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Disruptive vs. Incremental innovation - making a patent strategy
Adv. Roy Melzer| Patent Attorney | Ehrlich & Fenster
How/whether to balance between Potentially Disruptive innovation and Incremental
innovation in a patent portfolio ?
Patenting Incremental/Sustaining Innovation – inventions for improving upon an existing technology within an industry.
Patenting Potentially Disruptive/Revolutionary Innovation – inventions for a new technology that potentially disrupts a market by replacing a supply network of an existing technology
Action Effect Knowledge
As viewed by a patent attorney– A technical solution that has almost nothing in common with existing technical solutions.
The desired effect of potentially disruptive innovation
Incremental and Disruptive innovation combined
Tries to make a change for more than a decade but passed by incremental innovation
Why Incremental?
Given that disruptive innovation is hard to manage (although sometimes easy to create), winning is difficult and rare. There is a good living to be made managing an evolutionary process of frequent incremental improvements.
Why potentially Disruptive?
Opportunity to own rights to distribute a “must have” license and to control a gateway to a performance leap.
How should universities balance between potentially disruptive and incremental innovation?
Common allocation - Static allocation – rule of thumb (e.g. 50/50).
The suggested allocation – dynamic allocation based on empirical parameters.
A suggested empirical parameter for patenting incremental innovation - Pace of Technology Change.Pace of Technology Change is reflected by:- Patent filing trends (number of filings, number of Applicants/Inventors), - Article publication trends,- Analysis of searches (e.g. may be identified by Big Data).
Pace of patentallowance
Pace of Technology Change
Histogram showing Years in prosecution
• Although it does not guarantee against loss, diversification is the most important component of reaching long-range financial goals while minimizing risk.
• Achieving optimal diversity is similar to adding the 20th stock to a portfolio. The average standard deviation (risk) of a portfolio of one stock is 49.2%, while increasing the number of stocks in the portfolio could reduce the portfolio's standard deviation to a maximum of 19.2%. Adding stocks over 20 to 1,000 only reduce the portfolio's risk by about 0.8%.
An empirical parameter for patenting potentially disruptive innovation - Diversification
• In a patent portfolio: – Empirical parameter for patenting incremental
innovation - Pace of Technology Change.– Empirical parameter for patenting potentially
disruptive innovation - Diversification in technology suitable for different markets/industries.
• Past successes or failures of patenting potentially disruptive innovation are not an indicative of future results.
• Consider stop renewing patents when the Technology changed too fast
Summary
