After Softbank acquired chip designer ARM for $32 billion back in July 2016, an unusual situation transpired. The laborious and lengthy process involved in conduction due diligence on the chip designer’s patents took a few days as opposed to the typical duration, weeks.
This impressive feat is attributed to the use of software-driven artificial intelligence, which had the potential to go through documents at light speed, compared to the ability of humans.
Slaughter & May, the law firm that represented ARM during the acquisition, and Softbank leveraged a similar artificial intelligence(AI)-tool to scan through both Softbank’s and ARM’s patent portfolios.
According to Nigel Swycher, who is behind the Aistemos startup that created the patent-probing tool, the searches took only a few seconds instead of the usual number of weeks coupled with thousands of dollars in lawyer fees.
Aside from that, the London-based startup asserted that it recently secured £3 in funding from investors such as Beringea, a British venture capital firm.
The trend is increasingly growing whereby entities such as aerospace company BAE Systems and ARM are utilizing such software to avoid hefty patent-lawyer costs or even keep a keen eye on their competition.
They are also using the technology in searching for a broader range of acquisition targets while scouting for licensing opportunities.
The need for Aiestemos services became apparent after a digital-money company found out who owned a patent related to ATM cash transfers and was amazed to find that it had such patents. According to the Swycher, most people hold patents that they do not even know.
Swycher is convinced that an artificial intelligence (AI)-driven software, which can read and evaluate thousands of pages containing technical information in seconds can dismiss a lot of the confusion regarding the types of existing patents.
In the long-run, this achievement could lead to the emergence of a trillion dollar world market that has been mainly operated by patent lawyers to date. As such, the marketplace currently remains accessible to many professionals including marketing experts, engineers and insurers.
According to a recent report ordered by Swycher ’s startup, corporate executives are convinced that licensing opportunities would grow by 6%. However, this is on condition that the information regarding patent ownership was more readily available.
Swycher introduced his Cipher tool back in 2016 after working as a partner at Slaughter& May, which is a top law firm in patent litigation matters.
At the firm, he aided companies in conducting their due diligence prior to making acquisitions. However, going through the huge volumes of documents in data rooms was expensive and at times futile.
Since unveiling Cipher back in 2014, Swycher’s Aistemos startup has managed to sell subscriptions worth between $50,000 and $100, 000 each year to nearly 50 corporate clients such as BAE Systems, Ocado and ABB. According to Swycher, the browser-based tool only responds to “who is doing what?”
It costs $10,000 and takes around two weeks to perform a similar search to that done by Cipher. Swycher added that his company’s average user conducts around 250 searches yearly while insisting that the service becomes cost effective after being used six times.