What is a Technology Inflection Point?[1]

 A Technology Inflection Point, or “TIP” for short, is a point in an existing technology that is important, perhaps vital, for the advancement of that technology.  It is an important criterion, or a factor, in technical development.  Some people view a TIP as a “problem to be solved”, but that view is useful only if the solution to the “problem” will boost the technology forward.

How is it possible to find a TIP?  There are at least two ways to find a Technology Inflection Point:

(1) Find a major weakness or bottleneck in an existing method or system, then ask: Would resolution of this weakness or bottleneck create a major technical advance?  If so, that is a Technology Inflection Point.  If you have, or if you can cultivate, an innovation that turns this weakness into a TIP, then you might be able to create patent value.

(2) If the technology is undergoing, or is about to undergo, a paradigm shift, then that shift is almost certainly a TIP.  One serious difficulty is this kind of shift is often well-understood and expected long before it occurs, so finding innovative concepts based on the TIP may be hard to do – there may already be competitive approaches.

Examples of TIPs[2]

1. The engine in motorized vehicles: The standard internal combustion engine, based on the four phases of fuel intake, compression, combustion, and exhaust, has been extremely valuable to humankind, but unfortunately creates serious problems which are begging for a technical inflection.  Such engines are extremely inefficient, wasting about 70% of the energy burned in heat and vibration, and they create pollution on a global scale.  A solution that will provide private transportation without the massive waste of internal combustion engines, or without the massive pollution, but at a reasonable price, would almost certainly create an inflection point.

2. Battery power in mobile devices: The world has gone mobile.  It was foreseeable, and foreseen by some, that battery power would become an increasingly important issue in the provision of services to mobile devices.  This is probably not the “paradigm shift” suggested by a new type of engine, but it is certainly a bottleneck in existing systems, and its removal could create major technical and business opportunities.  Massive investments are being made in battery technology, but no one yet knows which path will succeed.

3. Video on the Internet: With current technology, sooner or later the explosion of video on the web will cause the Internet to crash.  Although a crash appears inevitable, no one believes a crash will happen, even though everyone believes that the demand for video will continue to explode.  How can this be?  Because technologies will be developed that insure that no crash will happen.  Which technologies?  Maybe storage, maybe compression, maybe data throughout, maybe modulation, maybe encryption, maybe some or all or others.  Innovations that solve this problem can create very valuable patents.

4. Low-Power Chips for Data Servers: Steve Mollenkopf, soon-to-be the CEO of Qualcomm (in March, 2014), stated at the Consumer Electronics Show in Las Vegas on January 6, 2014, that Qualcomm will develop low-power chips for Internet cloud servers.[3] This seems to be a marriage of numbers 2 (low-power mobile) and 3 (heavy Internet usage) above.  It is not a solution, however, it is identification of a problem – these servers consume tremendous amounts of power, and create massive pollution from the power generation.  This problem was foreseeable ten years ago, and anyone with patents addressing this problem might have very great value indeed. The pressing need to reduce power suggests that the server industry has reached a Technology Inflection Point.[4]

Mega Trends as the Basis of TIPs[5 

What about the five trends listed by IBM in its article?  The time frame, that is, within five years, is definitely right.  The five trends – customized education, improved local buying, customized healthcare, customized digital guardians, and improved cities – are certainly big enough and important enough to be TIPs, although the trends also might appear a bit vague to identify “innovative concepts” that might be patentable.  IBM says that the common element among all five of these trends is “that everything will learn”.  That is an interesting characterization, but perhaps more useful would be say, “All of these trends will enable services that are customized for individuals”.  Where we formerly had to say, “In this specific technology, one size needs to fit all”, we can now say, “With the new technology, each person can receive his or her own service, with maximum value to that person”.

What innovations will allow these inflections to be made in education, health, and urban living?  IBM highlights (1) cloud computing; (2) big data analytics; and (3) adaptive learning techniques.  Innovations that enable one of these three are candidates to create Technology Inflection Points.

Notes:

[1] This part of the blog entry, discussing TIPs, is based on my book, TRUE PATENT VALUE: Defining Quality in Patents and Patent Portfolios, at pp.78-81.

[2] This part of the blog entry is based on TRUE PATENT VALUE at pp.81-86,

[3] “Qualcomm CEO sees opportunity in data center server market”, January 6, 2013, at the CES show in Las Vegas, http://www.reuters.com/article/2014/01/06/us-ces-qualcomm-idUSBREA0510U20140106.

[4] Thus from the incoming CEO of Qualcomm, on January 6, 2014.  Four days later, on January 10^th, the New York Times reports what appears to be a tremendous breakthrough in the storage of energy,  “Advance in battery technology is reported,” New York Times, January 14, 2014.  The new technology, which will apparently allow cheap storage of energy from intermittent sources such as wind or the sun, would seem to have great potential to reduce energy consumption of data server centers.  Any existing patents on this technology, or similar technologies, could potentially be very valuable.

[5] This part of the blog entry is based on the article “IBM reveals its top five innovation predictions for the next five years”, available at http://venturebeat.com/2013/12/16/ibm-reveals-its-top-five-predictions-for-the-next-five-years/ (viewed on December 24, 2013).

Larry M. Goldstein is a U.S. patent attorney, and expert in patent quality, and the author of the recently published book, TRUE PATENT VALUE: Defining Quality in Patents and Patent Portfolios (True Value Press, July 5, 2013).  He is the principal patent expert in yazamip, web site www.yazamip.com, which is his second venture into the world of cultivating high-value patent portfolios.

Introduction: three corporate models for creating patent value

There are two traditional models by which companies or other entities create patent value:

–       Model I: Companies “harvest” patents, which generally means that a company finds existing ideas within a company that are suitable for patent protection.

–       Model II:  Companies deliberately create patent to support planned R&D.  In a process sometimes called “mandated innovation”[1],  a company sets R&D goals, then makes sure that patents are created in parallel with the planned technical innovation.

The difference between the models is that Model I looks for patentable ideas that have been developed by chance (sometimes called “serendipitous innovation”), while Model II specifically attempts to develop patents in parallel with or very shortly after R&D innovation.  Despite this difference, both Model I and Model II place the emphasis on R&D, not on patents.

We are now witnessing, primarily in the past decade, a new approach, which I’ll call Model III, in which inventors and innovators create ideas that either precede R&D, or that are not related to any specific R&D effort.  If Model I is “harvesting” pre-existing ideas, and Model II is “mandating” patents together with R&D, Model III is “cultivating” patents by planting ideas and reaping patents unrelated to R&D.

Why cultivate patents unrelated to R&D?  Some people call this “trolling”, or “monetization”, and yes, it may be used to generate money on the patents, but that is only one possible motivation.  A second and very different motivation is to create a valuable portfolio of patents which can be used as the basis of a business – the business may be entirely entrepreneurial, or may be “intrepreneurial”, meaning a new business enterprise launched within an existing corporation.  Either by monetization or by business creation, Model III witnesses the creation of valuable patents before creation of a valuable R&D effort.

What it takes for Model III to succeed

What is required for Model III to succeed?

(1)  A “good concept” to be developed;

(2)  “Good” patents (that is to say, “high-quality” of patents); and

(3)  A portfolio of such patents (that is to say, sufficient “quantity” of patents).

The rest of this blog will discuss the “good concept”.  I’ll discuss patent quality and patent portfolios in future entries.

AT&T’s Bell Labs was probably the most productive and innovative R&D center in the history of humankind, producing 14 Nobel Prize winners and fundamental breakthroughs in semiconductors, lasers, computer programming, and many other innovations.  What was the secret to this success?  How did Bell Labs discover the transistor or the C programming language?  In fact, the researchers were not looking for technical breakthroughs, or fundamental change of any kind.  They were looking instead for “good problems”, which they defined by “discovering the weak points [of a system] that could be improved upon”.[2]

“Good concepts” are the basis of patent value

Today, how can people find “good concepts”, meaning ideas that would support good patents in Model III?  A recent article suggests the way.  Entitled, “IBM Reveals Its Top Five Innovation Predictions for the Next Five Years”[3], this article lists “five big innovations that will change our lives in the next five years”.  The key things here are not the specific ideas, although they are interesting.[4]  Rather, the keys are:

–       First, innovations that are “good concepts” for patent cultivation occur within the short to medium term, here up to 5 years.  Predictions beyond 5 years are extremely difficult, and the building of value beyond 5 years requires not only patience but a large degree of luck.

–       Second, the concept starts with an important innovation, or perhaps it may be called a “wave” or a “market movement”.  This is not created by the patent cultivators, but they will ride this wave.

–       Third, the innovation creates its own technical problems which must be solved in order to realize the benefits of the innovation.  Patents that address and solve these problems are the kind of “good patents” required by Model III.

What are examples of “good problems”.  The answer involves a concept called Technology Inflections Points (or “TIPs”), which will be the next entry in this blog.

Notes:

[1] “Patent harvesting versus mandated innovation”, Francis Moran & Associates, http://francis-moran.com/marketing-strategy/patent-harvesting-versus-mandated-innovation/ (viewed December 24, 2013).

[2] The Idea Factory: Bell Labs and the Great Age of American Innovation (Penguin Press, 2012), pp.15, 33.

[3] Article available at http://venturebeat.com/2013/12/16/ibm-reveals-its-top-five-predictions-for-the-next-five-years/ (viewed on December 24, 2013).

[4] These five are (1) classes customized for each student; (2) improving the local shopping experience with POS service; (3) using DNA to create customized medicine; (4) digital guardians based on your behavior; and (5) learning cities that keep us informed of relevant events and improve urban management.

Larry M. Goldstein is a U.S. patent attorney, and expert in patent quality, and the author of the recently published book, TRUE PATENT VALUE: Defining Quality in Patents and Patent Portfolios (True Value Press, July 5, 2013).  He is the principal patent expert in yazamip, web site www.yazamip.com, which is his second venture into the world of cultivating high-value patent portfolios.