpassed its patent production for last year, according to research exclusively prepared for Mass High Tech by law firm Foley Hoag LLP, and Acushnet officials suggest there are no plans to curtail their pursuit of patents. “There’s really been a huge explosion of acquiring IP in the golf ball business, and we have to be at the forefront of that trend,” said Troy Lester, who leads Acushnet’s intellectual property efforts. “We have to make sure we are at the forefront of the next generation of golf technology, and we want to be able to exclude others from that.”

Acushnet, ranking behind Xerox Corp. (502 patents this year), EMC Corp. (169) and Raytheon Co. (109), is not alone in rushing to protect its new products, either in their entirety or various key components in this period of economic instability. The fierce competition for customers and reluctance to spend money on minor advances has local tech firms swinging for the fences when it comes to inventions — and then quickly locking others out from copying those inventions. The corporate arms race around patents is not likely to end soon, especially in small technology companies where one patent can make or break a product.

“A lot of these companies, they don’t have an option of trade secrets. Their value is built upon their intellectual property,” said Mary Rose Scozzafava, a partner at WilmerHale.

While a sagging economy has forced some firms’ hands when it comes to choosing what technologies to invest time and money in, executives say the investment is just a part of being a tech firm. “It’s incredibly important. By nature, anything in cleantech is disruptive,” said Christina Lampe-Onnerud, CEO of Westborough battery maker Boston-Power Inc. “Even if you execute on your business plan perfectly, if you have an issue with the technology, it can really take you back.”

Boston-Power’s approach to patents begins at the benches of its researchers. As scientists develop advancements in battery chemistry, mechanics or electrical components, they go before a board  of top executives. If approved, the idea receives the attention and support of executives who have been through the patent application process.

But Lampe-Onnerud said the company, which holds 60 patents, has to be judicious with patent filing, as it costs them an average of $300,000 per patent for legal and other administrative fees. For larger companies, part of the impetus to file for patents is historical. They don’t want to beccome complacent.

“Without a dedicated amount of money going to innovation and protecting that innovation, a company just won’t be able to compete in the long run — especially in these high-technology markets where patents are so prevalent,” said Tom Marlow, intellectual property counsel for Fairchild Semiconductor Corp. in South Portland, Maine. Fairchild has received 50 patents year to date.

The company chooses to be “on the liberal side on patent filings,” Marlow said. Technology that may not be useful now might be useful in the future or in applications outside of its intended use. Furthermore, a large body of patents opens a company up to a bevy of licensing agreements and even cross-licensing to noncompetitors.

Deciding what to patent is not easy, especially among institutions whose goal is to perform research for the common good. Yet, much like for-profit businesses, institutions see technology patents and the revenue that comes from licensing, as necessary to making that technology development possible.

“It seems like there would be a contradiction, but when you put it into context, what does it cost to develop a device, diagnostic or therapeutic? And imagine if, at the end, you have nothing to show for it?” said Erik Halvorsen, director of the technology development office at Children’s Hospital Boston. “We have to take that and apply it to the research responsibly.” 

Inspiration: Firms follow their own paths of reward and recognition to drive technology innovation

Producing patents starts with new ideas and technology, but generating those ideas is never easy.

Officials at several technology companies say the inspiration for innovation comes from a multitude of sources, but all require a healthy dose of support and recognition to keep the inventions flowing.

EMC Corp. hosts an annual inovation conference, essentially a company-wide science fair judged by the company’s top executives including chief technology officer Jeff Nick. Officials say the competition, along with recognizing top technical staff in its EMC Fellows and Distinguished Engineers programs, creates an environment where engineers want to create new products.

Krish Gupta, vice president and assistant general counsel for EMC, said,  “When you’re a company our size, the challenge is how do you go about getting the best ideas and products out there.”

Fairchild Semiconductor Corp. uses a combination of financial incentives and internal recognition of inventors to spur employees to put new ideas on paper. “But the monetary incentives are almost secondary to prestige or the recognition that comes out of (producing a patent),” said Fairchild IP counsel Tom Marlow.

Sometimes the inspiration is simply the look on a patient’s face.

“The people I work with here do it because they are surrounded by sick kids every day and they’re never satisfied with what the standard treatment is,” said Erik Halvorsen, head of Children’s Hospital Boston’s technology development office.

Copy that

When it comes to patents, nobody in the New England tech community comes close to the company whose name became synonomous with copiers. Norwalk, Conn.-based Xerox has been issued more than twice the number of patents, mostly in imaging technology, as its nearest competitors this year. For perspective: The U.S. Patent and Trademark Office lists 26,836 patents for Xerox, roughly one for every two current employees.

Top 10 Assignees per period   

Source: Research by Foley Hoag LLP

Information edge
Communications and information technology tops life sciences in patents issued to New England companies

Source: Research by Foley Hoag LLP 

Mass production
The Bay State continues to outperform the rest of New England in patents issued
                   
Number of New England patents

Source: Research by Foley Hoag LLP