Patent Operation: From the Success of FingerWorks

In recent years, the concept of patent operation has been frequently mentioned in the field. A few days ago, millet acquisition of Microsoft patents, Huawei and Apple signed a patent cross-licensing agreement and other news, the concept of patent operation is also heating up again. Nanjing Huaxun U.S. Patent feels that it is undeniable that the actions of large technology companies like Xiaomi and Huawei in the field of patent transactions and licensing are cases worthy of attention. In the domestic patent operation has been "thunder and raindrops" situation, such events can indeed attract people's attention.

What is patent operation?

What is a patent operation? This is a matter of opinion. There is no expression in English that can completely correspond to the Chinese "patent operation". The one that is closer is "Patent Monetization", which is literally translated as "patent monetization". In my opinion, patent operation is simply to obtain income through patents. The subject can be individuals, or entities such as enterprises, universities or research institutions.

If understood by the standard of "Patent Monetization", Xiaomi's acquisition of Microsoft's patents is not a patent operation, because the acquisition of patents brings Xiaomi assets rather than direct monetary benefits, while the cross-licensing of Huawei and Apple is a typical patent operation. However, although the cases of Huawei and Xiaomi have points worthy of attention, they are all typical patent strategies of large enterprises. Today, when the voice of innovation and entrepreneurship in China is rising, people should pay more attention to the patent operation of start-ups or small and medium-sized enterprises. The mode and success of patent operation can more accurately reflect the general environment in the field of domestic patent operation. In the United States, the patent operation of start-ups or small and medium-sized enterprises is very active, which should also be used for reference in China.

FingerWorks's road to success

Examples are the most convincing. People all know that multi-touch screen control (Multi-Touch, referred to as multi-touch) is one of the features of many Apple products, but they do not know that its emergence is closely related to the patent operation of small and medium-sized enterprises. In 1998, two technicians at the University of Delaware, Wayne Westerman and John G. Elias, invented multi-touch technology. Soon after, they incorporated a small company and started their own business. This little-known company is called FingerWorks.

Due to the importance of their own technical achievements, Westerman and Elias hired very professional agents through the University of Delaware to formulate their patent application strategy and write and submit related patent applications. The agency uses the U.S. patent application renewal system [1] to always maintain at least one patent application in the U.S. Patent Office, and has made good U.S. patent applications and layout protection for its core inventions.

However, the development of FingerWorks in the past few years has not been smooth. At the end of the 1990 s, the popular touch screen products were mainly single-touch technology of liquid crystal. The invention of multi-touch technology was difficult to make truly mature and cheap products under the hardware conditions at that time. In 2000, FingerWorks, like many start-ups, was still worrying about what kind of products the company would make and how to raise funds. By chance, they met Jeff White, an investor who specializes in business operations, at an investor meeting. The latter offered to join after watching their technology demonstrations and patents, and promised to help them make profits. The condition is that he is responsible for the management and operation of the company. Under the control of Jeff White, FingerWorks began to contact with IBM, Microsoft, NEC, Apple and other enterprises.

Apple was developing a touchpad product for Mac desktop computers at the time. Trackpad the emergence of FingerWorks, Apple also realized that multi-touch can also have a wide range of applications on mobile phones. After understanding the patent layout of FingerWorks, Apple completed the acquisition of FingerWorks in 2005, and it was less than 8 months from Apple's patent authorization to the acquisition FingerWorks.

Two years later, in January 2007, Jobs released the first generation of iPhone, and multi-touch screen technology has become one of the most attractive technical highlights of this phone. And the FingerWorks team has also made a lot of money. Founders Westerman and Elias have now become Apple's very successful technology management, and Jeff White has become an operational expert. Later, Apple continued to apply for new patents for different innovation points of this technology in the United States, Japan, Europe, South Korea and other countries and regions. So far, it has derived a patent family of nearly 200 pieces, firmly controlling the core patents of multi-touch technology in its own hands. The following figure shows Apple's patent application in the United States:

Looking back on this story, one can find many bright spots related to patent operation.

It can be assumed that if FingerWorks were to develop products related to multi-touch technology by themselves, what would happen to this company with only a few employees? In the hardware environment of the late 1990 s, this small company would probably not insist on a mature product.

And if FingerWorks didn't do a good job of patent protection for its core technology in the early stage of its founding, could it attract Jeff White to join in? Will there be Apple seeking authorization or even acquiring this company later? I think the answer is also obvious.

Today, the acquisition FingerWorks is obviously a win-win result for both parties, and the most important condition for the achievement of this result is to have the core technology and do a good job of patent protection. There is no FingerWorks in the market today, but has it succeeded? I think so. In a sense, the success of FingerWorks is precisely the success of a patent operation-owning core patents and realizing income as the most valuable asset of the enterprise.

The story is over. Nanjing Huaxun US Patent believes that in today's China, the environment for innovation and entrepreneurship is gradually being optimized, and patent operation as a new concept is also affecting entrepreneurs inside and outside the field. For start-ups with core technologies, learning from FingerWorks precedents should be positive. It is hoped that many cases like FingerWorks will emerge in China in the future, when the domestic patent operating environment will be much better than today.