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Good Timing for High End Technologies
XIGNAL, GERMANY, is a small company in a semiconductor field dominated by global players. Despite its limited resources, it uses the patent system as best it can to achieve its goals and minimise risks.
How a small technology company manages its intellectual property can be key to its survival, yet this is often not taken into account in day-to-day decisions, or considered in the light of a company's overall business strategy. With few resources and so many challenges, it is typically not a priority.“ As a small company our focus is to create leading edge technologies and products. It is essential for a small company like us to file key patents to protect our technologies and to monitor the patents relevant to our technologies in order not to violate foreign patents,” says Dr Heribert Geib, Vice President of Technology and System Engineering at Xignal Technologies.
The example of Xignal, founded in 1999 by three former Infineon Technologies engineers, serves as a good example of a small technology company that manages its intellectual property as best it can, given limited funds and tough competition.
Targeting giant customers
Based on the outskirts of Munich, Xignal is in the highly competitive semiconductor business. It is still in the development stage. Twenty-five of its 32 employees work in research and development. After moving the business model from an IP business to a fabless IC company, it set about establishing sales and distribution channels as well as direct customer interaction (vertical markets).
Xignal is a so-called fabless semiconductor company, meaning it outsources the manufacture of its product – in its case to a Taiwanese company. Because the market is dominated by large companies such as Europe’s Infineon, STMicroelectronics and Philips Electronics, Xignal is focusing on two key niche products, a high-performance clocking device, which serves as a semiconductor’s metronome, and a very low power, high-end analogue-to-digital converter, which can be used in the medical industry, in industrial applications, such as test and measurement devices, and in the automotive industry.
Target customers include giants such as General Electric, Philips and Siemens, and international markets including the US, Europe and Japan. With many potential market applications for its products – from ultrasound equipment to consumer electronics – it is also pursuing relationships with distributors in order to address as wide a spectrum of applications (horizontal markets) as possible.
Intellectual property is important to this small company. Although IP is not a primary focus, the company does intend to utilise the patent system to achieve its goals. Before committing funding to new research, an engineer in-house scans a commercial patent database to make sure the effort will not be in vain because the technology or invention already exists. For example, Xignal does not waste money recreating inventions it can license from others and so reviews, through a patent database, the technologies
available before creating its own. So far, it has not turned to licensing, in or out, though Dr Geib says the company benefits from existing technologies made available by the Taiwanese fabrication plant that makes its products.
Patenting new inventions is highly prized and their creators are rewarded, but at this early stage of the company’s development, the job of investigating whether something is worth patenting and if a competing patent already exists, is left to a patent committee. An outside lawyer drafts the patent filing and reviews the patent search provided by the company. Xignal’s executive and marketing assistant provides additional support.
Better to patent than keep secrets
This is how the process works: An engineer produces an invention that could be patent-worthy. Dr Geib, with more than a dozen patents to his credit (now owned by previous employers such as Infineon), and two engineers make up a steering committee of sorts. They analyse the potential market and determine whether existing patents might limit their freedom to operate and/or prevent them from getting their own invention patented, using a commercial patent database. They also decide whether the patent would protect the kind of know-how competitors might want. Then they examine whether the exclusivity of the technology is significant enough to warrant the effort. Cost is not a deterrent to filing.“For a small company, it’s very important to have a number of patents,” says Dr Geib.
Next, a list of patents in related technologies is given to the outside lawyer, along with the information about the technology or process to be patented. The lawyer reviews the potentially conflicting patents and, if there are no problems, drafts the patent application. It is filed first at the national level, then in the US and perhaps with the EPO. In total, the company has filed 18 patent applications both with the German Patent and Trade Mark Office and the US Patent and Trademark Office. In both countries it holds nine patents and further inventions are currently being processed.
Although the patenting process at Xignal is not sophisticated, it is vital. “In our business it’s better to patent than keep secrets,” says Dr Geib. “If you don’t patent, you’ll find that someone else has.”
Reverse engineering a big problem
In the end, it is more about minimising risks than exploiting opportunities. With limited resources, Xignal is aware that pursuing companies that infringe upon its patents could constitute a real challenge. The company does not perform systematic monitoring of competitors’ activities in this regard. Instead, the company relies on its knowledge of the competitors’ technologies and strategies and hopes for the best. It also tries to minimise risks by patenting its inventions and soon after publishing the minimum amount of details required to stop others from using the company’s inventions. Unfortunately, this is not always possible. Reverse engineering, in which companies take a product apart in order to determine how it was produced, is a big problem in the semi-conductor industry. Unlike big companies, Xignal generally does not create protective patents around a patent to protect it.
Xignal is continually striving to innovate further and use patents in a more sophisticated way. Yet, like a lot of small companies, despite two rounds of venture capital, resources are tight and in-house knowledge about intellectual property limited. In the future, the company hopes to improve this area of the business. The executive and marketing assistant who helps with patenting issues is being trained. The company is also considering employing an outside firm in the future to handle intellectual property issues.
In the meantime, the firm is dependent on its outside lawyer, which presents its own challenges. Unlike large companies, such as Infineon, where many employees came from, there is no internal department with lots of experience in intellectual property and the semi-conductor industry.
Product facts
Xignal's state-of-the-art, mixed-signal ICs provide ultra low power (typically 50-75%
lower than alternative solutions), very high levels of integration to greatly reduce system
costs, and ground-breaking levels of performance that enable new and more effective architectural solutions to system design. The main product families are high performance low jitter timing products for communication and continuous time sigma delta ADCs (analogue-to-digital converters).
Company profile
Staff: 32
Key products: High-performance clocking devices and low power, high-performance analogue-to-digital converters.
Customers: Target customers include General Electric, Philips and Siemens.
Xignal Technologies AG
Leipziger Strasse 16
82008 Unterhaching
Germany
www.xignal.com
IP Background
Patent protection: Nine German patents and nine US patents in nine families.
Patent filing order: Nationally first and then in the US and perhaps with the EPO.
Department: Informal team of three engineers. Uses an external patent attorney.
Success factors: Focus on high performance products.
Challenges: Lack of funds for IP management and battling potential infringement. Legal know-how related to the company’s industry.
Contact
European Patent Office
Erhardtstr. 27, 80469 Munich, Germany
Tel.: +49 89 2399 4636
E-Mail: sme@epo.org
www.epo.org
German Patent and Trade Mark Office
Zweibrückenstr. 12, 80331 Munich, Germany
Tel.: +49 89 2195-0
E-mail: info@dpma.de
www.dpma.de