Technology Acquisition is interlinked strongly with patents. India and specifically Indian SMEs are facing patent threats. It is not Technology Acquisition but technology enforcement that is becoming the norm. The Achilles heel of technology business continues to be Patent Valuation. Crafitti's MDMP patent valuation is a must explore methodology.

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March 23, 2014 1© Crafitti Consulting Private Ltd.
Patents in
Technology
Acquisition –
Do we understand,
what we are saying?Navneet Bhushan
navneet.bhushan@crafitti.com
Phone: +91 9902766961

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March 23, 2014 2© Crafitti Consulting Private Ltd.
KEY POINTS – We need to Innovate!

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IP Imperialism: Indians even in India are not
filing patent applications
March 23, 2014 3© Crafitti Consulting Private Ltd.
IP
Imperialism

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The English word ‘patent’ is
derived from the Latin word
‘patere’ meaning ,- to be open.
• A Legal grant by a Government
• Terms of grant
– In return for disclosing an invention publicly so that others can learn from it, and
paying the processing fees, the Govt. of the country will grant the inventor of the
invention the rights to exclude others from making, using, or selling the invention
for a limited period of time
What is a Patent?
When you patent your invention - you disclose your invention or
"technical solution to a problem". If that Patent application - your
disclosure is Novel, Inventive and have industrial application and is
"sufficiently" disclosed you may get a right by the government of the
land/country to exclude others from exercising that "invention" for a
limited time period - currently 20 years from the date of filing. That
right is called the "patent right"!

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Case Study 1 (Engineering) – (1)
Scenario
• An MNC had an invention that was patented and that expired in 2010 in
multiple countries but it was not filed in India.
• In 1996, the MNC filed another patent which was a slight extension of the
base patent - but this time through PCT route they filed in India as well. In
India the application was published in 2004.
• The new patent was granted - they cited the base patent as prior art and
created some mumbo-jumbo the way people who draft these applications
know so that the new application was considered an invention over prior art.
March 23, 2014 5© Crafitti Consulting Private Ltd.
The MNC sent a letter to one of the big SME's in India,
saying their product infringes the patent - hence they
should stop production and sales.
The Indian company really was not aware of the
patent and what actions to take.

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Case Study 1 (Engineering) – (2)
Solution
• After months of struggle, they found us. We suggested
that
(a) Let us look at the extent of infringement
(b) let us look at the validity of the patent
In a week of study, we were able to prove that on
technical grounds
Patent is not valid (purely on Technical grounds)
(a) Insufficient disclosure of how to exercise the
invention
(b) Prior art - the old expired patent was the main patent
- and the extension was sort of small extension
(c) Prior use - there was a product existing in the market
since 1980s which clearly shows that invention described
in the patent is not Novel.
March 23, 2014 6© Crafitti Consulting Private Ltd.

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• Prior art - the old
expired patent
was the main
patent - and the
extension was
sort of small
extension
• Questionable
Novelty!!
March 23, 2014 7© Crafitti Consulting Private Ltd.

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Case Study 1 (Engineering) – (3)
Key lessons and steps
(a) Maintain a continuous patent watch in your industry
(b) As you see a patent for which you have a prior art or prior use - immediately
raise a pre-grant opposition in Indian Patent office (this is much less costly)
(c) If someone threatens with a patent - please do the following
i. verify the extent of infringement - many times infringement may be very small
or negligible
ii. Check the validity of patent - given the pace of patent apps and lack of
sufficient availability of manpower in patent offices - many patents are granted
with very low level of assessment - 50% of patents will be invalid on various
grounds
(
March 23, 2014 8© Crafitti Consulting Private Ltd.

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Case Study 1 (Engineering) – (4)
Key lessons and steps
(d) If there is an infringement and patent is valid
1. Get into carrying out a Technology Alternative Studies (TAS) on the patent.
2. Carry out a patent valuation study
3. Get into a discussion/negotiation with the Patent holder to acquire the
technology or pay a royalty
Please understand the extent of threat that your field is facing due to
patent system becoming more pronounced and India becoming a Big
Globally lucrative market.
Our defence is in our hands..
March 23, 2014 9© Crafitti Consulting Private Ltd.

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Intel’s Ex-CEO
March 23, 2014 10© Crafitti Consulting Private Ltd.
PARANOID!

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TRIZ – Inventive-Problem Solving by
Altshuller
Teoriya Resheniya Izobreatatelskikh Zadatch
• 1946 Patent
Officer in Russian
Navy
• Discovered
patterns in
patents,
published paper.
Sent to Gulag
• 1954 released,
analysed
2,500,000 patents
• Identified what
makes a
successful patent
• 1956-1985 TRIZ
formulated
• Same Problems and Solutions appear repeatedly in different
industries (Myth: My field is Unique )
• There are a series of recognizable evolution paths for all technical
systems (Myth: Evolution is Completely Random)
• Innovative solutions used theories outside their own area/industry
(Myth: Innovation happens through Deeper Knowledge)
• The most powerful solutions uncover and eliminate contradictions
(Myth: Optimization is the Focus)
TRIZ itself does not solve problems.
Problems are solved by people.
TRIZ teaches how to solve problems.

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5 Levels of Inventions
March 23, 2014 ©12
• Pioneering Invention – based on newly discovered phenomenon
• Pushing existing technology to a higher level
• Revolutionary
Level 5 (<0.3%)
• New System Developed
• Interdisciplinary solutions
• Replacing old technology with New
Level 4 (< 4%)
• Radical change or elimination of one principal system component
• One Engineering Discipline
• Resolution of a physical contradiction
Level 3 (19%)
• Slight Modification of the system
• Knowledge from different areas within the industry
• Resolution of a technical contradiction
Level 2 (45%)
• A simple improvement
• Knowledge within the trade
• No system conflicts are resolved
Level 1 (32%)

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WHAT IS THE LEVEL OF YOUR INVENTION?
QUANTIFYING THE LEVELS OF INVENTION
March 23, 2014 13© Crafitti Consulting Private Ltd.
APPLE Filed this
patent in 2005

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Crafitti’s Level of Invention Tool
Key Changes described in this patent compared
to prior art
March 23, 2014 14© Crafitti Consulting Private Ltd.

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March 23, 2014 15© Crafitti Consulting Private Ltd.
Crafitti’s Level of Invention Tool
How long will it survive?

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Quantifying the Height of Inventive Step –
Using Lines of System Evolution
March 23, 2014 16© Crafitti Consulting Private Ltd.

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Claims
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Identify System Hierarchy
March 23, 2014 21© Crafitti Consulting Private Ltd.
Cattle/Cows, Feed, Drinking, People to feed the
cows,
Owner/Manager, Type of feed, Preparation of
the Feed, Delivery/Management of the Feeding
process, Other cows in the dairy
Constituents of the feed, amount of food,
amount of water

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Identify Problem in the existing system
March 23, 2014 22© Crafitti Consulting Private Ltd.
• Inefficient Daily distribution of food ingestion
by animals,
• Low Amount of water drunk by animals
• Digestive disorders such as acidosis or bloating
Food for the cattle is given one time of the day
and there is no control on how much each cattle
eat during the day
Feed is more than the capacity of
eating/digesting, There is no time for the cattle
to drink water as it keeps on eating

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Key Changes proposed in the Patent
March 23, 2014 23© Crafitti Consulting Private Ltd.
Feed-Additive capsicum oleorasin added to the
feed
Produces irritation and heat sensation in the stomach hence leads
to less food intake and a second peak of more food intake
Leads to more drinking of water
No need to manage the distribution of food
intake throughout the day
Healthy animals
Process of MicroEncapsulation of the new addititive
Flexibility to release the chemical (capsicum
oleorasin) to specific part of the digestive track of
the animal

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Quantify the Level of Invention
March 23, 2014 24© Crafitti Consulting Private Ltd.

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“Life” of Invention for various inventiveness
levels
March 23, 2014 25© Crafitti Consulting Private Ltd.

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Life of Invention Curves
March 23, 2014 26© Crafitti Consulting Private Ltd.

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Traditional methodologies to value patent
• Cost based approach
• Market based approach
• Income approach
• Black scholes model
• Relief from royalty method
• Competetive advantage method
• Fair market value
• Valuation using multiples

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Patent Valuation Using Crafitti’s Multi-
Dimensional Multi-Perspective (MDMP)
Valuation Methodology
• 4 Key Pillars of Our
Holistic Approach
– TRIZ
– Social Network
Analysis
– Scenario Planning
– Analytic Hierarchy
Process (AHP)
• Multi-Dimensional
Multi-Perspective
Methodology
March 23, 2014 ©28

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Crafitti Multi-Dimensional Multi-Perspective
(MDMP) Valuation Methodology for a Patent
March 23, 2014 ©29
Current State of
the Patent/
Patent Value
Indicators
Citations
backward/
forward
Maintenance
levels/ Legal
Status
Technical
Description
Family
Size
Claims
Length/Breadth
Remaining
Life
Assessing the Patent Using
Theory of Inventive Problem
Solving (TRIZ) – A Unique
Proposition
TRIZ Level of Invention
77% of inventions are at Level 1 or 2,
19% at Level 3, 4% at Level 4 less than <
0.3% at Level 5, Higher Level means
higher Valuation
TRIZ Laws of Evolution
9 Laws have been identified. Based on
the position of patent on each of these
laws it is possible to ascertain the
strength of the patent
TRIZ Function and
Resources Analysis
How does various parts of the invention
combine to perform the function and
how much resources have been utilized
help in understanding the strength of
Invention

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COMPARING APPLES WITH ORANGES – AN EXPOSITION OF
AHP
 Similar to Decision Matrix approach but
allows a wider range of values in
comparison of alternatives
 Developed by T.L. Saaty (1980)
 AHP invites pair-wise qualitative
comparisons
 The problem is organized as a hierarchy

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March 23, 2014 31© Crafitti Consulting Private Ltd.
STRENGTH OF NEW CONCEPTS
NOVELTY BUSINESS VALUE FEASIBILITY
C1 C2 C4…..

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Crafitti Multi-Dimensional Multi-Perspective
(MDMP) Valuation Methodology for a Patent
March 23, 2014 ©32
Current State of
the Patent
Future State of the
Patent
Historical Factors
related to the
invention/Patent
Current State of
sub-systems,
components and
parts that make-up
the patent
Future State of sub-
systems,
components and
parts that make-up
the patent
Historical Factors
related to
components and
sub-systems
PAST PRESENT FUTURE
Current State of
Technology, Market
and Competition
Future Scenarios
in Technology,
Market and
Competition
History of
Technology, Market
and Competition
SubSystemSystemSuperSystem

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Scenario Writing and Thought Experiments
(understanding something about something in future)
33 ©
Scenario Writing: Description of sequences of
events for thought stimulation on potential crisis and
to anticipate future. Usually include plausible, but
unexpectedly important situations and problems that
exist in some small form in the present day.
Thought Experiments: the process of
employing imaginary situations to help us
understand the way things really are. The
understanding comes through reflection upon
this imaginary situation.
Crafitti Approach Combines Scenario Writing with Thought Experiments
During the Idea Crafting Engagement for one
of the world’s top three financial data
provider, four global scenarios were written
and future initiatives played out in each of
Global scenarios as thought experiments to
rank order the initiatives

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An Integrated Approach – ALVIS THINKING
ALVIS
Value Thinking
(Minimize Waste –
Maximize Value)
Inventive
Thinking
(Ideality – Functions
– Resources)
Systems
Thinking
(Holistic Approach
– Exploring
Complexity)
March 23, 2014 34
Analytical
Thinking (Divide
complexity into
multiple solvable
problems )
Logical
Thinking
(Informal and
Formal Reasoning)

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TECHNOLOGY ACQUISITION
• CLOSELY LINKED TO
PATENTS
• BE AWARE OF
PATENTS IN YOUR
FIELD
• SYSTEMATIC
PATENT WATCH
• PATENT VALUATION IS
VERY DIFFERENT FROM
A COMPANY VALUATION
• SCOUT SELECT
SYNERGIZE THE
TECHNOLOGY THAT YOU
NEED

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Thank You
Crafitti Consulting Pvt Ltd |www.crafitti.com
(navneet.bhushan@crafitti.com
Innovationcrafting.blogspot.com)
+91 9902766961
©
Navneet Bhushan
navneet.bhushan@crafitti.com