Why license in ?

Efficient innovation today requires that the technology state of the art be fully understood. Indeed, as explained above, whatever the type of innovation (incremental, breakthrough or disruptive) your company is trying to implement, new inventions all lean on previous ones (also designated as prior art). The best and most obvious illustration is the smartphone industry where 250,000 active patents today impact smartphones.

Unless your company efficiently scouts technology in the early stage of its innovation process and in-licenses relevant inventions, it could be taking considerable risks of infringing patents that could have helped leverage and accelerate the innovation process in exchange for a well negotiated license

When license in ?

A licensing-in analysis commonly follows a technology scouting process with a positive outcome. In other words, gem patents likely to boost the innovation phase have been identified and are needed to carry on. The next and essential phase consists on understanding how such patents compare with the industry’s similar inventions, and more particularly with your own.

A licensing-in analysis aims to:

  • Validate the contextual value and complementarity of targeted patents with your portfolio
  • Prepare the negotiations to engage with the potential licensors

Orbit’s patented Licensing-in solution offers a unique and productive benchmark approach to facilitate the evaluation of targeted patents and potential licensors, and support your negotiation pitch with a set of solid quantified and vetted metrics. Its unique set of high value-added tools and features accompany you through each step of a guided analysis process:

1. Find your company’s and industry’s patents similar to the licensing candidates :

Orbit’s premium similarity algorithms comb the largest global patent database in the industry to spot patents that are most technically related to your licensing candidates, compiling expert patent searchers’ best practice and techniques.

2. Rank results by relevance:

The system automatically and conveniently ranks inventions by descending order of technical relatedness to your licensing candidates, displaying their score.

3. Rapidly spot and understand relevant inventions:

Isolating patents that are technically close to your licensing candidates is an extremely tedious yet critical phase. Orbit offers advanced Computer Assisted Reading features, reducing considerably the effort and allowing delivery of a high quality selection in a short turnaround. Just pick any of your favorite options in the long list of high productivity features available to you:
KWIC (Key Words In Context), Key Content (Object, Advantages & Drawbacks, Independent Claims), Normalized Key Technical Concepts, high resolution image clusters in mosaic, Dynamic highlighting navigation, Normalized Legal Status timeline, Interactive Family Graph, and many more

4. Benchmark portfolios on 45 metrics : 11 legal, 20 technical, 14 market

Determining whether a set of licensing candidates is good or not requires to benchmark it against your company’s similar patents to identify how complementary they are. But it is also at least as important to evaluate the overall performance of both portfolios in the entire industry’s comparable art.

In just 1 click and a few minutes of very intensive computer processing, Orbit provides you with a series of radar graphs showing the performance of the licensing candidates, that of your similar patents, and whether such performance is below or above the industry’s comparable art.

Good and bad performances are visible at aglance, allowing focusing on both aspects and building a strong negotiation pitch.

All of the retained and calculated metrics are recognized and used by licensing experts. Most of them were actually vetted and published by OECD. They are segmented in the 3 major sections :

Validity and ownership metrics:

Litigation count, Re-examination count, Opposition count, Uncited prior art, Co-pending prior art, Average backward citations, Average age, Over 5 years left, Co-assigned art, Average inventors, Documentation workload

Technical and use value of assets metrics:

Citation velocity, Average forward citations, Average forward citations by others, High forward citations, Shark presence, Predator presence, Company fences, Forward vs backward citations, Self vs others’ citations, High backward citations, IPC dispersity, Average IPC dispersity, High IPC dispersity, Generality index, Originality index, Radicalness index, Non-patent vs patent references, Claim length, New in last 5 years, Re-assignment frequency

Geographic value of assets metrics:

Invention count, Average family size (including applications), % grants metric, Tier1 and BRIC coverage, US coverage, JP coverage, DE coverage, FR coverage, BR coverage, IN coverage, CN coverage, KR coverage, AU coverage, TW coverage

5. Rank other potential licensees

Companies owning patents that cite the licensing candidates the most frequently are clearly working in the same field and showing strong signals. Such companies are, by nature, potential licensees ; in other words, they are likely candidates ready to engage in the race for licensing the same targeted technology.

Knowing who other potential licensees are can help you fine-tune your negotiation pitch and measure the risks associated with different approaches.

6. Adjust/customize metrics’ weight as needed

When strategic decisions are supported by analytical tools, there is nothing worse than so called « black box » systems offering no control nor clear understanding of what is happening behind the scene.
Orbit Licensing-in is fully transparent and lets you adjust the metrics, depending on your preferences. You can therefore value some specific metrics more than others.

For instance, some industries will not value the same metrics so highly as in other ones. Pharmaceutical firms tend to opt for global protection, preventing competitors from producing the same drugs in countries where it would not be protected. In this case, the average family size metric might not be so critical. On the opposite, in the automotive industry where goods are very difficult o produce, going for global protection could be an indication that such invention might have far broader application fields, perhaps easier to implement ; here, the same average family size metric could thus provide a much stronger signal and be valued higher.

7. Prepare for negotiations

As intangible assets, patents are thus very difficult to value. Nevertheless, preparing for licensing negotiations requires that a solid and factual assessment be carried out. Identifying and understanding who the other potentially interested parties are is critical, as it could heavily influence your negotiation pitch. The more prepared you are to start the discussions, the more factual your objections and justifications are, the higher your negotiation leverage will be.

Orbit Licensing-in provides a complete set of well-spread and recognized metrics allowing to prove the superior (or inferior) performance of the licensing candidates compared with the industry’s comparable art and give your position a lot of weight. Most metrics have been verified and published by OECD in 2013. Orbit allows to check every calculated metric, validating and strengthening your pitch.

The Orbit Licensing in solution provides you with a fast and reliable negotiation toolkit. This highly productive benchmarking tool allows confronting the set of inventions you plan to license in with your company’s similar patents. In just a few minutes, the system calculates and displays a broad set of relevant and accurate metrics on radar diagrams highlighting where both portfolios are complementary, and whether they score above or below the industry. It also supplies a list of other players most likely to bid against you, leaving no room for the unexpected. Orbit Licensing-in reinforces your preparation before you engage into licensing negotiations.