February 15, 2001
In many industries, more than three fourths of new products start out as direct requests from customers. How can you find and capitalize on the opportunities hidden in offbeat requests?
The common view that new things start in a research and development lab is not always true. Some useful innovations come right off the factory floor. Even more result from an effort to solve a customer's problem.
Twenty years ago, Eric von Hippel, a professor at Harvard Business School, found that in many industries, more than three-fourths of new products started out as direct requests from customers. How can you find and capitalize on the opportunities hidden in offbeat requests?
Institutionalizing flexibility cuts the risk of unpleasant technical surprises and puts your company in a position to profit from innovations and new products, whether they originate in your shop or your customer's.
Your customers are most likely to be a new-product source if you listen to them talk about what they need but are not getting. One technique that can work to your advantage is to match your sales force to your customers so your best listeners and problem solvers call on your biggest and most capable customers. Another technique is to offer additional liaison and technical aid to technically astute customers, who are least likely to ask for help.
There is a flip side to using customers' problem-solving skills to generate new products. Sometimes you may be the customer who comes up with solutions that create a product opportunity for one of your suppliers. Sometimes you may want to partner with the supplier to finish off the development. Sometimes you may want to benefit passively using the supplier's new product. Either choice can be a reasonable one, but if you're not prepared for the opportunity, you may find the choice made for you.
Be sure to document "creeping improvements" that can add up to a significant change in how things are done. Everybody knows that making day-to-day improvements is part of continuing to do well in business, and many technological changes occur as strings of little incremental improvements that cannot really be kept as trade secrets but that nobody bothers to document.
A significant risk lurks here. Someone who is new to the business and is not familiar with the way products have developed may see something that is just one more step in the process as a major leap forward. If a patent examiner (who basically evaluates patent applications in a context supplied mostly by earlier patents) agrees with the newcomer, established businesses may find themselves in an expensive and unpleasant situation in which they have to pay the newcomer to continue manufacturing their existing products.
Sometimes these problems can be avoided by sending product data sheets to the Patent Office (this appears to be a common practice in some industrial materials handling businesses), but the more reliable approach is for industry leaders to publish technical articles or file occasional patent applications on some of the little steps to make sure that the documents are on record and in a place where an examiner can find them.
Administrative skill may not lead to technological innovation, but good planning can maximize the chance to secure intellectual property rights when the opportunity arises. Much of this involves little more than making sure that everyone understands who owns what before the work is done and defining the "what."
Companies don't have ideas, people do. However, companies often own the rights to what their employees create - - more than 85 percent of U.S. patents are issued to companies. That ownership is not automatic. Management should set up appropriate employment agreements so that the company can own what it develops. Within the U.S., what can or should be covered by such an agreement varies from state to state, so consult local counsel when arranging these agreements.
Company-to-company agreements are important in any customer/vendor development. The best time to define who owns what is at the beginning of the process, when none of the untested ideas has any clear, accountable value.
Organize and account for projects. Developmental efforts seldom are clear and well-bounded. Deliverables often are not well-defined. Cost estimates are speculative, and the time scale usually is longer than promised.
Development projects may not fit into your accounting system very well and may be viewed by the accounting system as just another way to restate overhead costs. Fortunately, a number of decent project planning and management software packages are available that let you track the work on a project and budget it effectively. Good project accounting records can be of considerable evidentiary value if you ever get into a dispute in which you have to prove that your company was making a diligent effort over some period of time.
Plan to control the flow of information in a reasonable way. Some things need to be kept secret, but others almost demand publication. In many product developments, there is an initial time to keep something hidden and a later time to put it out in public view. Getting the timing right is an important consideration in securing patent protection.
Most countries outside the U.S. follow a "strict novelty" rule that denies patents to anything made public before a patent application is filed. However, it is not always easy to prepare a patent application before putting the new product on sale or otherwise in public view.
Major annual tradeshows and professional meetings have a way of inspiring development work that somehow gets done at the last minute. When that happens, people are much too engrossed in the project to give much thought to the niceties of documenting their work carefully or sitting down with a patent agent or attorney to try to define what is potentially patentable.
For U.S. companies, the size of this problem shrank about five years ago, when the patent laws were modified to include a provisional application that can be filed without determining which features appear patentable. The essential requirement of the provisional application is that the invention be disclosed in enough detail that "someone having ordinary skill in the technical art" could use that information to practice the invention.
This level of detail usually is readily available (albeit not as a single, coherent document) by the time a product is ready to be announced. The law allows you to file that description and then come back later with a clearer presentation in the form of a regular utility patent application.
Having a monopoly on a product may be the ultimate in niche marketing. The value of such a monopoly depends both on how big the market turns out to be and how well that potential can be secured with a patent.
Patents are granted for products, processes, and compositions of matter that are new and that are not an obvious improvement or change to something that already exists in the prior art. To a large extent, the breadth of coverage available for an invention depends on how new and different it is. Hence, it is important to collect as much information as possible on how the invention differs from what already is on the market or otherwise is known.
Your patent agent or attorney probably will recommend a professional novelty search that focuses on published patent documents to help to round out this picture. The people directly involved in the project often are the best searchers for other references such as trade magazines and competitors' data sheets.
Getting a patent requires a complete technical disclosure about how the invention works. The explanation has to be good enough that someone with typical technical skills in that application can use the description to re-create the invention without undue experimentation. Not giving enough detail can invalidate the patent. The usual recommendation in this area is to go just a bit beyond the level of detail required.
The law requires the version of the invention described in the application to be the best one known at the time of filing. Sometimes a subtle matter of timing is hidden in that requirement. If it looks like some of the manufacturing details are going to be unusual enough to be profitably kept as trade secrets, the best time to file the application is before those details are worked out fully.
In addition to the best version, you may want to describe a few of the not-so-good ones as well. The breadth of protection that a patent offers is related to the breadth of description, so you should expect your patent agent or attorney to press you for details on alternate ways of providing each feature.
Successful innovation in the factory can come directly from responding to customer requests. However, success in this sort of activity usually requires planning for your acquisition of intellectual property so that you can capitalize on these opportunities when they arise.
The FABRICATOR® is North America's leading magazine for the metal forming and fabricating industry. The magazine delivers the news, technical articles, and case histories that enable fabricators to do their jobs more efficiently. The FABRICATOR has served the industry since 1971. Print subscriptions are free to qualified persons in North America involved in metal forming and fabricating.