How important are technological inventions and the patents that protect them? I've argued that technology in and of itself is essential to marketable products ("A sporting chance for R&D ," T&MW, July 2003, p. 5). Among prognosticators, I'm in the minority. For example, in the May issue of MIT's Technology Review, columnist Michael Schrage contends that "there is no correlation between a successful act of invention and a successful marketplace innovation. None."

I've been looking in the test industry for evidence to bolster my case. I found some visiting Credence Systems' new facility in Milpitas, CA, earlier this year. What struck me there was the company's patent wall, which commemorates the more than 200 patents the company has been awarded worldwide.

In a follow-up e-mail interview after my visit, I asked president and COO Dave Ranhoff whether he sees a correlation between invention and marketplace success. "Absolutely," he replied. At Credence, I can tell you we pay very close attention to both."

He cited as an example Credence's patented CMOS stabilization technology, which has contributed to the market success of Credence's low-cost, CMOS-based, air-cooled ATE systems.

Ranhoff said Credence takes two approaches to patents. First, he says, "We encourage engineers to directly pursue patentable inventions. Ideas for inventions undergo a peer review where the idea is considered and analyzed. A decision is then made whether the idea would be viable for Credence's technology portfolio." For the second approach, he said engineers analyze completed designs to determine what portions would be worth protecting with a patent.

Patents, too, are a way of recognizing individual contributions. Ranhoff, whose company has obtained many patents through acquisition (and will gain an additional 153 US patents with its acquisition of NPTest), said, "While we've consistently built upon inventions acquired from various companies, we've also recognized the value of the individuals behind those inventions. That's why we've worked hard to retain the key technologists at the companies we've acquired, and not simply their patent portfolios."

He concluded, "It's the balance between invention and marketing savvy that makes a great company."

I concur. Get out there and invent.

Send me your comments. To see more comments from Ranhoff, see below.

Ranhoff elaborates on patents and inventions

The following is an interview with Dave Ranhoff, president and chief operating officer, Credence Systems.

T&MW: Do you believe that there is a correlation between invention and marketplace success?

Ranhoff: I absolutely believe there’s a correlation between invention and marketplace success. Any business that’s inventive--that invests in R&D--does so with the aim of promoting those inventions in the marketplace. This is one of the primary reasons we’ve had patents in this country for more than 200 years--to protect the individuals and businesses who create ideas that move companies, industries and, indeed, entire nations forward.

This doesn’t mean that companies that are good at inventing things are also good at marketing them--or vice-versa. But at Credence, I can tell you we pay very close attention to both.

Credence invests heavily in R&D to strengthen our design-to-test portfolio as well as our ability to meet the diverse requirements of the fiercely competitive and rapidly changing semiconductor industry. Credence’s product portfolio is an example of how we’ve patented ideas, combined them in new ways, and taken them to market to address changing market forces and technological innovations. For instance, Credence leads the industry--from both a technological and a marketing standpoint--in addressing new wireless test challenges. We developed patented modulated vector network analysis (MVNA) technology, and applied it in a new way to capitalize on what we see as a very promising wireless market. It was our appreciation for the invention, coupled with our market ambition, that’s led to our success.

Moreover, while we’ve consistently built upon inventions acquired from various companies, we’ve also recognized the value of the individuals behind those inventions. That’s why we’ve worked hard to retain the key technologists at the companies we’ve acquired, and not simply their patent portfolios. It’s this balance between invention and marketing savvy that makes a great company.

T&MW: Can you cite a specific example of a patent that led to a market success for Credence?

Ranhoff: The CMOS stabilization technology, for which Credence holds several patents, is used in all of our digital test instrumentation and is a key technology that has contributed to Credence’s success in the market. This technology has permitted Credence to deliver low-cost ATE systems build completely with cost-effective CMOS technology that can be air-cooled.

Another example of a patent that led to market success for Credence is our patented MVNA technology, the industry’s first breakthrough technology development in S-parameter measurements in 30 years. MVNA is a proprietary Credence technology that measures S-parameters with digitally modulated signals, resulting in improved yields and dramatically reduced cost-of-test for advanced wireless RFICs. Our MVNA technology is an integral component of our ASL 3000RF test system, which has already demonstrated success in the marketplace, because of its high performance and compelling value proposition.

T&MW: How does the patent process work at Credence--do engineers directly pursue patentable inventions, or do they analyze a completed design to identify portions for which they should file for a patent? 

Ranhoff: Both methods are utilized at Credence. We encourage engineers to directly pursue patentable inventions. Ideas for inventions undergo a peer review where the idea is considered and analyzed. A decision is then made whether the idea would be viable for Credence’s technology portfolio. If so, the engineer writes a disclosure for the patent attorneys to file. 

In addition, when new products are designed, engineers often consider and analyze portions that might be patentable and worthwhile to protect and file for a patent.

Contact Rick Nelson at rnelson@tmworld.com.