Nine years ago I started Innography in order to disrupt and revolutionize the patent landscape. Although starting your own company is cool – why start a company to change how people use patents? Simply, because there are hundreds of billions of dollars tied up in patents with little to no business insight today, providing a rare opportunity to revolutionize an enormous industry. Let me give you some more practical perspectives from how Innography was born.

While working at IBM, I was involved with the “Smarter Planet” initiative (smart sensors for electric grids, etc) and filed dozens of patents, becoming active in the patent community. In 2005, a new product was to be launched, and instead of filing new patents and waiting 3-5 years for them to grant and protect the product, IBM wanted to protect that product now. I joined a team whose task it was to map existing patents to cover the new product. Over 6 months, 200 employees tried to answer that problem – and we never came to a compelling conclusion. In many respects, mapping patents to products is the holy grail in the patent industry – and is exceedingly difficult. Thus, Innography was born.

Instead of thinking of patents as legal assets, let’s look at patents as financial assets – no different than a mortgage, stock, or any other financial commodity. Patents inherently have value and can be bought and sold, but lack an infrastructure to value, trade, or secure them. Something as simple as valuation is immensely difficult. Whereas other industries valuation could be off by 10-20%, patent values could be off by over 1000%. While billions of dollars of value are tied up in patents, there are no business means to view those patents. Business intelligence and big data application was a foreign concept in the patent marketplace before Innography. By defining business metrics and tools to make patent decisions, Innography hopes to simultaneously save and earn companies billions of dollars.

Many technologies have been researched and applied at Innography. My personal background is in Computer Science, specifically distributed computing and machine learning, so we apply a lot of big data technologies and artificial intelligence. In order to apply business intelligence, we load, clean, and connect massive data together. We process over 100TB of data weekly, from hundreds of data sources (patents, company financials, litigation, M&A, research papers, products, etc). We then use proprietary data mining to turn unstructured data into structured in-memory data warehouse. This includes entity extraction, correlation, and probabilistic algorithms to account for human error or missing information, and more. Next, we apply cutting-edge technologies like graph databases, in-memory databases, semantic searching, text clustering, and more to help extract meaning for our users. The biggest challenge for the legal implications is that all our technologies must be a) explainable, b) transparent, and c) editable/customizable by our users so they can have confidence in their decisions. While there are many cool algorithms we have researched (e.g. predicting outcomes of cases), we’ve found that adoption requires transparency and comfort with the technology. We quickly learned that understanding what people would do differently from the data made all the difference. If you can’t make a decision from a visual, then we won’t render it. If you can’t interpret the data, then we’ve failed. And if you can’t take action from a decision/analysis, then there is no customer value. As logical as it sounds, it is very difficult to do, driving us to focus on usability and understanding user workflows.

So, with all this cool technology, will it pay out in the end with where the industry is heading? We hope so, as Innography has already changed the world of patent analytics forever. Even with the Supreme Court ruling on Alice, changes in the licensing landscape with NPEs, and pending legislation, we see all this disruption in the patent space as positive. Change makes people rethink their processes and to adapt. There are still tens of billions of dollars spent each year in this industry, and woefully little business intelligence applied toward those spending decisions. A decade from now we foresee companies spending less on maintenance and filings, generating more from licensing/sales, and overall aligning closer to products to reflect the core of their businesses.

I appreciated the opportunity to present to Codex, and appreciate any comments or thoughts on the emerging patent business landscape.

About Innography

Innography enables organizations of all types and sizes to achieve optimal return on their IP investments. Innography’s proprietary suite of products combines unique correlation and visualization technologies to seamlessly integrate patent data with financial, litigation, market, and other key business information. This enables users to quickly gain valuable insights for managing, protecting, and exploiting their patent portfolios. Based in Austin, Texas and privately held, Innography is the world’s premier Intellectual Property Business Intelligence (IPBI) provider.