Surprisingly, Patents Reveal Business, Technical
and Legal White Spaces

Perhaps the most significant promise of patent landscaping is known as "white space" analysis. White spaces are simply unexploited opportunities that are identified by detecting gaps in data. By recognizing and acting on critical white space opportunities in patent data, savvy players can reveal weaknesses of competitors, create insurmountable legal barriers around high-margin products and markets, and anticipate future technology disruptions.

It may be surprising to some that patents contain the secrets to unearthing these critical white spaces. In the right hands, patent databases paired with algorithmic "screening" techniques can reliably lead to detection of high-value white spaces, indicate the significance of an opportunity and even provide recommendations tailored to the inquiring party's unique needs.

The White Space Matrix™

To illustrate the types of white space opportunities discoverable in patent landscapes, Perception Partners has created the White Space Matrix™. This diagram depicts white space opportunities in three areas over three time horizons. Click to enlarge



Business White Space Opportunities

Perhaps the most valuable use of white space analysis in patents is to reveal unexploited business opportunities. Corporate and Business Development professionals often rely on this technique to uncover areas for consolidation, whether by license, sale or purchase. Acquisition of high quality patent portfolios - or companies, if the portfolios cover a majority of their margins and revenues - can bring near-term accretive value to acquirers who have an edge in understanding the true value.

In the short term, emerging markets drive executives to extend product offerings into advanced stages of their value chain. For example, a manufacturer of lower-margin carbon nanotubes may seek to produce higher-margin nanotube-based electrically conductive films. White space analysis of patents may unearth technologies to acquire or reveal workarounds or benefits where no patent protection yet exists. The result: differentiated offerings in high-value, high-growth segments.

In the long term, white space analysis in patents can mitigate the risk of disintermediation. Patented technologies, if commercialized by small firms that are only limited by lack of capital, could one day present significant threats to larger organizations and eventually destroy long term competitive advantages. Future threats of disintermediation may come from GPS technologies that could eliminate pricey route-planning systems or from biomarkers that could render obsolete a range of manual, time consuming diagnostic tests. No matter the industry, small firms with big ideas can be detected with white space analysis and can be the key to building intelligent barriers to inevitable shifts in customer behavior.

Technical White Space Opportunities

A common use of white space analysis in patents is to discover technological strength and weakness. R&D and Product Development professionals regularly turn to patents to improve chances in product commercialization. White space analysis can reveal areas in which licensing or acquiring technologies provides for a faster or less expensive route to market. White space analysis in patents also aids commercialization success because patents tend to reveal perceived weaknesses across product or service offerings.

In the short term, innovation shifts create uncertainties requiring the evolution of R&D strategy or the need to partner with other organizations. For example, in the emerging alternative energy industry, incumbent gas and oil producers are partnering extensively with small businesses in technical areas as diverse as ethanol production, biomass gasification and algae farming. White space analysis can disclose how to attract a beneficial partner or how to develop an innovation strategy to respond to a high-powered partnership that is underway. Detecting white spaces in this way can also benefit investors who are speculating on winners and losers.

White space analysis can also detect who may gain an advantage in the long term due to technology disruptions. Technologies that are aimed at non-consumers, or those aimed at mainstream customers ignored by established players, are typically viewed as disruptive. Examples include flash memory, which is durable and less expensive but far smaller than alternative data storage solutions; also consider light-emitting diodes, which began as low cost indicator lights but which have emerged as smaller and less power-consuming alternatives to light bulbs. Detecting white spaces by seeking patented technologies at the low end of a market, or aimed at providing today's benefits to tomorrow's imminent customers can bring long term rewards to informed users of this approach.

Legal White Space Opportunities

All patents reveal some aspect of portfolio building, often involving the efforts of External or Corporate IP Counsel. White space analysis in this context reveals near term opportunity by comparing invention disclosures or fledgling products to known or unknown patent threats. Efforts typically revolve around understanding what is novel, or where firms can obtain freedom to operate. Identifying white spaces at this stage is the key to building a high value patent portfolio that provides the certainty required to sustain investment in technically-focused products.

In the short term, standards pools can present opportunities to monetize rights that may not be effectively leveraged in a separate patent portfolio. Technologies in digital video, telecommunications and RFID are all linked to standards, and patents covering aspects of those standards have been pooled for bulk licensing. Analyzing white spaces to identify emerging standards or to identify patents that read on established standards can build additional revenues and reputational strength for otherwise latent legal assets.

A significant long term risk - but also an opportunity - is the growth of legal thickets. Extraordinary growth of granted patents with vague claims, overlapping rights and huge disclosures increase fear and hinder expansion in hot industry areas. Whether in data compression, nanotechnology or biopharmaceuticals, thickets are emerging not just in the US but in accelerating regimes such as Korea and China. The white space in this area is simply certainty. By increasing certainty through evidence that wins court or administrative rulings (though often taking years to reach final adjudication), white space analysis provides significant long term benefits.

Conclusion

White space analysis promises important insights for R&D professionals, business development professionals, IP counsel and investors. Therefore, efficient detection of critical white spaces in the White Space Matrix has enormous financial and strategic value. By effectively integrating subject matter expert teams, business intelligence tools and algorithmic techniques, white spaces can be efficiently detected on a recurring basis. White space analysis is a formidable tool to aid any organization in its quest for long-term competitive advantage.

Please contact us to learn more about the Perception Partners White Space Matrix, or consider taking advantage of our limited offer below. Allow us to help you quickly understand the opportunities and risks in your area of interest.