How IP portfolios can turn into a real company asset

Tuesday, August 1, 2017

By Michael Klein, Anaqua 

Modern IP management is more than just managing documents, deadlines and other formal processes.  With increasing digitization and modern IT platforms, it makes sense to think of IP Asset Management (AIM) in a broader sense to reflect the great impact and substantial benefits of intellectual property in innovative companies. Modern IP Asset Management is no longer limited only to a department handling patents and other intellectual property rights. In addition to the purely legal processes - such as the classic administration of intellectual property rights, tracking renewal deadlines or handling IP disputes - Intellectual Property Asset Management includes a number of other aspects that have a direct impact on the company and its economic development. Consistent integration of the research (R&D) department is therefore just as important as consideration of the interests of product and brand managers, heads of business units and not least, the top management of the company. Companies in the automotive industry in particular can benefit from organised IP asset management, as examples from Honda and Ford show.

Classification and centralization as key factors

With properly processed IP information, R&D departments can, for example, determine very quickly in which industries development work is in fact worthwhile, and in which fields further innovations are rather difficult to position due to existing patents. Heads of business units and the top management can compare the existing IP portfolio with the existing product lines and business plans, and make relevant suggestions to the IP department about the IP strategy that is most suitable for the company’s current business model. In this way, for example, decisions about the renewal or relinquishing of licences and patents can be based on solid management decisions. In addition, IP departments can also contribute valuable information on the existing maintenance costs of an IP portfolio and elaborate solid and secure decision-making bases for future investments in intellectual property rights.

Consistent classification of the portfolio and central administration of all IP assets are two key fundamentals for such an approach. For classification purposes, it must be ensured that in addition to the common technology classification, other categorisations that are relevant for the company are also defined and implemented. This can done, for example, based on products, business units, product life cycles, licence status, actual use as a product, etc.  This means that the various partners in the company are able to retrieve the information that is relevant for them and derive direct management action recommendations from it. For example, the R&D department is able to decide very quickly about the desired direction for future R&D efforts.  IP managers are able to see quickly whether a specific patent application led to an actual product development, or if a renewal can be dispensed with in future. 

Example of Honda: Success is 99 percent failure

This approach can be achieved only with a central IP asset management platform, which allows all participating partners to access the same information and makes it possible to inform them about changes in real time. A very pertinent example of a successful implementation of a central IP approach involving a wide range of departments is the Japanese Honda Group. Honda operates globally and generates an annual turnover of more than US $100 billion by manufacturing automobiles, motorcycles, as well as products for energy generation. The company has one of the world’s largest budgets for research and development and is the world’s leading pioneer in many fields of technology, including energy-efficient vehicles and robotics. In 2014, Honda implemented a fundamental restructuring, which focused on improving the coordination of innovations between the seven geographic regions. In doing so, the various R&D centres of the group were granted region-based autonomous administration. At the same time, with the establishment of Honda Patents & Technologies, an IP team working across all departments and locations was put together, which was provided with a global platform, ANAQUA8, to organise all IP processes. This strategy pursued the following objectives in particular:

  • Consolidating information systems and the processes around the innovation process
  • Promoting the mutual exchange of ideas and best practices between the regional research and development centres
  • Facilitating the harmonization and balancing of evaluation criteria across the entire IP portfolio
  • Ensuring better traceability of R&D investments on their way to valuable patents.

IP departments with a cross-departmental function

The practical implementation of the new organisational structure resulted in IP experts in the various locations concerned now participating regularly in brainstorming sessions of the R&D department; in doing so, they are able to identify whether an apparently new idea is an actual innovation based on specific questions. To this end, they examine in depth all the details which are potentially patentable and assist the developers with their know-how about current patenting trends. Knowing what will not work is as important at Honda as knowing what will work - recognising dead-ends in R&D is as important from a commercial and thus financial perspective as the ability to identify ground-breaking innovations. Company founder Soichiro Honda formulated this notion early on in his now world-renowned guiding principle: ‘Success is 99 percent failure.’

The Ford Motor Company is another car manufacturer which resorts to the various modules of Anaqua to centralize its IP asset management. This shows that in the automotive industry in particular there is a great demand for central, organised IP asset management.

In summary, the process of modern IP asset management can best be described as a combination of two structural changes in the organisation of the company: Available patent information must be consistently classified and managed on a central platform. This means that internal processes can be optimised, redundancies reduced and all partners can be brought to an identical information status from their respective business perspectives. In addition, close cooperation between all central business units - from the research and development department to product and brand management, and to the business units and corporate management - is guaranteed when evaluating IP assets. A flexible IP department which functions cross-departmentally within the corporate organization is therefore particularly useful in this regard.

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Michael Klein is the head of ANAQUA’s German office in Cologne. Anaqua helps companies and law firms to turn their intellectual property assets into a competitive advantage. Its software platform combines insights from the field of big data analysis with critical tools, proven workflows and services. This results in a single, efficient and intelligent solution that helps IP law firms work more efficiently and make better decisions faster. Many well-known brands and highly innovative products have already been designed, evaluated, protected and commercially used with the help of the ANAQUA platform. Anaqua was founded in 2004 by IP managers of The Coca-Cola Company, Ford Motor Company, Kimberly-Clark and British American Tobacco. The privately managed US company has its registered office in Boston and has other subsidiaries in Europe and Asia.  http://www.anaqua.com/.