Innography Webinar Freedom to Operate (FTO)

©2015 INNOGRAPHY, INC. :: CONFIDENTIAL 1©2015 INNOGRAPHY, INC. :: CONFIDENTIAL SEPTEMBER 15, 2015
Freedom-to-Operate Misnomer:
Methods of Providing an
Opportunity Analysis

©2015 INNOGRAPHY, INC. :: CONFIDENTIAL 2
Host and Participants
• Sr.
Data
Expert
at
Innography
• Host
of
today’s
webinar
Maneesha Joshi (MJ)
• Partner
of
Cesari
&
Reed,
LLP
Michael Reed (MR)
To watch the full
webinar, click here.

Introduction
We will discuss:
•  The “Freedom-to-Operate” misnomer and alternative
ways for data and research collection to gain an
upfront advantage
•  What “Opportunity Analysis” is.
•  A practical example of how to perform this type of
analysis efficiently.

The Largest Issue with
Freedom-to-Operate

“In
our
view
the
preparaCon
of
a
Freedom-‐to-‐Operate
study
begins
with
an

understanding
of
what
the
client
is
doing,
what
the
product
details
are
and
so

forth
and
do
you
have
to
use
that
informaCon
to
search
through
the
prior
art
and

figure
out
where
the
land
mines
might
live,
and
part
of
the
problem
with
that
is
a

lot
of
imperfecCons.

Those
imperfecCons
exist
not
only
in
the
lexicon
of
the
patents
but
also
in
our

understanding
of
the
product
at
the
Cme
when
the
request
for
Freedom-‐to-‐
Operate
is
made.
A
lot
of
Cmes
the
company
is
in
the
middle
of
a
research
and

development
Cmeline
and
the
product
details
are
sCll
in
flux.

So,
at
the
end
of
this
research
and
analysis
there
is
a
product
that
is
based
on
an

imperfect
understanding
of
a
product,
an
imperfect
picture
of
the
prior
art,
and
it’s

dependent
on
so
many
things…We
are
limited
in
our
searching
parCcularly
when

it’s
a
new
technology
area.
It’s
not
always
clear,
if
it’s
new
to
us
or
if
it’s
new
in

general,
if
it’s
truly
a
new
invenCon
it’s
going
to
be
hard
to
figure
out
what’s
out

there,
but
if
it’s
something
that’s
new
to
us
as
well
we’re
starCng
from
a
learning

curve
to
try
to
get
up
to
speed
to
figure
out
where
to
start.”

Mike Reed:

“There’s
also
incomplete
access
to
data
sources.
SomeCmes
you
can
ﬁnd
a

Ctle
or
an
abstract
but
unless
you
have
full
access
to
the
IEEE
Journal

ArCcles
whatever
it
is
you’re
searching
you
may
or
may
not
be
able
to

evaluate
the
relevance
of
the
enCre
document.
There’s
also
the
limited

understanding
or
snap
shot
of
the
product
or
business
strategy…The
risk

in
the
analysis
and
all
of
that
can
hinge
a
liTle
bit
on
what
the
ﬁve
year

goal
is
or
ten
year
goal.

The
other
limit
is
the
caveats
and
disclaimers
that
would
go
at
the

beginning
of
any
such
freedom-‐to-‐operate
study…by
the
Cme
you
get

done
with
all
these
caveats
it’s
not
worth
the
paper
it
was
wriTen
on.
At

the
end
of
the
day,
our
view
is
that
the
freedom-‐to-‐operate
is
a
misnomer;

it
has
very
limited
applicability.”

Mike Reed, continued:

Alternative Practice: Opportunity Analysis
MR:
“The
way
that
we
typically
handle
the
opportunity
analysis
is
not
that

diﬀerent
from
how
you
would
start
with
the
freedom-‐to-‐operate,
is
that

you
would
start
with
an
iniCal
search
that’s
based
on
the
informaCon
you

have
about
the
product
or
idea.
What
we
typically
do
is
accommodaCon
of

key
word
searches,
semanCc
searches
and
so
on
to
create
a
set
of

documents
that
we’re
going
to
start
with,
and
then
we
do
some
text

clustering
on
the
contents,
abstract
Ctle,
and
someCmes
claims
depending

on
how
we
want
to
work
this.”

MR:
“From
the
text
cluster
you
can
see
some
keywords
that
can
not
only

provide
some
ideas
but
can
also
point
you
to
some
of
these
potenCal
land

mines
that
you
would
be
concerned
about.
AddiConally
then
from
that

text
cluster
and
from
the
data
set
that
was
used
to
make
the
text
cluster

we
will
do
some
Cme
slicing

and
different
types
of
slices
and
by
that
I
just

mean
that
we
take
a
look
at
filing
dates
or
publicaCon
dates
for
those

parCcular
applicaCons
and
kind
of
get
a
sense
for
Cmeline
trends;
which

companies
are
doing
what,
at
what
Cme,
and
how
liCgious
those

companies
are,
and
then
we
look
for
some
gaps,
not
only
when
things

were
being
filed
but
in
terms
of
the
content
in
parCcular
spaces.”

Alternative Practice: Opportunity Analysis, continued

Example: Pet Toy Industry

“Pet Toys” as the Keyword Search for IP
MJ:
We
looked
at
the
market,
the
expenditure
and
the
breakdown

of
the
expenditure,
the
IP
from
a
keyword
search,
the
number

of
acCve
patents,
expired
patents,
priority
date,
trends,
top

companies,
the
players
in
this
market,
the
revenue,
liCgaCon,

the
IP
landscape
comparison,
and
then
the
patent
landscape

itself
using
text
clusters,
and
PatentScape
in
Innography
to

figure
out
Cme
trends
and
then
drill
down
into
the
text

clusters
to
hopefully
find
white
space
potenCal.
We
also

looked
at
liCgaCon;
plainCffs,
defendants,
Cmelines
of

liCgaCon,
patent
transfers,
the
buyers
and
sellers
of
patents
in

this
space,
and
finally
trademarks.

So
let’s
start
with
some
market
data.
And
what
I
pulled
here
was
pet
industry
market
report

from
APPA
which
is
I
believe,
“American
Pet
Products
AssociaCon”,
and
what
we
see
here
are

U.S.
pet
industry
expenditures,
this
is
what
people
spend
on
pet
products.
This
is
in
billions
of

dollars
and
in
the
last
twelve
years
it’s
doubled
from
about
thirty
billion
to
sixty
billion.

When
you
look
at
the
breakdown
of

expenditures,
this
is
again
U.S.
dollars

in
billions
for
2014
you
have
food

followed
by
pet
care,
then
I
guess

supplies
and
toys
fall
into
that
bracket

there.
That’s
up
to
almost
ﬁ]een

billion
for
last
year.
So
what
we
next

did
was
did
a
search
for
IP
using
the

simple
keyword
“pet
toys”
you
can
do

this
on
the
internet
you
know
using

Google
patents.
What
ends
up

happening
is
you
receive
thousands
of

results
and
making
sense
of
this
can

MJ:
be
quite
a
challenge
and
it’s
very
handy
to
have
tools
and
so]ware
that
can
aggregate
this

data
and
give
you
insights
into
the
data
right
away.

MR
There
are
two
things
I
want
to
point
out

here.
One
is
that
doing
the
pet
toy

search
-‐-‐
on
Google
patents
they
do

more
of
a
social
voCng
sorCng
rouCne

that’s
based
on
what
other
people
have

selected
and
what
other
people
have

found
to
be
relevant,
that’s
what
comes

up
on
the
surface
in
the
order
you
see
it

so
those
may
or
may
not
be
relevant
to

what
you’re
looking
at.
The
second

thing
is
-‐-‐
it’s
my
understanding
that

Google
actually
minds
their
data
and

they
are
also
one
of
the
largest
patent

fillers
if
you
go
and
look.
So
that
last
thing
I
would
want
to
do
if
I
was
going
to
invent
in
this

space
is
Cp
them
off
in
terms
of
the
details
of
what
I
was
invenCng.
From
a
pracCcal

perspecCve
when
we’re
doing
the
search
we
do

some
limited
searching
in
Google
just
to

see
what
surfaces
because
someCmes
that
provides
useful
seed
data
for
other
search

tools,
but
we
typically
don’t
search
really
detailed
stuff
using
their
tool
because
we
don’t

want
to
Cp
them
off.

PriorityYear Trend (1996-2014)
MR:
What’s
interesCng
to
note
here
is
that
this
informaCon
may
also
reflect
or
at
least
the
down

trend
in
U.S.
may
reflect
the
elecCon
not
to
publish,
because
in
the
U.S.
if
you’re
not
planning

to
file
foreign
applicaCons
if
you
choose
non
publicaCon
it
remains
secret
and
therefore

wouldn’t
show
up.
Worst
thing,
a
lot
of
smaller
clients
who
have
no
intenCon
of
filing

overseas
doing
that
is
an
opCon
for
strategic
advantage
and
so
it’s
possible
that
may
be

reflected
here.

PriorityYear Trend (1996-2014), continued
MJ:
So
we
have
U.S.
Grants
and
U.S.
ApplicaCon
that
seem
to
show
a
kind
of
steady

trend
but
it’s
probably
declining
in
the
last
two
to
three
years.
The
other

jurisdicCons
definitely
show
a
downward
trend.
However
the
Chinese
applicaCons

and
Chinese
grants
have
seen
a
preTy
sharp
increase
of
patents
in
this
space.
I
was

wondering
what
was
happening
with
the
Chinese
patents
and
there
has
been
a

rapid
rise
in
patent
applicaCons
filed
in
China.
Twenty
six
percent
over
one
year,

this
was
in
2013
I
think,
this
is
because
the
Chinese
government
has
provided

financial
incenCves
to
support
patent
filings
by
Chinese
enCCes
and
that
has

probably
resulted
in
a
sharp
spike.
All
these
patents
-‐-‐
most
of
these
patents
are

filed
in
China.
One
other
thing
that
I
didn’t
menCon
was
in
my
iniCal
search,
most

of
the
patents
that
came
back
in
the
search
were
expired.
I
think
it
was
two
thirds

to
one
third
split
of
expired
to
acCve
patents.

Top 20 companies
Keyword (pet or dog or cat) and toy – active patents
0

10

20

30

40

50

60

70

80

Alternative: Bubble Market Map
Top 20 Companies – Market Map
Keyword (pet or dog or cat) and toy – Active Patents

MJ:
What
I
have
next
here
is
what
we
call
a
bubble
market
map

generated
in
Innography.
It
takes
all
the
top
companies
and

puts
them
into
four
quadrants,
what
we
have
are
proxies
for

vision
of
the
company
versus
resources
of
the
company.
If
you

have
a
company
in
the
top
right
quadrant
it’s
a
company
with

a
lot
of
resources
as
well
as
vision.
What
we
have
here
is

Doskocil
in
the
boTom
right
where
it
is
a
visionary
in
this
area

in
spite
of
not
as
many
resources
as
the
other
companies
in

this
list
here.

Alternative: Bubble Market Map, continued

MJ:
So
another
technique
available
to
us
in
Innography
is
text
clustering,
it
takes
the

patents
and
finds
the
most
frequently
occurring
text
clusters
and
groups
them.

You
can
drill
down
into
these
clusters
and
what
I
have
here
is
just
to
illustrate
what

can
be
done,
it
takes
a
bit
of
Cme
and
analysis
to
actually
drill
down
and
find
what

you
are
looking
for.
But
one
technique
to
use
to
get
at
your
white
space
is
to
go

down
into
the
smaller
clusters
and
hopefully
find
something
in
an
area
where

there
are
very
few
patents
and
that
might
give
you
clues
as
to
your
white
space.

MR:
Animal
toys
-‐-‐
pet
toys
are
preTy
straight
forward
and
simple
but
if
you
look
into

these
text
clusters
you
start
seeing
interacCve
toys,
toy
vehicles
and
inside
of

those
when
I
drilled
down
through
these
clusters
I
was
seeing
piezo-‐electric

elements
and
all
kinds
of
sensor
technologies,
small
control
circuits
and
all
kinds
of

other
things
were
somewhat
unexpected
in
the
dog
toy
market.

Alternative:Text Clustering

Pet Toys:Text Clustering
Reﬁne
using
keyword
ﬁlters
and

operators
or
semanCc
searching

General
keyword
search

MJ:
“One
other
way
of
visualizing
this
text
clustering
is
by
a
PatentScape
and

this
again
gives
you
the
most
frequently
found
keywords
in
your
patents

and
the
larger
the
text
and
the
bigger
the
area
there
are
more
patents

under
that…Another
technique
you
can
use
is
to
over
lay
on
this
Cme

slices
so
you
look
at
patents
ﬁled
only
within
certain
years
or
year
ranges.
I

didn’t
pick
up
too
much
informaCon
but
perhaps
there
are
other
areas

where
you
can
actually
disCnctly
see
technology
trends
moving
away
from

a
certain
group
to
another
group…
what
we
can
also
do
is
overlay
on
this

PatentScape
the
top
ﬁve
companies
with
patents
in
each
of
these
areas.

So
again
we
see
Doskocil
Manufacturing
Company.
The
takeaway
from

this
I
guess
is
it
helps
you
get
a
feel
for
which
company
is
focused
on

which
sub
area
so
to
say.”

Alternative: PatentScapes

PatentScape Visusalization
(using basic search)

PatentScape Visusalization
(Top companies using basic search)

PatentScape drill down
(small clusters for new/sparse areas – 2000 to 2014)

PatentScape Time Slices
(evolving technology keywords – 2000 to 2014)

MR:
“Everybody
always
thinks
about
IBM
and
so
on,
but
individual
inventors

account
for
a
larger
percentage
than
any
one
of
those.
So
a
lot
of
what
we

were
just
showing
is
examples
of
the
data
that
are
found
when
you’re

looking
for
starCng
with
a
starCng
point
of
“here’s
a
product
we’re

thinking
about
making”
and
we
go
and
do
a
prior
art
search
and
we
look
at

what
we
ﬁnd,
not
only
what’s
in
there
but
what
pieces
of
the
technology

are
already
in
the
prior
art.
Two,
who
are
the
companies
and
the
players,

what
kind
of
liCgaCon
history
do
they
have,
and
so
on
and
we
start
looking

at
all
of
those
pieces.
So
all
of
this
is
part
of
an
analysis
that
begins
with,

‘Hey,
we’re
going
to
try
to
make
this
product...
If
I
were
actually
invenCng

in
this
space
and
I
was
looking
at
this
art
I
might
also
be
looking
at
what

didn’t
work
or
what
would
not
work
in
a
parCcular
invenCon
and
seeing
if
I

can
solve
it
because
the
soluCon
to
those
problems
may
be
separately

patentable.’”

Risk Mitigation – Litigation Trends –
Plaintiffs
(@patentClaims (pet or dog or cat) and toy - 38 cases)
23%

13%

10%

8%

5%

5%

5%

3%

3%

3%

3%

3%

3%

3%

3%

3%

3%

3%

3%
3%

Our
PET'S
Company
Think
Tek,
Inc.,
Nevada

OpCgen
LLC
The
Kong
Company,
LLC

Mann
Design
Ltd.
Swag
Company
Inc

JW
Holding
GmbH
Ethical
Products
Inc

Louis
W.
Randall
Christopher
Weiberg
PA

Alan-‐Lee
Distributors,
Inc.
Central
Garden
&
Pet
Company

CB
Worldwide
Inc
California
Truseal
Technologies,
Inc.

Jeﬀerson
Rubber
Works,
Inc.
Margherita
Arvanites

Clip
Ventures
LLC
VIP
Products
LLC

Petsport
USA,
Inc.
The
Kroger
Co.

Litigation Trends – Defendents
(@patentClaims (pet or dog or cat) and toy)
16%

14%

8%

5%

3%

3%
3%
3%

3%

3%

3%

3%

3%

3%

3%

3%

3%

3%

3%

3%

3%

3%

3%

3%

3%

%
Cases
per
Defendant
(Top
25)

PETCO
Animal
Supplies
Inc

The
Kong
Company,
LLC

Sowell
&
Co.,
Inc.

Vo-‐Toys,
Inc.

Ethical
Products
Inc

Alan-‐Lee
Distributors,
Inc.

ASA
PET
SUPPLIES
INC.

Mistral
Equity
Partners
LLC

Advanced
Decoy
Research,
Inc.

Megatech
InternaConal,
Inc.

Triple
Crown
Media,
Inc.

Van
Sorrel
Enterprises
Co.
Ltd.

Our
PET'S
Company

Pet
Zone
Products,
Ltd.

Central
Garden
&
Pet
Company

Phydeaux
Enterprises,
Inc.

GGK
DistribuCon
LLC

PetEdge
Inc

MulCpet
InternaConal,
Inc

Petstages,
Inc.

Animal
GeneCcs,
Inc.

VIP
Products
LLC

CenCnela
Feed,
Inc.

Radio
Systems
Corp

GeneCc
Veterinary
Sciences,
Inc.

Litigation in the Pet Toy Industry, continued
MR:
A
large
number
of
successful
companies
don’t
necessarily
have
patents
in
this
space,
but
the

quesCon
I
would
then
have
a]er
I
find
these
is
have
any
of
these
guys
been
sued,
because

most
likely
they
haven’t.
They
probably
either
aren’t
on
the
radar
screen
of
a
larger
company

yet
or
they
aren’t
doing
something
that
infringes.

MJ:
These
are
the
companies
involved
as
plainCffs
in
these
cases
we
have
Our
Pets
Company
and

I
think
we
saw
this
in
our
top
twenty
companies
with
patents
in
this
area.
There’s
Think
Tek,

OpCgen,
The
Kong
Company
when
I
generated
this
Mike
came
back
to
me
and
said
“This

doesn’t
paint
the
whole
picture
because
o]en
people
counter
sue”
so
we
went
ahead
and

did
another
analysis
on
the
defendants
on
this
case
and
sure
enough
there
are
the
same

parCes
found
in
the
plainCffs
are
in
the
defendants.
I
don’t
have
a
visual
for
that
but
in

Innography
when
you
go
to
a
case
you
can
quickly
figure
out
the
plainCffs
and
defendants

and
then
you
have
a
counter
defendant
there.

MR:
…In
terms
of
risk
that
was
one
of
the
bigger
indicators.
If
it’s
an
industry
where
there
are
a
lot

of
players
and
they’re
constantly
suing
each
other,
there’s
a
high
risk
industry
you
have
to

spend
a
lot
more
Cme
worrying
about
what
your
compeCtors
are
doing,
what
their
art
might

be.
In
an
industry
like
this
it’s
a
liTle
less
concerCng
unless
you’re
right
on
top
of
somebody.

MJ:
There’s
one
other
data
slice,
as
I’d
like
to
say
that
you
can
look
at
and
that’s
patent
transacCons.
So
I

picked
this
data
up
from
patent
market
tracker
that
Innography
delivers
every
month
and
what
we
do
is

we
look
at
patent
transacCons
between
company
to
company.
We
remove
patents
assignments,

securiCzaCon,
and
only
look
at
intercompany
transacCons,
and
I
examined
the
last
five
years
of
data
for

pet,
and
toy,
and
the
Ctle
and
came
back
with
five
intercompany
transacCons.
And
we
have
our
Doskocil

Manufacturing
Company
here
again.

Assignor
Assignee
Patents
Year
Title

TUFF
ENUFF

PET
PRODCTS,

INC.

SJ
ASSETS,
LLC
US8186309
,
US795032

2011
Pet
Toy

MUNCHKIN,

INC.

DOSKOCIL

MANUFACTURING

COMPANY,
INC.

USD55046
0

2011
Pet
chew
toy

brush

THE
DUBLIN

DOG
COMPANY

REMINGTOM
ARMS

COMPANY,
LLC

USD61393
13,

USD61436
5

2012
Pet
toy

BERGAN,
LLC
COASTAL
PET

PRODUCTS,
INC.

USD66267
5

2015
Pet
toy
with

capCve
chase

ball

MR:
This
actually
goes
back
for
our
firm
when
we
are
doing
this
sort
of
opportunity
analysis,
if
it’s
for
a
small

company
that’s
wanCng
to
be
acquired
this
is
something
we
look
at
to
also
assist
them
in
having
kind
of

managing
their
own
expectaCons.
If
this
isn’t
an
industry
where
there
are
a
lot
of
acquisiCons
of
assets

they
at
least
need
to
know
that.
Then
they
want
to
know
who
is
doing
the
acquiring
and
what
sort
of
thing

are
they
acquiring
because
that
may
influence
design
decisions
or
patent
decisions.

MR:
One
thing
about
the
trademark
search,
and
we
do
this
a

lot
of
Cmes
too,
to
idenCfy
potenCal
not
only

acquisiCon
targets
but
acquirers
because
who
is
making

toys
and
the
goods
and
services
as
a
pet
toy
because

you
know
that
gives
us
a
more
targeted
search
to
see

you
know
“what
are
they
doing,
what
does
their
art

look
like?”
So
when
we’re
doing
those
sorts
of
searches

on
the
back
end,
we’ll
do
this
upfront
to
make
sure
that

we
have
a
full
collecCon
of
patent
literature.

MJ:
So
one
other
search
I
did
in
Innography
was
a

trademark
search
because
o]en
Cmes
I
have

come
across
companies
that
have
no
patents

but
do
have
trademarks.
So
I
did
a
search
on

the
trademark
Ctles
for
pet,
and
toy
and

again
here
you
see
there’s
a
bunch
of

individual
inventors,
looks
like
because
the

owners
are
just
inventor
names,
a
few

companies
thrown
in
there
again.

Trademark Search

Freedom-to-Operate Misnomer:
Methods of Providing an
Opportunity Analysis
Watch the complete
webinar here.

Innography Webinar Freedom to Operate (FTO)

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