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Patent valuation for technology transfer – Part 1

Interview with Alan Engel, President at Paterra, Inc. and international advisor for technology transfer at the Japan Science & Technology Agency.

ipe:    Alan, the valuation of patents and intellectual property in general is gaining increasing attention recently. You are an advisor on technology transfer, what's your take on this topic?
Alan:    Let me start with a short background. When I did postdoctoral research at Sophia University Tokyo in the 1980s, there was a traditional employment/technology transfer system widely practiced in the background.
Perhaps the most important role of a Japanese professor was to get his students jobs. When students selected the professors under whom they would do their theses, the ability of the professor to get them a job at a top company was an uppermost consideration. Professors maintained ties to major companies and, each June, these companies would assign professors each a quota of students that they wanted to hire the following April. The professor would then assign his graduating students to companies. Students did have the option of declining an assignment, but then they would be on their own and could expect no further help from the professor. By the end of July, all students knew which companies they would enter the following April.

ipe:    It seems that this system was heavily based on incentives for both the students and the companies?

Alain:    That's right, the incentives and responsibilities in this system were extremely strong and heavy: the outcomes were lifetime positions. The companies had incentive to maintain good ties with the best faculty so they would be assigned the best students. The professors had incentive to maintain good ties with the best companies so they could attract the best students into their laboratories. The students had incentive to do their best work so that their professors would assign them to the best companies. And, of course, the best students doing their best work produced the papers that built the professors' reputations.

ipe:    So, technologies were basically transferred from the academia to business via the students?
Alan:    Exactly, the technology went with the students. A company wanting a professor's output would hire students trained in that technology. Sometimes companies would hire a student, and then send him or her back to the professor's laboratory to do further work on that technology. This student would be accompanied by company-supplied funds or equipment. In one case I saw, a company provided $30,000 in lithographic masks for our laboratory's use; the student they employed got his master's and doctoral degrees - while employed by the company but working at the university in the professor's laboratory.

ipe:    What about patents?
Alan:    Patents and intellectual property in general were almost secondary to the process. There was a patent-centered technology transfer system operated by the Research Technology Corporation of Japan (now the Japan Science & Technology Agency). This system cultivated faculty who were so inclined, bringing several major technologies to commercial fruition. But its penetration was nonetheless limited.

ipe:    What does this have to do with patent valuation?
Alan:    Japan scrapped this traditional practice in the 1980s and 1990s. Few young faculty members today even know it existed. Even when I was at Sophia University Tokyo, national regulations prohibited job seeking and recruiting activities before October. This was a bit of a joke in my laboratory because every student had a job lined up by the end of July. In October, they went through perfunctory interviews for jobs that had already been decided.

ipe:    What where the consequences when the traditional practice ended?
Alan:    When this practice ended, so did the technology transfer mechanism that went with it. Japan is trying to replace it with American-style patent-centered technology transfer. Unfortunately, patents are decoupled from customary academic incentives and faculty and researchers tend to have poor understanding of patents and commercialization.

ipe:    And that is where patent valuation enters the picture?
Alan:    Exactly. As I am trying to practice it, patent valuation is a methodology for helping and educating faculty in using intellectual property to insert research into today's open innovation networks.

ipe:    Can you elaborate on your objective. Which tools do you use?   
Alan:    I consider a couple of requirements for this objective. The first requirement is that the tool be applicable when the researcher is formulating his or her research strategy and designing experiments. This requirement eliminates valuation tools based on patent citations.

ipe:    But citation metrics are used in academia for decades to quantify scientific performance. Why do you find them unsuitable for patent valuation?
Alan:    Because tools based on patent citations inherently lag research outputs by years. They also compete with established and more timely science citation tools. Faculty and researchers correctly resist efforts to impose inferior metrics based on patent citations.

ipe:    What else do you consider important requirements for a patent valuation?
Alan:    A second requirement for this objective is that the tool connects research to the essence of the value in a way that faculty and researchers can easily understand. For patents, this essence is market, for market is what patents protect. In this respect, patent valuation is market research.

ipe:    This sounds reasonable, since most patent applicants have a market in mind. What else do you consider important requirements for a patent valuation?
Alan:    A third requirement is that the tool identifies factors, other than the research itself, that affect the value of a patent, and identify these in ways that isolate them for improvement.

ipe:    Can you give examples of such factors?
Alan:    Examples for such factors that strongly affect the value of the patent would be prior art searching and market research/identification. In later posts, I will elaborate on these requirements and how they can be satisfied using the EPO’s freely distributed IPscore® patent portfolio management tool. This tool, though initially targeted toward the financial accounting community, is actually nicely suited for working with faculty and researchers in technology transfer.

ipe:    Alan, thank you for sharing this background information with us. We will continue this interview in one of our next posts.

Alan Engel founded Paterra, Inc. (initially named International Science and Technology Associates, Inc.) in 1986 after postdoctoral research in the Japan Science and Technology Agency’s ERATO project on fine polymers. After initially focusing on Japanese science and technology affairs, Paterra has provided industry with machine translations of Japanese patents since 1996. Inventor of IPC-based disambiguation in machine translation, Paterra launched the first completely automated Internet service for patent translation in 1999.

After moving Paterra, Inc. to Japan in 2007, Dr. Engel founded TT Crossroads for the purpose of developing and applying patent analytical methods to technology transfer. TT Crossroad’s current focus is developing IPscore into a free, worldwide standard for technology transfer.

1 Kommentare:

Risa Olinsky hat gesagt…

Really a great idea for patient valuation. Here Mr. Alan Engel gives a valuable things for us. Thanks writer for publishing this significant things.

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