A Strategic Method for Obtaining an Enforceable Patent Based on a ProductArchitecture Analysis

Abstract
It is difficult for most of companies to obtain a usable patent according to statisticalresults provided by the Japan Patent Office. This would be because the companies
hardly can see through a trend of products. This paper discusses an efficient method,which is led from an analysis of product architecture, to obtain the usable patentenabling the company to license other companies. In other words, the productarchitecture analysis helps the company come up the future trend of its developing
product. This is considered that the company can smartly obtain an enforceable patent,
prior to obtainments by the other companies, by filing a patent application focusing on
the future trend. Consequently, this paper presents the measure for obtaining a patent
strategically for the company by using the product architecture.

Keywords: enforceable patent, product architecture, integral, modular

1

I. Introduction
In Japan, about four hundred thousand patent applications are filed with the Japan
Patent Office (JPO) every year and more than one hundred thousand patents are granted
after laid-open publications, examination requests, and examinations by the JPO
examiners [1]. However, a ratio of using the granted patents is approximately 50% [2].
This means that companies do not use around half of patent rights obtained by thecompanies themselves. On the other hand, fees for maintaining patent rights paid to theJPO increase according to the passage of maintenance terms. As a result, the companies
do not want to have unusable patents but want to get usable patents.
Almost all the companies maintain their patent rights in order to mainly protect
their own products from imitating by third parties. This is one aspect of patent use. Yet,
if they are commercial company corporations, they want to license their patents to othercompanies and to earn money. This is another aspect of patent use. Especially for a
venture company, license income would be an important source of revenue on themanagement. However, most of the companies do not acquire a method to file patentapplications strategically, expecting future patent licenses to the others, since it would
be difficult for them to grasp a precise future trend of technologies where competitors
are also going to want to develop.

2

A strategic theory about manufacture has been set up based on product architecture[3]. Shifts of the product architecture over time have also been studied in the strategic
theory [4]. The companies would be able to estimate the future trend of technologies
more precisely from reviewing the shifts of the product architecture and also would
obtain an enforceable patent efficiently by filing a patent application in the field of theestimated technology.
Therefore, this paper explores a strategic measure for obtaining the enforceable
patent through considering the product architecture and its shifts.

II. Definitions
1. Enforceable patent
An “enforceable patent” is defined in this paper as a patent on an invention used byanother company. This is because a company having the patent can earn a legally-valid
license fee only when the other company uses the patented invention.

2. Product architecture [5]“Product architecture” is the basic design concept of a product, and it relates to how
to allocate each “function” demanded in the product to each “structure” of the product3

and how to design an interface between structures. There are two basic patterns of theproduct architecture: “modular (combination) architecture” and “integral (lapping)architecture”.
The modular architecture is that, in a product, one functional element corresponds
to a certain structural element one-to-one through a standardized interface. Because theinterface of the component is standardized, bringing the components together allows acompany to manufacture a wide variety of products. For example, when a Personal
Computer (PC) system includes structures of a PC, printer, and projector, eachfunctional element of computing, printing, and projecting corresponds only to the PC,
the printer, and the projector, respectively. This is realized because the printer andprojector are connected with the PC through the standardized interfaces.
Meanwhile, the integral architecture is a case where there is a many-to-many or atleast one-to-many correspondence between the functional and structural elements of aproduct. This architecture needs a mutual adjustment of component designs and also
needs optimal designs to each component. Taking a car comprising a body, engine andsuspensions as an example of the integral architecture, each function of a runningstability, a high mileage, and comfort relates to all of structural elements such as thebody, engine and suspensions. In short, in order to achieve one function, all structural4

elements must be adjusted mutually.

3. Architecture matrix [6]An “architecture matrix” is a two-by-two matrix as described in Figure 1. The
horizontal axis indicates that the inside structure, i.e. its component, of company’s own
product is the modular type or integral type. The vertical axis shows that a market ofcustomer’s product where the company’s own product is sold is the modular type orintegral type.
(1) Integral-inside-integral-outside(2) Integral-inside-modular-outside(3) Modular-inside-integral-outside(4) Modular-inside-modular-outside

IntegralCompany’s OwnProductModularIntegral

ModularCustomer’s ProductFigure 1
The matrix consists of the following four regions.
(1) Integral-inside-integral-outside
Integral-inside-integral-outside is a position where a company sells acomponent, such as a car component, consisting of integral-type-structures to a5

customer producing an integral product. Namely, the company in this position
manufactures and sells the component specially designed for specific customer’sneeds. In this region, the company needs to propel a thoroughgoing customization
strategy in order to survive.
(2) Integral-inside-modular-outside
Integral-inside-modular-outside is a case where a company sells a component,such as an MPU used in a PC, including integral-type-structures to a customer using
the component as a modular-type-component. The company can sell its products(components) as standardized goods. In this field, the company has to follow up on aunique commodity having an integral structure that is difficult to imitate.
(3) Modular-inside-integral-outside
Modular-inside-integral-outside is an area in which a company sells a product,such as a built-to-order machine tool, containing a modular-type-structure to acustomer making an integral product. In other words, the company is required tomanufacture and sell the product composed of standardized component, and theproduct depends on a customer spec. In this area, it is essential for the company tomeet a customization demand by promoting modularization of company’s ownproduct.

6

(4) Modular-inside-modular-outside
Modular-inside-modular-outside is a position where a company sells a product,such as a desktop PC, with a modular-type-structure to a customer using the productas a modular-component. The company in this region has to reduce the production
cost by mass production.

III. Shifts of the product architecture and key technologies
1. Shifts of the product architecture over time
Since the product architecture is the concept of design, it is not determined as justone meaning technically. Even though it is the same product, its product architecturechanges over time. For instance, it is said that a hard disk drive had integral architecture
and was in the position (1), i.e. integral-inside-integral-outside, in the past. However, itprogressed into modular architecture with the time and now it is completely in theposition (2), i.e. integral-inside-modular-outside. A DVD recorder used to be in theposition (2), but currently it is in the position (4) (modular-inside-modular-outside) as aresult of the development of its standardized modular-type-components. Commodities
such as a PC, and a mobile phone, with which we are familiar in our daily life, arefinished products standardized even in their inside structures in open environment. They7

currently position themselves in the position (4). However, they were in the position (1),when they commercialized for the first time. They reached to the position (4) via theposition (2) or (3), as inside and/or outside standardization progressed. As theseexamples shown, a product, particularly a digital product, tends to progress into themodular architecture in short bursts if open standardization spreads [7].
Consequently, any product would finally move to the position (4), even if it nowpositions itself in any other position than (4). In short, the shift of the productarchitecture happens with the time inevitably. In light of this shift, the next item
discusses important key technologies in each position.

2. Key technologies in light of the product architecture(1) Integral-inside-integral-outside
In this position, the followings are possible important key technologies to be
developed: (i) a lapping technology between components, (ii) an interface
technology between internal components, (iii) a platform technology for integrating
components, (iv) a lapping technology to an external product, (v) an interface
technology to an external product, and (vi) a turn-key-solution-type platform
technology.

8

(i) A lapping technology between components
Lapping, i.e. making a lot of trial-and-error adjustment among components,
is required to manufacture a product to be sold to the customers. It is essential
to adjust components one another preferably in the integral-inside nature,
which needs a lot of know-how. This technology would be a core technology
for the company.
(ii) An interface technology between internal components
A company needs to develop this internal interface technology sooner thanothers in order to deal with a modular-inside product in light of the shift to theposition (3) in the future, because, in the position (3), it would be essential for
most of the companies to use standardized interface technologies to connect
their inside components. The interface technology includes a physical form of
the interface and signals to connect another component.
(iii) A platform technology for integrating components
Taking into account the shift to the position (3) in the future, adevelopment of a platform-related technology would be desired in order toeasily integrate modular-type components to be used in the position (3). This
platform technology contains an infrastructural technology to allocate the9components efficiently on the infrastructure.
(iv) A lapping technology to an external product
It is important to customize its components and to adjust the component tocustomer’s product because of integral-outside nature. This technology would
usually contain the company’s know-how and also would be a core technology
for the company similar to technology (i).
(v) An interface technology to an external productA company needs to develop the external interface technology sooner thancompetitors in order to treat a modular-outside product in light of a shift to theposition (2) in the future, since almost all the companies have to use astandardized interface to connect peripherals in the position (2). The interface
technology contains a physical form of the interface connector and a signal toconnect to the customer’s product.
(vi) A turn-key-solution-type platform technology
Taking into account the shift to the position (2) in the future, it is desirable
to develop a platform technology to apply an integral-type component tomodular-type customer’s product. The turn-key-solution means a system(hardware and/or software) designed for specific use, which can be used without

10

a unique program or installation. The turn-key-solution-type platform relates to abasic technology such as an automatic adjustment mechanism or program with avariety of customer’s products(2) Integral-inside-modular-outside
In this position, it is conceivable that key technologies are the followings: (i) alapping technology between components, (ii) an interface technology between
internal components, and (iii) a platform technology for integrating components.
(i) A lapping technology between components
It is essential to adjust components one another precisely in theintegral-inside nature as stated above.
(ii) An interface technology between internal components
A company needs to develop this internal interface technology sooner thanother companies to deal with a modular-inside product in light of the shift to theposition (4) in the future. There is a physical form of the interface or signals toconnect with other module in this interface technology.
(iii) A platform technology for integrating components
Taking into account the shift to the position (4) in the future, aplatform-related technology having broad utility would be desired in order to11

integrate modular-type components using in the position (4).
(3) Modular-inside-integral-outside
In this position, the followings are considered as key technologies: (iv) alapping technology to an external product, (v) an interface technology to an externalproduct, and (vi) a turn-key-solution-type platform technology.
(iv) A lapping technology to an external product
It is important to adjust the components to customer’s product due to theintegral-outside nature.
(v) An interface technology to an external productA company needs to develop this external interface technology sooner thanothers to deal with a modular-outside product in light of the shift to the position(4) in the future. The interface technology may contain a physical form of theinterface and signals to connect the outside device.
(vi) A turn-key-solution-type platform technology
Taking into account the shift to the position (4) in the future, it is desirable
to develop this kind of platform technology to apply company’s own component
to modular-type customer’s product.
(4) Modular-inside-modular-outside12A company applies commodity components to standardized customer’s productin this position, so that there would be no important key technology in light ofproduct architecture.
Figure 2 shows the relations between the product architecture matrix and theessential key technologies as described above.

IntegralCompany’s Own
Product(1) Integral-inside-integral-outside(2) Integral-inside-modular-outside

Key technologies: (i), (ii), (iii), (iv), (v),Key technologies: (i), (ii), and (iii)and (vi)(3) Modular-inside-integral-outside
Modular Key technologies: (iv), (v), and (vi)(4) Modular-inside-modular-outside
Key technologies: N/A

Integral

ModularCustomer’s ProductFigure 2

IV. Strategic patent applications
1. Understanding of its position
A company has to recognize where the product under development or to be
developed is located on among the positions (1) to (4) in order to file a patentapplication strategically based on the product architecture analysis. This is because theconsiderable key technology is different in each position. The company needs to13

understand not only internal environment but also external relations in order to find its
product position.

2. A patent filing strategy for the key technology
After understanding the position of the company’s own product, it is desirable toresearch and develop the technologies that are considered as the key technologies ineach position as mentioned above. Then, the company should file a patent application
on an invention made from the research and development. This provides companies
with a method for obtaining future enforceable patents because the technology tends toflow in one direction in the modularization process over time, such as the shift from theposition (1) to (4) via (2) or (3), especially in the field of digital products.
However, because the patent application is opened to public in 1.5 years after filing
date, the company has to be careful to judge whether its patent application is filed,especially in the field of the technology (i) or (iv). The technologies (i) and (iv) can
include the company’s know-how in many cases, so that the company should
accumulate the know-how as its technology knowledge in the inside of the company incase publication of the know-how affects the company profits badly.
On the other hand, the company should file patent applications actively specifically14

in the field of the technology (ii) or (v). There is a possibility that those kinds ofinterface technologies gain a position of a de facto or de jure standard. If the company’s
technology gets the standard position, competitors are forced to use the patentedtechnology. This means that the company (patent-holder) can usually obtain a license
fee without annoying patent negotiations or patent litigations. This kind of patent iscalled an essential patent. Accordingly, it is desirable for the companies to file patentapplication intensively in these fields and form a potent patent portfolio. Meanwhile,even if the license-free policy is adopted at stage of standardization, the company
having many essential patents can take a high position in the standard group such as aconsortium and make the standard to the company’s advantage.
Additionally, if the company’s developing product is located in the position (4), there
is no strategy for filing patent applications because no important technology is in theposition (4) based on the product architecture analysis.

V. Conclusion
This paper discussed the method to obtain an enforceable patent based upon theproduct architecture analysis.
Firstly, a company hoping to get enforceable patent has to understand the concept of15

the product architecture because this discussion depends on the architecture theory.
Secondly, the company needs to realize where the company’s own product is positioned
in the product architecture since the field of technology to be developed varies
corresponding to the position in the architecture matrix. Finally, the company should
develop the technology according to the position and file a patent application.

[2,679 words]

16

References[1] Japan Patent Office. (2009). Tokkyo-Gyousei-Nenji-Houkoku 2009 Nen-Ban [Annualreport on patent government 2009]. Tokyo: Japan Patent Office. Retrieved September
19, 2009, from http://www.jpo.go.jp/shiryou/toushin/nenji/nenpou2009_index.htm[2] Japan patent Office. (2007). Result of the Survey of Intellectual Property-RelatedActivities 2007. Tokyo: Japan Patent Office. Retrieved October 3, 2009, fromhttp://www.jpo.go.jp/shiryou/toukei/pdf/h19_tizai_katudou/kekka.pdf[3] Fujimoto, Takahiro, and Manufacturing Management Research Center, University ofTokyo. (2007). Monodzukuri Keieigaku: Seizougyou wo Koeru Seisan Shisou[Manufacturing Management: Production Concept Surpassing Manufacturing Industry].
Tokyo: Koubunsha.
[4] Shintaku, Junjiro. (2005). Architecture-based Competitive Strategy of JapaneseFirms (MMRC Discussion Paper No. 54). Retrieved September 26, 2009, fromhttp://merc.e.u-tokyo.ac.jp/mmrc/dp/index.html[5] Shintaku. op. cit.
[6] Shintaku. op. cit.
[7] Ogawa, Koichi. (2008). Seihin Architecture no Dynamism wo Zentei to shite
Hyoujunka Business Model no Teian: Shin-Nihon-gata Keiei toshiteno Business Model17Innovation (2) [Proposals on Standardization Business Models Premised on Dynamismof Product Architecture: Business Model Innovation as New Japanese style ofManagement (2)] (MMRC Discussion Paper No. 205). Retrieved September 26, 2009,
from http://merc.e.u-tokyo.ac.jp/mmrc/dp/index.html

18