Good patents are an art
The Patents and Trademark Department is by no means a dusty documentation archive. Patents are a business tool and a strategic weapon.
With its new manager's vision is that Ericsson's Patent Department will be an obvious destination for bright patent engineers. The aim is to adopt a cohesive approach to patents, trademarks and the protection of designs. The interaction between these tools is becoming increasingly important as the proportion of consumer products in Ericsson's product range expands.
"Inventions are like raw materials. The next stage is to draw up a good patent, together with the inventor, in the light of our know-how about strategies, markets and competitors. Patent operations are in art in themselves," says Hans Holmgren, the new Manager of the Corporate Patent and Trademark Department. Hans is convinced that Ericsson will be one of the most successful companies in the world in the patents field by the turn of the century.
"People only tend to talk about patents, but the area is much broader than this. We have to look at the overall picture," says Hans Holmgren. "We must also spend more time on trademarks and design protection, because they are different sides of the same problem. Since we now have a higher proportion of consumer products, it is easy to see that design issues are becoming increasingly important. The overall implications of patents, trademarks and design are obvious."
The term Intellectual Property Rights (IPR) puts the situation in a nutshell.
"IPR is a business tool, and should be treated as such. We are not a documentation center," Hans Holmgren points out.
Patent which was never filed
In point of fact, Ericsson's entire operations are based on a patent which was never filed. For some reason, Alexander Graham Bell never applied for a patent in Sweden for the telephone. And that gave Lars Magnus Ericsson a chance to transform his company from a repairer of communications equipment to a designer of communications systems.
Nonetheless, Lars Magnus himself was not particularly interested in patents. According to his obituary in one of the Swedish newspapers in 1926, he was reported to have said that patents are only filed for safety pins and trouser buttons. Fortunately, attitudes are rather different at Ericsson today.
900 patents in 1996
Ericsson submitted almost 900 patent applications in 1996 alone. This is a new record and, for the first time, the volume of patents was mentioned in the annual report.
"But this is not just a question of quantity. It is also a matter of deciding what patents Ericsson is going to spend its time and money on - in other words active management of the patent portfolio."
"We should only spend our money on strategic and profitable patents. This means there is a continual need to actively manage patents. If we have good patents, we can block our competitors, giving ourselves freedom of action. Patents must be employed as active instruments," Hans Holmgren says.
Patent operations are expanding rapidly. Hans Holmgren's department has doubled in size in the past two years and now has a staff of more than 50. A great many services are also purchased from external patent offices in various countries. It is hardly surprising that the department needs to expand even more. Ericsson currently has a portfolio of about 15,000 patents and patent applications to manage.
Patent operations cost money, but this expenditure is necessary, according to Hans Holmgren.
"If you spend large sums on research and development, as Ericsson does, you also have to invest in patents. If we didn't do this, it would be like leaving the harvest out in the fields," he explains. "The cost of patents may also be regarded as the cost of being in the market."
Hans Holmgren is by no means dissatisfied with Ericsson's approach to patent issues.
"Ericsson is the right company to work for if you want to deal with this kind of area. It is a state-of-the-art company, with a management team which is interested in patent issues and prepared to invest in this field. We still have some way to go before we are in the world class, but that's where we'll be by the turn of the century," Hans Holmgren says.
Most of Ericsson's existing patents are utilized within the company, although Ericsson also sells licenses to other companies and, in turn, purchases the right to use their patents.
"When we enter into agreements with other companies, we can 'exchange' the right to use each other's patents," Hans Holmgren explains. "Then it's a question of having a strong patent portfolio and being a good negotiator, if we want to minimize our costs. The aim is to create revenues. But patents should not be regarded as an independent business operation, even if we sometimes make money on the sale of patents. It is important for us to enter the development stage as early as possible, to enable us to produce a tailor-made patent solution or some other kind of protection for a specific concept or product."
Footnote: If you want to read more about the Corporate Patent Department or get in touch with people working there, see the Intranet home page:http://www.lme.ericsson.se/LMEB/