Up until the 1990s most corporations grew by way of using internal market, technology, and business development resources. It was always a challenge to run them in a way that would make sure that the company’s growth was supported by new products and service offerings. In the 1990s however things changed. For successful Internet dot.com companies market value increased radically. Dot.com startups started building market value equivalent to Fortune 500 companies in just a few years. One of the dilemmas faced by large company CEO’s, COO’s and CTO’s was how to meet shareholder expectations in such an environment. Why should large pension funds and individual investors alike continue to invest in the Fortune 500 bricks-and-mortar companies when they can make more money quicker with dot-com’s. This environment forced large Fortune 500 companies to start promising investors growth that would at least partially match what could be achieved with risky dot-com’s. The growth had to come from somewhere however. Business development and technical groups were under extreme pressure to come up with new ways to produce new products and services faster. It turned out it was the Open Innovation methodology explained later in this book that allowed such to happen. Integrating business development, market research, technical research and intellectual property research with Open Innovation options allowed traditional companies to compete with the new entrants.
One of the factors pushing large companies to move this direction was a significant increase in intellectual property secured. The “U.S. Utility Patents per Year” figure shows the growth in US utility patents. In that graph one can see three or four very different environments.
In the first environment from the start of USA as a country in the 1700s up until the mid-1800s intellectual property rights were few and far between. From the mid-1800s up until the Great Depression in the 1930s a steady growth in intellectual property occurred as the industrial age swept the nation. The Great Depression and the World War II took its toll on intellectual property. Rebounding after World War II and the dramatic scientific advances that occurred during the war, caused a much tighter growth rate in R&D investment and securing of intellectual property as shown by patents. The oil crisis and the recession of the 1970s again took its toll. The 1980s saw growth again in R&D, and filing of intellectual property took off again at an even higher rate as laws governing university generated IP and global expansion produced new innovation avenues. As business methods were allowed as intellectual property, a huge burst in the late 1990s occurred as dot-com’s and bricks-and-mortar companies alike started securing intellectual property in this new arena. Bursting the.com bubble caused a fallback in the issuance of intellectual property but one notes that again it is on a very rapid rise once more.
Last rates shown on this graph and around 175 hundred thousand US patents issuing each year this is indeed a formidable barrier towards coming up with distinct new ideas. Companies with new ideas when they search in the patent literature will sometimes find that they have patents in force and salinity is good for 20 years, in the neighborhood of hundreds of thousands of documents. Environments like this are called “intellectual property jungles”. An example of this is in the area of inkjet printing. In the late 1990s one large US Corporation decided to enter the field, there were over 120,000 issued US patents coming out at the rate worldwide of about 3000 per month. If one thinks of the technical challenges here to be unique they were very difficult. Just about every nuance of inkjet printing had been covered. It started with the paper or polymer substrates is describing fiber structure or polymer composition. People had claimed specific coatings to paper or plastic’s to make the print on them stick better, brighter. Company said developed technology around very specific printed designs. They had patented the software algorithms that control the droplet size and shape. They develop algorithms to control the color hue and intensity. And it certainly patented the overall printer design size and shape in computer interfaces. Upon entering the field as it conscientious business development or technology manager one and a look at this prior art and determine what freedom to operate would exist.
The above illustration maybe a little discouraging at first read. But all is not lost. There are ways to operate in such heavily patented areas. Usually, upon closer scrutiny what is found in a significant number of cases there are holes left in the technology or technology has expired. This reduces the complexity down to that of what is called an IP force were there hundreds to thousands of documents to consider, but certainly not 10 thousands or more. In these environments instead of a thick jungle with vines crowding out passage anywhere, one comes across instead open meadows of business opportunity in amongst trees of the IP forest.
In fact at times this task becomes even simpler. This time the example is taken from construction drywall or sheet rock. Most consider this a very mature area. In fact if you look at the overall intellectual property landscape you find that it is indeed a very thick for forest if not becoming a jungle. Using some of the strategies that will outline later on in the book, that being a blue Ocean strategy to identify consumer needs and wants, it is possible of highlight features in drywall that had yet been explored. Looking at the corresponding intellectual property landscape for these unique features what was found is actually an IP desert. In IP desert that is landscapes with only tens of documents present one really has an opportunity to conduct internal research that has a high chance of being unique and distinctive. Capturing and protecting this strong business position is a typical outcome of integrated business technical and intellectual property processes. Does rather than shying away from growth in mature industries are giving up on the opportunity in fact solid market research technical research in intellectual property research studies on well-integrated uncovers countless opportunity.