patlytics Secures $14M Funding for Patent Analytics Platform

The Evolving Role of Patents in the Age of Artificial Intelligence

For many years, patents have been a subject of debate within the technology sector. While some view them as essential for safeguarding intellectual property, others criticize them as potentially hindering innovation. The emergence of AI is prompting a renewed examination of these issues.

Patlytics: An AI-Powered Patent Analytics Platform

Patlytics, a New York-based startup, has created an AI-driven platform designed to optimize patent workflows for corporations, intellectual property professionals, and legal firms. This encompasses areas such as patent discovery, analysis, comparison, prosecution, and litigation support.

Recent Funding and Growth

The company announced on Monday that it secured $14 million in Series A funding. This round was spearheaded by Next47, with contributions from existing investors including Google’s Gradient, 8VC, Alumni Ventures, Liquid 2 Ventures, and Myriad Venture Partners. This latest investment brings the total funding raised by Patlytics to $21 million, following a seed round completed in April.

Founding and Motivation

Patlytics was founded in January 2024 by Paul Lee, serving as CEO, and Arthur Jen, as CTO. Lee, a former venture capitalist, observed that companies dealing with intellectual property were relying on outdated methods. Processes like discovering, analyzing, and reporting on patents, as well as building litigation cases, were often slow and required significant manual effort. Jen, having previously managed patent filings at the crypto wallet company Magic, experienced these inefficiencies firsthand.

Changing Perceptions of Legal Tech

“My initial perspective on legal tech was shaped by some common misconceptions, as I don’t come from a legal background,” Lee explained in an interview with TechCrunch. “However, AI has fundamentally altered the landscape. The IP market demonstrates a clear demand for improved technology, a drive towards higher-value work utilizing Large Language Models (LLMs), and, crucially, a need for quality among patent professionals.”

Core Technology and Applications

Patlytics’ engine leverages custom-built LLMs and generative AI. These technologies are specifically tailored for IP-related research and tasks. These include drafting patent applications, creating invention disclosures, conducting invalidity analysis, identifying and analyzing infringement, analyzing Standard Essential Patents (SEPs), and managing IP asset portfolios.

Impressive Growth Metrics

Within a six-month period, the 1-year-old startup has reported a 20-fold increase in Annual Recurring Revenue (ARR) and an 18-fold expansion of its customer base. The company maintains a consistent month-over-month growth rate of 300%. While the exact number of customers remains undisclosed, approximately half are law firms, with the remainder being corporate clients from sectors like semiconductors, biotechnology, and pharmaceuticals. Patlytics also serves clients in South Korea and Japan, and recently initiated a pilot program in London and Germany.

Notable Clients

Current clients of Patlytics include Abnormal Security, Google, Koch Disruptive Technologies, Quinn Emanuel Urquhart & Sullivan, Richardson Oliver, Reichman Jorgensen Lehman & Feldberg, Xerox, and Young Basile.

Future Plans and Expansion

The Series A funding will be used to expand the sales team and further invest in product development. This includes hiring additional engineers and broadening the range of modules offered by the platform. Since April 2024, the company has doubled its workforce, growing from 11 employees to meet increasing customer demand. Eric Lin, an IP litigator with over a decade of experience at firms like Paul Hastings, Morrison & Foerster, and Baker Botts, will join Patlytics as Vice President of Strategy.

Expert Perspective on Patlytics’ Impact

“Patlytics offers the capability to automate technical discovery, generating comprehensive claim charts for validity and infringement assessments, which traditionally necessitate costly experts and substantial attorney time,” stated Bob Steinberg, a member of the Patlytics advisory board and chair of the Patent Trial and Appeal Board (PTAB) Practice at Latham & Watkins. “By delivering confidential, detailed, and impartial analysis, Patlytics aims to provide cost-effective access to crucial information for those involved in patent dispute resolution, minimizing misunderstandings and facilitating negotiations, transactions, settlements, and more efficient litigation.”