5 Things to Know Before Managing A Corporate IP Portfolio

Thursday, December 7, 2017

by Vincent Brault, SVP of Product and Innovation at Anaqua

Currently, 80% of the average company’s valuation is in their intangible assets, and the number is even higher for tech companies and start-ups[1]. Intellectual property is driving business growth and value in our emergent global economy. Ostensibly, IP is the business. Today, the cost of managing a patent for its lifetime runs a corporation roughly $100K. That’s a much larger number for companies like Apple, Samsung, Honda, or Yamaha with burgeoning patent portfolios in the tens of thousands. Further, looking at an overall R&D budget, divided by the number of patents secured, companies like Microsoft spend about $4.5 million on R&D for every patent they obtain.

But, to what end with this much spend? Product sales can exponentially exceed R&D, IP procurement and management costs throughout the life of a product making the initial investment well worth the cost.

So, how does an executive team develop a scalable portfolio and strategy?

Managing hundreds, thousands, or tens of thousands of IP assets can prove a significant undertaking. Many C-suite executives lack the tools and insight needed to maximize their return on investment when managing a portfolio to support corporate initiatives. IP asset procurement and management is an expensive endeavor but one that provides extensive financial and tactical benefit when executed methodically. Establishing a repeatable asset acquisition and review process grounded in well-defined corporate goals is essential to a company’s overall IP and business strategy.

In my recent article, 5 Executive Reflections for Managing a Corporate IP Portfolio, I identify some of the biggest considerations facing corporate executives in establishing a streamlined and iterative portfolio strategy that aligns with the strategic needs of the business.

Twenty years in IP product management, software sales, and implementations taught me these 5 things are the most critical considerations for today’s corporate executives regarding their IP.

I. Patents Exist For Three Principal Reasons

  1. To protect products and product roadmaps from competitor theft
  2. To establish a defensive position to ensure freedom to operate
  3. To directly monetize assets and provide income for the company

II. Systematic Portfolio Reviews Win The Day, Every Day

Establishing a review process and fully documenting every IP asset a company holds is the critical first step to systematically managing an IP portfolio. Doing so supports R&D, product, marketing, sales, and licensing teams in innovating unique products, winning new business, and generating revenue.

III. A Sophisticated Foreign Filing Strategy Is Critical

The principal objectives for foreign filing are protecting revenue streams and blocking competitors, however, efficiency and affordability also predominate the strategy due to prosecution time and expense implications; blanketing the entire world in patent coverage simply isn’t practical.

IV. Map Patents To Products & Identify The Requisite Patent Landscape(s)

Mapping allows the business to track revenue associated with patents and to manage remuneration payments. Methodical patent landscaping provides deeper market analysis. An exhaustive landscape assessment can reveal principal patent holders in adjacent technology spaces, help determine if they’re actively competing with the company’s business lines, and provide insight into products that may soon hit the market.

V. Analytics & Reporting Enable Strategic Decision Making

Analytics tools provide a powerful look into internal operations, the market, and specific competitor practices. The tools available for big IP data search and analysis can help identify potential infringing products early in their lifecycle. Forward citation analyses and timelines can tell patent holders who’s getting blocked by their patents, and when, allowing them to assess licensing, divestiture, and litigation strategy.