At the beginning of 2013 I was beginning to put together an agenda for a workshop I had scheduled on patent analytics, and corporate decision making for the 2013 PIUG Annual Conference. The full-day workshop was designed for patent analysis practitioners, and in addition to providing instruction on current best practices I wanted to conclude with a case study that would tie together all the material presented with a tangible example.
At the time Apple and Samsung were just getting to some jury verdicts in their patent litigation suits, and news on patent related issues was in the headlines on a nearly daily basis. At the same time personal fitness bands, like the Jawbone Up, and the Nike+ FuelBand were beginning to gain traction in the market, and it was becoming clear that fitness monitoring was on the way to becoming a very significant business. With the market forces aligning as they were I thought that the personal fitness band landscape would make an excellent case study for the workshop I was organizing.
Long time readers of this blog will recognize Aliphcom (Jawbone) as an organization I have used in several posts to demonstrate various concepts within the patent analysis space. In July of 2013 I used the Jawbone Up portfolio to demonstrate why I don’t use extended families to count patents, in August of 2013 I used the entire Jawbone portfolio to demonstrate how I could identify just the documents associated with the Up product by using a binary classifier, and in September of 2013 I returned to the Up portfolio to explain the potential issues I saw with counting patents using the EPO Simple family concept. In the first public post in July I mentioned that the data was current as of April of 2013 since I had used this example for the workshop case study.
The case study provided examples of the following principles associated with patent analytics for organizational decision making:
- Technology teardowns – for identifying significant components and manufacturing techniques
- Financial analysis – for identifying market leaders and future potential
- Company Patent Assessments – for identifying areas were the client company and its closest competitors have patent coverage
- Industry Patent Assessment – for looking at the patent positions of the larger industry beyond the client company and its competitors
- Conclusions and Strategic Options – using the proceeding analysis to make recommendations to the client for aligning their patent strategy with their business goals
One of the conclusions I reached was that Aliphcom, and FitBit, the two companies I focused on during the Company Patent Assessment stage were likely exposed with regards to their existing patent portfolios, and that both companies should consider patent buying programs to bolster their portfolios. I suggested that this was going to become increasingly important if they were to survive a likely patent war with later entrants who were much bigger, and better funded.
The case study was completed on April 17th 2013, and presented during the workshop at the 2013 PIUG Annual Conference on April 27th 2013. In the workshop I suggested that BodyMedia had one of the best patent portfolios in the area with depth, breadth, forward citations from major competitors, and some early priority dates. After the workshop I learned that on April 30th 2013 Jawbone acquired BodyMedia for $110 million dollars. It was reported that the acquisition was primarily driven by BodyMedia’s patent portfolio, as opposed to its marketed products.
Clearly, my analysis had nothing to do with the acquisition since the materials were only made available to a small audience three days before the sale was announced, and it must have been in the works for months before I even started the case study. In any event, I was tickled by the fact that I called my shot before the actual announcement, and I continued to keep those materials for the exclusive use of my workshop customers.
Fast-forward to this past August when I was invited to provide an extended presentation during PATINEX 2014 in Seoul, South Korea. I will provide additional notes, and thoughts on the meeting in my next post, but as part of my talk I thought I would finally make a portion of the fitness band case study available for everyone. The slides from that presentation are provided below, and as suggested earlier in this post they walk through the process I use when I assist my clients in developing, and implementing patent strategies that are aligned with their business interests.
With the coming competition from the Apple Watch, and additional products arriving almost daily from competitors big and small Jawbone has its work cut out for it if it wants to remain relevant in the personal fitness monitoring space. When I originally looked Jawbone had an issue with regards to what protection their patent portfolio could provide them, but after the BodyMedia acquisition they are much better equipped to compete on an equal playing field with many of their competitors. Looking at the purchase price of $110 million dollars I would also say that considering the potential market size, and value of the BodyMedia portfolio Jawbone got a real bargain here. This is just another example of how critical it is for companies of all sizes to think critically about patent related matters, especially as their product businesses are starting to ramp up.