|Founded in 1989, MicroPatent was the first company to provide patent
document delivery services. Following its acquisition by Information Holdings,
Inc. (IHI) in 1997, the company has itself been in acquisition mode. In
a recent interview, president Steve Wolfson said that next up for MicroPatent
will be new value-added services and tools.
Q Can you start by saying something about your
A I came to MicroPatent as chief financial officer
5 years ago. Shortly afterwards, when MicroPatent was acquired by Information
Holdings, I became president. In total, I have spent 22 years in information
technology companies, including large companies like the Thomson Corp.
and smaller ones like Data Broadcasting, which is now called Interactive
Data and owned by the Financial Times in London.
Q What's the story behind MicroPatent?
A MicroPatent was founded in 1989 by a smart entrepreneur
called Peter Tracy, who began selling U.S. patent facsimiles on CD-ROM.
By the early 1990s MicroPatent had become the largest distributor of EPO
[European Patent Office] information, and begun offering searchable patent
information from Europe, Japan, and the U.S. In 1997 Peter sold the company
to Information Holdings, which allowed a sharp increase in capital funding.
In 1998 we introduced the first integrated full-text searchable database
that included PCT applications. Until that time nobody in the world offered
the full text of PCT applications. And in 1999 we added searchable U.S.
full text back to 1836. Again, nobody else has this, not even the USPTO.
Then in early 2002 we added U.K. full text—another unique product—and German
full text. As a result, we now have the most comprehensive full-text database
collection anywhere in the world.
Q You also source patent data for other providers?
A Right. We have an agreement with Dialog in which
all the patent documents ordered through them come from us. We have a partnership
with Chemical Abstracts, which allows their users to get patent documents
through us. We also deliver patent documents for the Derwent World Drugs
Alert, and we recently signed a deal in which we will be integrating our
document delivery service with the Derwent World Patents Index (DWPI) on
the Institute of Physics Web site. There are many more examples where we
either partner with or sell data to other providers. Delphion, for instance,
buys U.S. data from us.
Q My perception of MicroPatent is as a document
delivery company. Is that still accurate?
A People think that way because we were the first
and the best at document delivery. But the reality is that we are becoming
an extremely powerful search company, too. We have all the searchable full
text I mentioned, and we are now using some very, very powerful computers
to deliver this. We are also developing workspace and analytical tools.
So we are absolutely no longer only about document delivery.
Q Talk me through your product portfolio. There
is PatentWeb, Trademark.com, and you have some CD-ROM products, right?
A Absolutely. The portfolio of products we now
offer is larger than any other company's in the industry because we are
both a technology company and a database company. As such, we have everything
from CD-ROMs to customized in-house solutions, and a standardized Web product
that can also be customized. We also took on Derwent's CD-ROM customers
this year after Derwent decided to get out of the CD-ROM business, and
we are launching the World Patent and Trademark Exchange....
Q What is your main product?
A Our key product is what we call TOPS, the Total
Optimised Patent Solution. That is the Web product that offers all of our
services in one group, so you get downloading, you get searching, you get
workspace tools, you get analytical tools&$151;all in one product.
Alternatively, users can opt for a customized in-house solution.
Q So PatentWeb is the Web version of TOPS?
A No. TOPS is a particular group of products and
services offered via subscription. PatentWeb is simply a trademark that
denotes all the MicroPatent patent services that are offered either directly
on the MicroPatent Web site or which can be ordered via the Web site.
Q If I were a potential customer I would be a bit
confused by all this. How does the sales process work?
A We will go and visit a customer and try to find
out what it is they want to do and how it is they want to do it, and then
we may say to them: "OK, we have the standard product on the Web. Here
is what it does. We think it is going to suit your needs very well." However,
it may turn out that they don't want it, or it only suits one of their
departments. In this case we will say, "Let us build something else that
will fit exactly what you want."
Q How does your pricing work?
A We have all sorts of pricing plans. We have flat-rate
pricing, we have transaction pricing, we have discount plans. We are very
Q So what's the range of pricing options?
A On the Web it ranges all the way from buying
a single patent for $4.95 to the most expensive option of a $95,000 annual
subscription. For a customized job the price depends on what the customer
decides they want.
Q I'm told MicroPatent claims to have around 10,000
users. Is that right?
A Yes. Today we have around 10,000 users. But that
is not necessarily a meaningful number since it will include people who
may order just $100 worth of patents a year.
Q Who are these users? Information professionals,
patent people, scientists, inventors?
A All of them, since we have multiple markets.
We have a very large legal market, we have a large R&D market, and
we have a large information professional market.
Q Presumably these different types of users have
different searching expertise and so need different products to reflect
A We like to think that all our products are simple
and easy enough for anyone to understand and use. How they are used will
depend on the expertise of those using them.
Q A number of users I spoke to expressed some dissatisfaction
with your interface. Are there plans to change it?
A Some people may have specific dislikes, but I
am not aware of any great unhappiness. Our experience is that when you
change your interface there are more unhappy people, just because you changed
it. However, we do believe in incremental changes, and we are constantly
looking at ways of improving it.
Q A couple of users also commented that while they
like being able to download patents in Adobe, it is not currently possible
to search on those patents since they are non-searchable images. Do you
plan to change this?
A We have not had enough overall customer demand
for this feature to put it on our general development schedule. However,
we have built tools for several of our larger customers so that their users
can, using Adobe software, search any PDF patents they retrieve from MicroPatent.
We would be happy to discuss potential solutions with any customer.
Q Another user asked about security and wondered
why you do not SSL-encrypt your search page.
A We don't force everyone to have SSL encryption
because it makes the search slower, but we do allow it for anyone who wants
it. So maybe this user just doesn't realize it is available as an option.
Q What about privacy? Can users be sure their searches
will never be recorded and mined?
A In the past we never kept track of searches,
only of usage. Recently, however, some of our law firms have said that
they would like us to tell them what searches they are doing. So we are
going to build in some functionality to allow us to track searches, but
only for those people who want it.
Q MicroPatent is 100-percent owned by Information
A That is correct.
Q Both Information Holdings and MicroPatent have
acquired a lot of companies recently: Optipat, Faxpat, Master Data Center,
IDRAC, Woolcott, Corporate Intelligence, Liquent, and so on. How do they
all fit together now?
A With the exception of Master Data Center, IDRAC,
and Liquent, all these companies have been acquired by MicroPatent and
are run by MicroPatent. The other three companies are owned by IHI and
are run by separate divisions of IHI. However, all four of us are under
an intellectual property group, and we are all going to be cooperating
closely with each other because we believe there are synergies among us.
Q What is the strategic vision driving these acquisitions?
A We bought them because we believe them to be
synergistic and helpful to MicroPatent. The strategy is to offer a wide
range of patent information, products, and services to our diverse customer
base, and as time goes on we are going to figure out ways to meld some
of our trademark information with our patent information.
Q How many employees does MicroPatent currently
A Altogether we have about 140 employees, including
all the MicroPatent companies.
Q How do the financials look currently?
A We don't release financial figures, but what
I can say is that every year since I have been president of this company
it has been highly profitable, and I expect it to continue to be.
Q So why not share the sales and profit figures
A Because we are owned by IHI. IHI is a public
company that issues certain figures, but I can't give out any figures that
they don't issue, as I am not a spokesman for IHI. What I can do is recommend
you to the reports published in January by Thomas Weisel Partners and Merrill
Lynch, who are investment bankers for Information Holdings. The Weisel
report, for instance, shows MicroPatent's 2000 revenues to be $20 million.
Q What sort of growth are you experiencing, and
is that changing?
A We experienced very rapid growth as soon as I
took over because we put in a lot of capital expenditures and increased
our R&D significantly. We are still experiencing growth, although some
businesses are declining. For example, our CD business declines every year.
On the other hand, our solutions business is growing incredibly rapidly.
The downloading business is holding its own, although it isn't growing
as rapidly because of all the free sites out there.
Q Who are your main competitors?
A The free sites are certainly competitors to us.
At the other end of the spectrum we compete in tiny areas with Derwent.
But our primary competitors are online services like Dialog and Questel,
Q And the patent offices? They are a bit of a wild
card I guess?
A They are. However, we work very well with the
U.S. patent office and we don't consider them to be much of a threat. The
EPO is more of a competitor. On the other hand, our U.K. data is a product
of a partnership with the EPO, and we have sold the PCT full text and other
data to the EPO for their examiners.
Q Do the activities of the patent offices raise
A Absolutely. We view the free services offered
by the patent offices as unfortunate and, in the case of the U.S. at least,
a waste of taxpayers' money. So yes, it is unfair competition. But I am
not going to throw up my hands and say, "OK, I've got to get out of this
business." We just have to move on to much higher value products, which
is what we are doing.
Q What does the fate of Aurigin tell us about the
patent information industry?
A The failure of Aurigin doesn't tell us anything
about the market for patent information. It tells us that Aurigin was underfunded
and overstaffed—and I think they were incorrectly managed. Currently, therefore,
Aurigin is in the process of bankruptcy. Someone is going to buy them out
of bankruptcy. It could even be MicroPatent since we are bidding for them.
Q What is the attraction of Aurigin to MicroPatent?
A We are bidding for two reasons: Firstly for their
intellectual property, secondly for their customers. We believe we could
build systems for those customers that will be even better than they have
Q As you pointed out, the growth of free patent
sites means that companies like MicroPatent will have to move up the value
chain. What's your take on recent developments at Delphion, particularly
their move into consultancy?
A Delphion seems to be following the Aurigin model
by building software for various aspects of intellectual asset management
and adding consulting. This high-risk,high-investment strategy—which has
resulted in Delphion dropping out of active selling in Europe—does not
appeal to us, especially since our sister company, Master Data Center,
already has excellent asset management tools.
Q Tell me about MicroPatent's future plans.
A We plan to increase our sales of in-house customized
solutions and to add a lot of analytical tools to our Web site. To this
end, for instance, we have a partnership with Global Linxs, a German software
company that specializes in Autonomy semantic search software. We believe
that semantic search systems will turn up lots of new important hits that
you wouldn't get if you used Derwent, or using our current Boolean system.
We are also going to be moving into clustering and ranking technologies.
Additionally, we have a partnership with ConnectSite for content management
Q So new search technologies combined with content
management, workspace, and analytical tools?
Q What about new content?
A We are content hungry, and we want to put up
as much data as possible. So we are negotiating with several major patent
offices around the world, and if any country out there has any data that
they would be interested in doing something with, they should talk to us.
Q Has MicroPatent ever considered following Delphion's
example and adding Derwent's World Patents Index to PatentWeb?
A We always want to add things to our service that
can benefit our customers. To that end, we have asked Derwent many times
over the last few years about putting up DWPI on MicroPatent. They have
consistently refused to even negotiate such a deal.
Q MicroPatent doesn't seem to be promoting itself
very actively. Why is that?
A I agree that we had been a little remiss in this
area but have rapidly begun to change that. As you pointed out, a lot of
people still think of us as a document delivery company. We are changing
that perception to one of an IP solution company with more salespeople,
more marketing, and most importantly, exciting new products.
Q Finally, where do you see MicroPatent in 5 years?
A Our plan is to have MicroPatent double its revenue
and double its profits in 5 years. Most importantly, our aim is by then
to have developed all the tools necessary to help our customers grow their
Richard Poynder is a U.K.-based freelance journalist who specializes
in intellectual property and the information industry. He writes for a
number of information publications, and contributes regularly to the London
Times. His e-mail address is firstname.lastname@example.org.