Jared Engstrom, Head of Patent Development, talks about the growth in Red Hat’s portfolio, how he has used Cipher custom classifiers and how the Cipher Portfolio Optimisation model has improved their understanding of the competitive landscape. Jared manages Red Hat’s portfolio, the harvesting of new invention disclosures as well as moving them through the patent process. He is also responsible for the strategy around what patents Red Hat files, how they are maintained and how they are used to protect the company and support the open-source community.
What types of strategic business questions do you need to consider?
You need to understand where your risk is as a company – for many companies, it’s tied to your products and offerings and the revenue you generate. Understanding that risk naturally helps you understand where to build fortifications and defenses.
In our case, we have a patent portfolio used for defensive purposes only and understand where we have risk exposure due to the markets we operate in and what other companies do in those spaces. We need to answer these questions at a fine level of granularity.
How have you answered that kind of strategic business question in the past?
We recently hit an inflection point. As a smaller company over the previous 10-15 years or so, we were largely concerned with building up the size of our portfolio. We also knew we had a handful of key threats out there, so much of our time and energy was focused on ensuring we were well-prepared to defend against those particular threats.
As we’ve hit this inflection point, where we’re a bigger company with a sizeable patent portfolio and in many more markets and tech spaces, we’ve got to have a broader view of patent risk in general. We need to answer questions about our risk and ensure that we align our defensive measures in each of our relevant spaces proportional to the relative risk.
Cipher has helped us answer strategic business questions specifically by presenting the data to us in a way aligns with our own view of the world.
Cipher’s way of approaching classification is particularly useful because it’s customised to the way Red Hat views the world in terms of technological taxonomy.
What was your approach, and how did that change when Cipher was introduced?
We did do an analysis in the past, where we looked at other companies. We assembled a spreadsheet of 100+ companies that we thought either had products that were similar to ours or they competed in some of our spaces. We did a bunch of manual analysis that took us months and months to build, and it gave us some insights about where some of our risks were, but it was static data and hard to update and maintain.
Once we learned about Cipher, it was sort of an ‘aha’ moment where we realized that we could dynamically monitor, measure, see trends, and better understand what the world looks like, but do it through our lens, through our taxonomies. Seeing the world through that lens gives us a better ability to act on that information because we are already familiar with it and know it aligns with our business strategy.
How did you find that process of taking your view of the technologies of interest into a Cipher taxonomy?
The process was straightforward. We defined the technologies and provided examples of patents that met the definitions for the different technology areas. We were under some time pressure to finish the project before the end of our last fiscal year, and we managed to work through the whole thing in what I think was less than a month. And it wasn’t a full-time effort on the part of the Red Hat team. The Red Hat team certainly put in a lot of time and effort, but the Cipher team did all the heavy lifting. It would have taken us several months of nearly full-time effort to do that on our own.
How did you get over the trust and confidence issues required to share that data more broadly inside your business?
Red Hat, as a technology company, understands the value of technology, understands the value of good data and understands the power of artificial intelligence.
We also had quite a bit of our own historical data and manual analysis that we could compare against the Cipher results. So it was fairly easy to get comfortable with the results as the Cipher results lined up pretty well with our own. Cipher also provided insights into things that we weren’t aware of.
You referenced there that you got some insights from Cipher and the optimization model that maybe you hadn’t been able to access before. Can you talk about that?
In our own manual analysis, we did some exhaustive research on 100+ companies to see what patents they had, their revenue, and their litigation history – all those sorts of data points you need to understand the landscape. But it’s impossible to research every company on the planet, and it’s hard to know whether you’re missing anybody that you should be aware of.
Sure enough, in our Cipher analysis, there were two or three or four companies that weren’t on our radar, and we are now conducting more in-depth research and analysis to understand how those companies might or might not be a risk. We wouldn’t have known about them if it wasn’t for Cipher.