Using Patent Data for Technology Analysis and Planning

Patents have several advantages as a "technology indicator." In addition to being public information, patents provide a wealth of detailed information, comprehensive coverage of technologies and countries, a relatively standardized level of invention, and long time-series of data. Until recehtly, however, significant questions hindered more extensive use of patent data by corporate technology managers. The chief question concerned the validity of patent data as a measure of technology. Another frequently expressed concern was that patents vary widely in their importance, which is not reflected in simple patent counts. Analysts have also been concerned about the timeliness of patent data and the utility of existing patent technology classifications. Many of these questions have been resolved by a recently completed study. The study developed a method of statistically analyzing international patent records for use in assessing and forecasting the technological activities of competitors. The method was applied to an emerging technology -- sol-gel processing of glasses, ceramics and glass-ceramics -- and a mature technology -- nitric acid production technology. The study was conducted in cooperation with two companies interested in applications of patent analysis: Air Products and Chemicals, Inc., and Corning Incorporated. The results of the patent analysis were validated by comparison with expert opinion. The study concluded that statistical analysis of international patent records is a valuable tool for corporate technology analysis and planning. Overall, the results of the patent analysis conformed quite well with the opinion of technology experts. Patent trends clearly distinguished between the emerging technology and the mature technology. Forecasts using a life-cycle model got quite high validity scores. How It Works The method consists of conducting a patent search on the online database WOPLD PATENTS INDEX (wPI), and then using specially developed software to convert the patent records into a statistical data set which can be analyzed in a variety of ways (1). What makes this approach dilferent from others is its use of international patent records (see editorial box, next page), its analytical flexibility, the fact that it was developed in cooperation with corporate technology planners and assessors, and the fact that it has been validated against expert opinion. For a given technology, the method produces a series of statistical reports and graphics depicting the level of technological activity, active areas of the technology, important inventions, inventors, and markets in which protection has been sought for the technology. These analyses can be conducted at the worldwide level (i.e., all countries and all firms) or broken down by country or by firm. In this way, the method provides the "big picture" of what has been happening around the world in the information on the technological directions of particular firms, the inventors they employ, and the world markets in which they are choosing to protect their technology. The method promises to be of value to R&D, technology, planning, patent, and marketing departments. It will be a useful addition to technology assessment and characterization processes, where it can provide additional, confirming information on the life-cycle stage of a technology and competitor strategies. Use of international patent data can be especially helpful in analyzing technologies where the firm has limited expertise or where the firm is considering a major international move. Validating the Method A questionnaire was administered to experts in the technology who were selected by the cooperating firms from among their technical personnel. In both cases, usable questionnaires were received from four experts. The most successful validity measure was a question that asked the expert to consider the results of a particular patent analysis -- e. …