Patent portfolio management today is about businesses looking at their assets in new ways. Businesses traditionally have viewed employees as their most important assets — and rightly so. However, for a variety of smart reasons, 21st century businesses are rethinking the way they look at and value assets. Historically, intellectual property, such as patents, trademarks and copyrights, have been managed as line items on investor reports. Previously a passive intangible asset, businesses are taking stock of their intellectual property by building and managing their portfolio to secure a competitive advantage and build long-term revenue streams where none existed previously. For example, according to a Stanford University study, in 2011, for the first time Google and Apple spent more on patents than on research and development. Significantly, many of the companies that weathered the recent global economic downturn the best did so in part because they used intellectual property to develop a revenue stream and enhance shareholder value.

IP portfolio management, and more particularly, patent portfolio management, begins with a well-defined strategy. This article series outlines steps in the process, including identifying business objectives, understanding the value of having a plan, and executing the plan. Portfolio management strategies differ based on size of the company (e.g., startups vs. established companies), technology, and service market areas and other particulars.

Identify your business objectives

A business’s objectives often depend on industry and company size, as well as certain strategic considerations. For example, is the business looking to offer a new a product or service, gain market share, set the company up for acquisition, increase revenue, etc.? Businesses have different objectives and different priorities for those objectives. Successful businesses use patents, copyrights and trademarks as tools to achieve those objectives. However, the manner in which an IP portfolio is developed and used can vary drastically depending on the definition and priority of the objectives. Startups looking to position themselves for acquisition may prefer to develop their portfolio internally and be stringent regarding licensing to distinguish themselves from competitors in their market space. On the other hand, when looking to offer a new product or service, a successful company may seek acquisition and cross-licensing arrangements for a “softer” landing in the new space. Identifying such objectives at the outset is important towards developing the strategy necessary to achieve those objectives.

Develop an IP portfolio management strategy tailored to achieving those objectives

Proper development and use of patents within an IP portfolio can make the difference between success and failure. Many startups have innovative ideas but limited funding, and failing to protect intellectual property may be the downfall of a startup. For example, patent applications with inadequate disclosure that do not mature into an issued patent can serve as damaging prior art later on and a template for copying by competitors. On the other hand, overspending may siphon much needed funds from research and development or marketing. Successful start-up businesses are wise to consider investing in a few well-written patent applications with multiple well-disclosed ideas early on. Later, when funding is more prevalent and looking to gain market space exclusivity, the company may look to aggressively expand the patent portfolio with continuations, such as developing a family of patents from one or more parent applications.

On the big business side, a successful strategy may be based on identifying, developing, and protecting the crucial core concepts of the company — the “crown jewels.” For these important concepts, the strategy may include spending more on preparation and prosecution, filing patent application continuations for broader claims, and aggressively monitoring and pursuing competitors entering this space. On the other hand, for those concepts not determined to be “core,” the most effective strategy may be to employ a more budget-conscious perspective. These situations call for a more conservative approach to filing patent, copyright and trademark applications. File applications for concepts that are easier to commercialize, such as application layer technologies and trademarks for brand identity marks. The goal should be to look for a direct return on investment with licensing and enforcement opportunities. Bottom line, there are a variety of options for portfolio management — each with their unique advantages and costs. Tailor the strategy to achieve the identified objectives.

Implement the plan in your business and commit to the plan from top to bottom

Identifying and protecting intellectual property should be a part of the culture of the business. Educate the inventors on the steps for and importance of protecting their innovations, such as how to identify when an idea is patentable, what is a fully enabling disclosure, what are alternative embodiments or potential design arounds. Patent-savvy inventors can reduce the time from conception to filing, which may be critical in the current America Invents Act (AIA) first-to-file system. In addition, inventors can serve as critical resources for overcoming art rejections and for monitoring their field for potential infringers. Meanwhile, marketing and sales personnel can play a valuable role in driving the market towards a business’s protected core concepts and developing goodwill for the brand. Implementing the portfolio management strategy should be a focus of the business as a whole — not an overwhelming focus that distracts from research and development or other important functions – but more than just a one person or single department job.

Businesses have different definitions of success. Similarly, there are numerous different strategies for managing an IP portfolio, each with their own unique risks and rewards. There is no “one size fits all” approach to patent portfolio management, but there are some common traits that successful businesses share. Those traits include proactively identifying the objectives of their business, then developing and implementing a patent portfolio management strategy that will help their business obtain those goals.