29th October 2020

Cipher in the Top 10 as automation disrupts the patent intelligence market

Cipher features in Outsell Report 2020

Cipher is recognised in the Top 10 to Watch in Outsell’s latest market review of Patent Research & Analytics (Hugh Logue, 20 October 2020).

Here are a few of the report highlights:

Increased recognition of the strategic value of patents
Strategic Patent Intelligence is increasing in sophistication
10 companies to Watch, includes Cipher
Recession as a catalyst for change
Disruption in the patent services market

Increased recognition of the strategic value of patents

Outsell says:

“In the fiercely competitive patent research and analytics market, providers are investing more than ever to differentiate their products, yet all this innovation is driving up prices and creating greater pressure to deliver better ROI. After decades of underinvestment, the market is now changing significantly as private equity firms look to add value to their investments by recasting the whole market.”

The Cipher view is that patent search – helping companies file for another patent, is a large and undifferentiated market. We wholeheartedly endorse Outsell’s view on ROI – you don’t command higher prices just because you invest $$m in R&D. It’s a solution to a problem that commands the value.

Strategic Patent Intelligence is increasing in sophistication

Outsell says:

“Strategic patent intelligence has grown significantly in sophistication in recent years and is increasingly covered within general patent search platforms and by specialist pure-play providers such as Cipher …

Business customers use strategic patent intelligence to look for insights into a company’s direction and long-term strategies, such as by identifying the number, age, and quality of a company’s patents in a particular market. This trend is driven by AI analytics and data visualization technology, which can make patent information more relevant to company executives by framing it in a business strategy context instead of a purely legal or R&D perspective. The information can be used in valuations, M&A due diligence, competitor intelligence, portfolio optimization, or the analysis of overall market conditions. Patent data analytics enables businesses to predict the next waves of innovation within their particular industries and markets.

Solutions like Cipher use supervised machine learning and are designed to automate and compete with manual patent search services. As a result, this subsegment has significant growth potential: it does not so much compete in the patent research market as threaten to disrupt the manual search services. This market presents white space growth opportunities by potentially improving the quality of manual work while also dramatically decreasing the cost of manual services. The combination opens up a latent demand for strategic patent intelligence.”

The Cipher view is that strategic patent intelligence is a new category of analytics. The emphasis is on the business and long-term strategies, and not tactical and operational decisions. See our work on Portfolio Optimisation and Competitor Intelligence

10 to Watch

Outsell says:

“Outsell’s 10 to Watch in the Patent Research & Analytics market include up-and-coming emerging companies that are well-positioned to capitalize on current trends and grow their businesses as well as established providers that are somewhat overlooked but are performing well and have significant potential.

Founded in 2013, Cipher (formerly Aistemos) is a strategic patent intelligence provider headquartered in the UK that is growing at over 70% annually. Cipher uses AI and machine learning to provide customers insights into complex landscapes of patented technology to support their strategic IP decisions such as portfolio optimization, competitive intelligence, and licensing. Cipher automatically maps patents to technologies to enable companies to analyze the landscape through a technology lens. While most providers like to stress that their solutions are designed to complement manual services, Cipher is open that its solution can not only replace manual work but significantly improve on it. In Outsell’s view, growth in the patent solutions market will come from automating manual work and using technology to take market share from legacy services.”

While we are proud of our technology platform and the contribution we have made to analysing patent information (see Creating the Gold Standard ), the focus today is on the “so what?”. AI and machine learning has lost its sex appeal and users look more to benefits, and less on the underlying technology.

Recession as a catalyst for change

Outsell says:

“Yet new opportunities for patent information and technology providers are present – providers and investors just need to know where to look. COVID-19 has led companies to cut their outsourced patent search services, creating a need for tools to support patent search and analysis tasks in-house for novice users. Providers need to converge different offerings to add value and target the adjacent services market by automating expensive manual services. Advanced semantic search, comprehensive global patent coverage, rich user interfaces, and AI tools are no longer product differentiators – they are considered standard features.

The pandemic and resulting recession are making customers focus on protecting their core businesses for survival. However, the messaging of many patent solution providers is still stuck in 2019, emphasizing their innovative AI tools instead of how this technology can help companies cut costs, such as by replacing outside manual services. Indeed, hyped-up language about cutting-edge AI may actually work against providers by creating the impression that it is a luxury and not a core need. Providers need to replace such messaging with language about ROI, productivity, and efficiency capabilities.

The messaging needs to target C-suite executives who are less likely to care about keyword clustering, semantic search, patent classification analysis, and so on. Instead, these decision-makers are more concerned with how it will add revenue, cut costs, or get their products to market faster.”

The Cipher view is that as with remote working, video conferencing, home exercise, the pandemic will accelerate many of the digital transformations that have been on the patent agenda, but perhaps not a priority. Now the focus is both on spend and efficiency. The reality is that the significant patent budgets can no longer escape scrutiny and slow and expensive patent search will no longer be acceptable.

Disruption in the patent services market

Outsell says:

“Providers must not be afraid to push boundaries by attempting to automate costly manual work that convention has always said can’t be automated. The patent services market is outdated and ripe for disruption. Companies are cutting back their external spend on services during the recession yet still need the work to be done somehow. This creates a need for patent solutions with accessible workflows that can walk in-house staff through patent tasks or automate this work completely for far less than the cost of manual services.

For patent solution providers, premium manual service firms are easy competitors as they can charge several thousand dollars per report that might not be as comprehensive as an AI-powered report that can quickly scan millions of documents and make connections that a human might miss. Changes and cuts made during the pandemic are unlikely to be reversed as companies realize they can get the same work done internally.”

The Cipher view is that automation of manual patent tasks is both inevitable and desirable. There are a few who believe that this will destroy jobs, but this is to exaggerate the impact of industrial revolutions, this being our fourth. Strategic patent intelligence is about providing better data, at a lower cost and quicker. This liberates humans from the dysfunctional and inefficient manual counting and sorting of patents in favour of insight and decisions that only humans can make.