AmberBlog

Remember the 1980’s? Big hair and Duran Duran? The 1980’s was also the era of the invention of MS-DOS, the Apple Macintosh, Windows, the first cellphones, and Prozac. But what were the leading patents from this era?

Users of AmberScope should be familiar with AmberScore, our patent ranking system. AmberScore considers such factors as as the number of forward and backward citations, the strengths of the citation connections, the age of the patent and the number of recent forward citations to come up with an overall score for the influence of the patent. AmberScore values are normalised as well, in such a way so that the average granted US patent less than 20 years old has an AmberScore value of 1.0 So an AmberScore value of 2 for a US patent is twice as good as the average granted patent, and so on.

AmberScore is based on our experience of ranking patents using Network Patent Analysis, and considering the limitation of other means of ranking patents. It is designed to be a simple to use and easy to understand predictor of patent quality.

In a three part series of blogs, we will consider the 10 most influential patents of each of the three last decades in order to illuminate some of the key technology trends over this period (note that in this top 10 list, we will exclude family members from a patent already in this list). So what were the top ten patents from the 1980s?

1) Leading our list (and in fact with the highest AmberScore value in our entire database) is US4733665 "Expandable intraluminal graft, and method and apparatus for implanting an expandable intraluminal graft" (filed 1985), originally filed by Expandable Grafts Partnership. This patent covers an expandable graft which can be used to dilate blocked blood vessels and so help deal with the consequences of heart disease. US4733665 has an AmberScore value of 347, which may reflect its 26 backward citations and 2,174 forward citations.

2) In second position is US4800159, Process for amplifying, detecting, and/or cloning nucleic acid sequences (1986). This patent is concerned with genetic engineering, and has just 3 backward citations, 1003 forward citations, and an AmberScore value of 206. Originally filed by Cetus Corporation, its last  listed owner is Roche Molecular Systems.

3) In third position, with an AmberScore value of 176, is US4886062 Intravascular radially expandable stent and method of implant  (1987), to Medtronic.  This is another device for unblocking blood vessels. This patent had 12 backward citations and has 1237 forward citations.

4) Heart disease was clearly a big focus in the 1980s, because the 4th most influential patent was US4800882 to Cook Incorporated, Endovascular stent and delivery system (1987), which refers to a wire stent used for clearing blood vessels. This patent has 12 backward citations and 1237 forward citations, and an AmberScore value of 167.

5) But this is not the only Cook Incorporated patent for a stent in the top ten list, as in 5th position in US4580568, covering a Percutaneous endovascular stent and method for insertion thereof (1984). This patent has 9 backward citations and 1144 forward citations, and a AmberScore value of 164.

7) The last of the stent related patents in this top ten list is US4655771 Transluminally placed expandable graft prosthesis (1983). Originally filed by Charles Dotter and now owned by Cook Corporation, this patent has 11 backward citations, 898 forward citations, and an AmberScore value of 158.

8) Moving from stents (I learnt more than than I ever suspected I would know about stents after writing the above section), in 8th position is US4799156 to Strategic Processing Corporation, which is for an Interactive market management system (1986). Essentially, this is a patent for e-commerce, including the ability to run multiple transactions in parallel, a central system and validation process. This patent has 10 backward citations, 1400 forward citations, and an AmberScore value of 137.

9) Genetic engineering re-enters this list in 9th position, via US4816567, Recombinant immunoglobin preparations (1983), filed by Genentech. As readers would recognise, a 'recombinant immunoglobin' is a genetically modified antibody, with many potential applications in treating diseases. This patent has 8 backward citations and 2425 forward citations, and an AmberScore value of 135.

10) And in 10th position is something is a patent for something that many of us might have at home, namely an inkjet printer. US4740796 to Canon covers Bubble jet recording method and apparatus in which a heating element generates bubbles in multiple liquid flow paths to project droplets (1986), or the process of creating the droplets printed onto paper in inkjet printing. This patent has 14 backward citations and 1944 forward citations, and an AmberScore value of 134.

So there is the final list - Six patents for inventions related to clearing blocked blood vessels, two for genetic engineering, and a patent each for e-commerce and an inkjet printer. As a matter of interest, the next 10 patents include more patents for stents, but also patents for securities trading, semi-conductors and a further patent for genetic engineering. But as will be seen in Part 2, the equivalent list for the 1990s sees a big move towards the electronic age - including a patent for a slot machine.

Appendum - Relationship between AmberScore and forward citation count

Sharp eyed readers would have noted that these patents all had very high forward citation counts, which is used as an indicator of patent quality by many analysts. However there was not a perfect correlation, with the 9th and 10th ranked patents having the highest and third highest forward citation count respectively. Readers might ask:

1. How can this be?, and;
2. Why not just use forward citation count as a patent quality indicator?

If we answer these questions in reverse, there does seem to be a shared view among many patent analysts that while forward citation count is important, by itself forward citation count is not a complete measure. Other analysts supplement forward citation count with other measures such as those based on: 

• prosecution measures such as the number of family members, renewal history etc
• litigation measure, such as whether the patent have been litigated
• internal measures, such as the number of inventors, breadth of patent codes.

Each of these measures has their limitations, such as

• prosecution measures can be affected by corporate decisions more to do with commercial strategy than patent quality
• litigation measures can be limited in that many high quality patents are not litigated - competitors may recognise a good patent when they see one, and just keep away from it
• internal measures may only have a weak correlation with patent quality

Based on significant experience with NPA studies, Ambercite instead prefers to use advanced network measures (such as AmberScore), which take into account forward and backward citations, and the citations to these citations etc. This based on the model that influential and important patents are not only connected to many patents, but many of its connections are connected to other influential patents, and many of these connections are strong - all of this reflecting a patent area of high concentration ('patent thicket') and hence high likely value.

Or in people terms, it is not just how many professional contacts you have, but how strong these connections are and who these people are connected to.

And this helps explain why AmberScore did not rank the top ten patents in the same order as forward citation count - it is not just how many people you know, but how well you know them, and how up to date your friendships are.

Would you like to use Amberscore to predict the influence of patents you are interested in? Further details of how to use AmberScore are found here.

I have had a lot of valuable discussions with people about measuring patent quality in the last few months. A number of these discussions have had people making statements along the lines: "To measure patent quality you have look at the claims, the patent wrapper, quality of the drafting, etc, and this best done by a patent attorney".

I have thought about this proposition, and come to the conclusion that it is completely true. These factors are very important, and are best done by competent patent attorneys or patent lawyers. However this is only part of the story.

Imagine buying a house. This is a big investment, particularly an existing house where you might not fully understand its history. And accordingly, and this is exactly what I did when I bought a house, you would be well advised to hire a builder or ex-builder to carefully go over the house to advise on how well it is built and how well it is likely to last. A builder is best qualified to advise on this as they are intimately aware of the intricacies of building homes.

However when I bought my house, I did not dream of asking the builder how much he thought the house was worth. And if I had done this, he probably would have refused to provide a figure, as this did not fit in with his area of professional expertise.

Instead to value our home we used a valuer. And what the valuer did was compare the overall quality of the home (in an approximate sense) to their databse of other houses in the neighbourhood where sale price data was available, and use this data to estimate the value of the house.

And both roles are very important. A builder to tell you that a house is well built - and the valuer to tell you that the house is worth buying (or keeping).

This is a key value proposition of Network Patent Analysis (NPA). NPA is not intended to replace the role of a patent attorney in reviewing the strength of individual patents. However NPA can give an objective comparison of individual patents to the other patents in the 'neighbourhood', and so provide a systematic basis for patent valuation.

As an example, consider the likely value of the Motorola patent shown in the figure below, which appears to be prior art for a number of highly ranked Apple patents.

Hence NPA can play an important role in the due diligence of patents, a role that goes beyond the more traditional roles of looking at patent validity and coverage as expressed by the claims and file wrapper of the patent. NPA is also useful as it can review up to tens of thousands of patents at a time, allowing the patent attorney to focus their valuable efforts at the most promising prospects. 

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I recently read the very interesting "The Invisible Edge", by Boston Consulting Group economists Mark Blaxill and Ralph Eckardt. The full book has been reviewed elsewhere, so I won't discuss the whole book. However I will say that Chapter 9 struck a particular chord with me.

Chapter 9 explores the concept of IP as a tradable asset, beginning with pop star David Bowie offering bonds backed by the copyright to his music in 1997. By doing so, David Bowie was able to raise $55 million in cash, and bond investors were able to make an investment in his music. Blaxill and Eckardt then speculated that IP could be the next major financial asset class, in the same way that real property has moved beyond being a place where we sleep or work, but instead has moved to an investment where the ownership and financing could be separate completely from its use. The authors speculated that this would come in a number of stages:

• Stage 1: IP assets are closely held and rarely traded
• Stage 2: Specialists emerge to facilitate transactions
• Stage 3: Speculators enter the market
• Stage 4: Transaction costs decline
• Stage 5: Marketplaces for exchange are established
• Stage 6: Derivatives emerge

So where do patents sit in relation to these stages? The author's argue, and I agree, that patent and patent owners are now found at all of these stages. The emergence of these complex markets is the reason for the newer types of IP owners that we are starting to see, such as Intellectual Ventures for example.

I am a practicing IP manager, and wanted to look at this from the viewpoint of a company wanting to use patents. I wonder if something similar to the figure below shows the complexity of IP access in the years ahead:

In this map, the terms:

• 'Owner-operator' refers to a company that owns IP and sells product or processes under the same name, i.e. no license agreements are in place. This is still the most common form of IP ownership.
• 'Company IP Ltd' refers to a company that the ownership of their patents in a separate but related legal entity, and there are a number of possible reasons for doing this. Ford, for example, own many of their patents under the name of Ford Global Technologies.
• 'IP Ownership Syndicates' refer to syndicates of IP users that might jointly own a group of patents, for example the syndicate that recently bought the Nortel patents.  .
• 'Non-Practicing Entities' refer to the likes of intellectual Ventures, while IBM is an example of a patent owner that will freely license their patents to other IP users, including their competitors. Obviously sometimes this type of licensing is in response to actual or threatened litigation.  

What ties together the Blaxill/Eckardt model of tradable IP assets, and the above model of IP access,  is the need in both models for increasingly accurate views on IP value and quality. If we compare the IP market to the real property market, for example, it is a lot easier to obtain an independent market view of either the purchase or lease price of a house or commercial building. In contrast, it is a lot harder to obtain these values for a patent or other IP right, and for a number of reasons.

Among the biggest of these reasons is that IP can be non-exclusive. In general, only one family can live in a house, while a family only needs to live in one house. In contrast some products can be claimed by thousands of patents, which may also claim many other products. In this light, IP valuation models based on the profitability of the product can find their limitations - how should the profit be divided among many different patents? Should the profitability be attributed equally, or should 'better' patents earn the right to a greater share of any royalties payable by the product owner? If so, how would we judge the better patents, particularly without an individual assessment of what might be thousands of patents?

Other people might ask if the value contribution of a patent protecting a product should be distinguished from the value contribution of other components, such as the company brand, distribution system, etc. Simply assigning all of the 'excess' profit earned by a product to a single patent may give a misleading impression of the value of the patent. 

These are the sorts of questions that are likely to come up more and more. IP managers sometimes talk about the IP being the majority of the value of many businesses. Blaxill and Eckardt suggest that as commercial managers wake up to this, they will demand more and more from the IP assets of the firm, just as they do for other types of corporate assets (other examples of IP capitalisations are found here).  This will naturally drive more and more measurement of patent and other IP asset values. David Bowie may have catalysed a big trend when he decided to capitalize his copyright rights back in 1997. 

I think this is an exciting time to be an IP specialist. With the right tools that can assist with IP valuation (and Network Patent Analysis can provide a unique means of predicting the relative values of patents in a crowded field) there is great scope to play an increasingly important role within our business environment.