Semiconductor Company Uses Patent Classifiers to Manage Patent Budgets

Rob Calico, VP of IP and Litigation at ARM, discusses the challenges of managing a sophisticated portfolio in a fast-moving technology environment and how Cipher has helped them manage their patenting strategy and budgets through Cipher patent classifiers. Rob is responsible for ARM’s IP strategy (both prosecution and enforcement) as well as worldwide litigation. The biggest challenge, he says, is being able to point to the value of the assets in their portfolio.

What are the strategic business questions you, as an IP leader, need to consider? 

The fundamental question always is when executives say: “I see the number of patents, but how do I know that these patents are the ones that we need? If we want to go in a different direction, how will the patents continue to add value?”  Those kinds of questions. Basically, does the IP match what the business wants to do? Are they strategically aligned?

How do you go about answering those strategic questions?

ARM is roughly 30 years old at this point and is now a subsidiary of SoftBank. When I joined ARM roughly 9 years ago, it was a different situation.  Not that long ago, in terms of the age of the company, the company behaved in a much more of a start-up fashion. Patent targets for invention were tied to metrics associated with technology developments, things that made sense at the time. As the organization has grown, you try to figure out what are better empirical ways to figure out how many patents are the right number of patents.

My background is in litigation. Litigators always have a fear based on notice requirements around either indirect patent infringement or wilful patent infringement.  Around doing too much digging. You find yourself in a situation where you want to know, but you don’t want to know too much.

And it’s a difficult thing, and a lot of the time, you’re set up in situations where you have to know the answer to the question, “Do we have the right strategic numbers of patents?” We find ourselves looking for unique, different or innovative ways to figure out where we are and where our competitors are – are we in the right space?  Do we need more, or do we need less?

How have Cipher and patent classifiers changed your approach to these kinds of strategic questions and challenges?

As our relationship with (LexisNexis) Cipher developed, it became obvious that the classifiers would be useful for doing this kind of searching. The mechanism for getting the right amount of detail without getting too much detail.

Prior to that, we’d used a lot of Boolean searching. We have a team that would do some of the landscaping work and a separate team that would do the patent prosecution work. The results of the two teams would be widely different, and this caused unwanted tension. Modifying Boolean search is haphazard. You put in more terms or more phases or whatever, and the numbers for the patents are suddenly too big, and everyone loses confidence. You can end up in this cycle where you’re just more and more aware that what you’re getting is not terribly accurate.

What we’ve been able to do with Cipher is get the landscaping team, the prosecution team and the Cipher team working together to generate patent classifiers within areas of the business that we care about.  And having built those patent classifiers, we now have a reliable and trusted source of data.

Once you have accurate landscaping, you can run those same searches over time and look at the relative velocity of other entities.  Who’s growing faster?  Are there people who have a low number of patent counts relative to us, but they’re increasing at such a rate that we should be concerned or, at least, watch what they’re doing?

What we’ve been able to do once we have that data is feed that back into the patent invention harvesting targets and the application filing targets and, tailor our targets more towards what we need.  Cipher provides the data that enables us to be more nimble and responsive.

How have you used Cipher to help manage budget?

ARM has grown substantially in the last 4 or 5 years, especially since the SoftBank acquisition. As we did the 10-year plan, our patent budget became really substantial in the next 5 to 10 years.  It was necessary to revisit our budget because it didn’t make sense strategically.

While our current ways of setting patenting targets served us well for many years it doesn’t work in a period of rapid growth. Now we have the data to make decisions with greater confidence.

Has this had a significant impact on the way you’ve managed your patenting strategy? How do you communicate more broadly with the business?

There has been a slight softening in the semiconductor business.  We’ve needed to identify areas where we can save.

Coming back to the subject of long-term budgets. We’ve been able to feed the numbers that we’ve generated and modified our patent application targets based on that work – essentially what we’ve done with Cipher to modify the slope of that line. We can see the year-on-year on savings. The nice part of modelling for the future, is that you can act ahead of time and avoid the spend in the first place. The next stage will be to optimise our existing portfolio and we do have an intention to look at what we have in prosecution and what has been issued.

Because we have incredible data and patent classifiers from Cipher, we can honestly go to the organisation and say, “We’re going to make these changes in the way that we file patent applications. If we don’t proceed with these, it will materially impact the value of the company or our strengths in the areas that we operate in.”

Being able to demonstrate a strategy where you can save money without losing anything is always going to be a win, quite frankly.

How has Cipher helped you manage your budget?

Having an empirical way of pointing to why we file the applications that we file, based on data that we receive from Cipher patent classifiers, helps us to make the case that what we need, the budget that we need to file these applications, is critical based on where others are going and based on the future health of the company.

ARM was customer number one for Cipher and we’ve had a long relationship with you guys.