Sunday, August 21, 2005

Patents at Motorola

A headline in the Chicago Tribune, "Motorola curbs chase for patents," suggests a backoff, but the text may suggest something else. Specifically, it looks like a previous business decision created a bottleneck with too few patent lawyers, and now more attorneys were hired, and the rate-limiting step has been modified.

Note also the relatively modest incentives for techies to write patent disclosures.

-->from the Tribune-->

But when it comes to one measure of innovation, patents for inventions, Motorola has lost ground. The Schaumburg technology giant was regularly among the top 10 recipients of U.S. patents during the 1990s, yet it slipped to 30th in 2004, according to U.S. Patent Office data.

The reason lies in a round of cost cutting and a change in Motorola's patenting strategy, executives say.<--

***The article discusses cost issues:

In the early 1990s, Motorola had a stated goal "to get as many patents as we could get," said Jonathan Meyer, Motorola's senior vice president for intellectual property law.

Then, about five years ago [ie, circa 2000], the company revamped its patent strategy, he said. The initial focus was simple: "What can we do to cut costs?"

Patents don't come cheap. An invention with global sales potential must be patented in the U.S. and several other countries, and costs about $200,000 to file and maintain over its multiyear life, Meyer said.

***Patent lawyer shortage; return to former conditions?

Still, a couple of years into the new patent regime, patent proposals began backing up internally, Backof said.

Motorola researchers make their patent pitches to a committee of co-workers, all experts in the same field. Normally, there's a two- to three-month backlog from the time a pitch clears a committee and the time a company lawyer files a patent application.

But that backlog grew beyond a year because Motorola didn't have enough lawyers, Backof said. Researchers began to grumble. Plus, Motorola made itself vulnerable to competitors beating them to the patent office.

The company hired more lawyers to fix the problem in 2002 [ie, only 2 years after the changed strategy], Backof said. That loosening of the spigot should lead to higher Motorola patent counts in the next few years, executives say. Up to four years can elapse between when a patent is filed and when it is granted. [Hmmm, the limiting strategy was only in place for two years.]

***Internal rewards for patents at Motorola

Patents are a key motivator for Motorola's researchers. For years, "Motorola has had a very good system for people to create patents," said James Conley, a professor of technological innovation and industrial engineering management at Northwestern University.

Motorola rewards inventors with status and money. Inventors get $150 for proposing a patent-able idea, $1,500 for a patent filing and $750 for a patent grant because most filings are granted.

Researchers with 10 to 24 patents can be spotted at Motorola's sprawling suburban Chicago campus because their employee badges are gold. Inventors with at least 25 wear platinum-tinted badges.

Wearers of gold badges have earned a $10,000 bonus while those in platinum received $25,000.

More than 100 Motorola workers wear gold while over 50 don the platinum. They are a select group: Motorola has about 24,000 engineers spread across the world, including about 1,200 in "advanced technology" research, where the company's patents are primarily germinated.

***Outsourcing; offshoring

About two-thirds of those advanced techies are in the U.S. But as Motorola's markets have gotten more global, so has its research efforts. The company has research and development operations in 18 countries besides the United States, with a particularly large presence in China and India.

If Motorola or another company decided to outsource research, that could be a dangerous strategy.

"It's a slippery slope," said Jim Andrew, a senior vice president and technology specialist in Chicago with The Boston Consulting Group. Once a company starts farming out core research, it risks eroding its ability to generate new ideas and thus, new products.

"You lose the ability to invent," he said.

[Note: recall the offshoring of Cummins' research to Pune.]

[Tribune text by Mike Hughlett, Tribune staff reporter]


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