CORPORATE PERSPECTIVES ON IP STRATEGY^[1]Britten Sessions and Chris Hamaty contributed to this article

IP Portfolio Strategies

A.         Implementing IP Strategy across the Company

A successful intellectual property (“IP”) strategy for a company links the company’s intellectual property assets to a company’s business objectives.  However, this is often not an easy task to accomplish.  For example, patent counsel has finite resources, must manage time in the face of competing demands, and amidst everything else, somehow develop a strategy for the patent portfolio. 

The issue is often that coming up with IP strategies is not a top priority – and that is completely understandable given all that patent counsel is often required to do.

However, key – and valuable – patents are often not the result of a chance occurrence.  Rather, they are often the product of a thoughtful and well-implemented strategy. IP strategy, therefore, is important because it is the backbone, the guiding post, and even the rubric by which you can measure not just the patent results-in-a-vacuum, but rather the results and returns in view of the entire market. 

1.         Write the IP Strategy down

Like many things in life, a strategy determined ahead of time and written down allows you to gauge your progress, shortcomings, and successes.  Having a written plan enables company patent counsel to distribute consistent information to clients, CEOs, and general counsel.  Additionally, having a written plan helps all in the company to deal with inquiries from media, investors, or company boards.  Given the fact that a business is often changing, an IP strategy should not be static – it should be reviewed and revised periodically (e.g., every six months).

A written plan provides a tangible record by which you can track your progress.  If you fail to plan, then you plan to fail.  But if you do plan, then it allows you to alter the direction of the portfolio as needed to ensure that the outcome adds value.

2.         Business Segments for IP Strategy

Many corporations are broken into segments for each of their business or product lines.  Similarly, IP strategy can be broken into segments of the enterprise or product lines.  As indicated above, a written plan should be developed for each segment.  Additionally, such a plan can accommodate additional segments for acquired businesses or technology, branding/trademarks, etc.

Although some IP plans can be elaborate, sometimes less is more. A shorter plan allows time for the company leadership to more thoroughly review and approve as needed. Additionally, the more concise the plan, the easier it is to disseminate such a plan to all other employees who may be affected in some manner by the plan.

For example, if part of the IP plan was to increase the number of filings of patents in a specific technology group, ultimately the engineers and researchers of your company may be responsible for coming up with patent worthy inventions. As such, even though they are not part of the C-suite, these employees should be informed of what the IP plan is, how they can contribute to achieving the goals of the IP plan, and be adequately apprised of any reward system in place for their contribution towards such a plan. 

3.         Set Guideposts for Expected Results

When creating an IP plan, include expected results and timeline of when such results can be received.  This is beneficial for three reasons.  First, including a date helps remind you to reconsider your IP plan (and potentially modify it as needed).  Second, these dates are a great opportunity to “check-in” with your outside counsel (who may in fact be the one implementing your plan).  Third, these expected guideposts give you some idea of how much the plan will cost, which allows you to go back to the company and in more precise terms, indicate the reasoning why the IP budget needs X dollars.

4.         Set Guideposts for Business Development

Business development relates to having a timeline to trigger an IP event.  For example, within each segment, an IP event may include product conception, finalization, testing, and even release.  As such, each stage in a product cycle’s life may directly trigger a specific IP event – preliminary drafting of IP, prior art search, search of competitor’s products, filing of a patent application, among others.

These types of guideposts can serve two purposes. First, it may trigger some type of an internal audit.  For example, is this invention worth protecting? Is this invention tied to a product which will be released in the next two years? Is this invention something which customers and the public will interact with, or is it a backend process which will never be made public? These questions can be tied to a specific time-triggered event, as noted above.

Second, these guideposts may help to also incentivize employees. For example, a reward structure may be set up such that employees receive a benefit once certain threshold requirements are met. For example, the guidepost of having an invention concept finalized and put into concrete terms may coincide with determining that the invention is ready to proceed forward with patent protection. Once such requirements are met, the employee may then be eligible for some bonus of some kind.

It should be noted that, in some instances, reward structure should not necessarily be dependent on whether the company decides whether to file a patent, but rather whether the inventor has put the invention in such a state where it is possible to proceed forward with invention.  In this manner, the reward system gives the benefit of an invention to an inventor regardless as to whether a company decides to keep the invention as a trade secret, or delay filing, etc.

5.         Set Guideposts for Licensing

Policies relating to handling received assertions or licensing proposals can quickly become a tangled mess.  If not handled appropriately at the outset, these can grow into larger problems.  As such, the IP plan should include policies of what to do if a license is concerned.

For example, some questions to ask may include (which may influence the policy indicated in your plan):

• Is this a perpetual license or a one-time event?
• Does the company have any IP assets which can be leveraged in some manner to increase our negotiation position?
• How will our downstream clients be affected?
• How will such a license increase the cost for the end-product?
• If the license is to be reevaluated and potentially renewed once every few years, how can company assets be aligned over the next few years to put the company in a better position to negotiate next time around?
• If the company is licensing out its IP, what encumbrance will it create for the company?
• What type of license(s) are being given from the company (e.g. ability to sub-license, etc.)?
• Does the company foresee needing to assert its rights in court in the next few years? Does this license affect such a desire in any way?

Developing a policy towards licensing will allow you to ask the right questions at the right time to keep the right doors open down the road. If the right questions aren’t asked when licensing or assertion issues are presented, you may effectively close doors on how your IP may be used at a later date.

6.         Internal Website

Often, companies have an internal website devoted to patents and IP.  At a minimum, the IP strategy plan, as well as associated policies and procedures, can appear on the internal website.  Additionally, the website could be used to assist in receiving potentially patent worthy inventions, serve as a repository for any relevant documents, track submissions by employees, display benefits tied to IP submissions, etc. In short, it can help to ensure that all members of the companies can be on the same page with respect to IP. 

7.         Developing a Process of Review

If your company has the capacity (and the need), you may want to consider automating or delegating one or more internal review processes.  For example, when IP is ready to be submitted, it may first be submitted to the internal website, which automatically determines whether the submission complies with basic set requirements (e.g. are all fields completed, was the invention disclosed more than one year before the date of submission, etc.).  If anything is flagged during this first stage, it can be automatically sent back to the inventor for additional work, or may be sent on to the next reviewing party, but with a note of the flagged issue.

The second stage may include a patent advisory committee that actually includes more than just the patent division of the company. It may include someone from R&D, marketing, or other divisions. The focus of such a committee would be to determine whether the IP has any implications relating to future releases of a product, whether there is a “need” to protect the invention in view of current plans being implemented, etc.  In short, it allows you to look at the business of developing IP within the perspective of business realities.

Stage three is implementation, which is often under the control of the IP counsel.  At this phase, the company has decided which IP should be pursued and has already given its stamp of approval on proceeding forward.  The IP counsel therefore works with internal attorneys/agents and outside counsel to complete the work, consistent with the results of stage two.

8.         Benefits of an IP Plan

Books and treatises alone have been written on this subject. However, a few items are worth mentioning.

An IP plan gives a focus to your IP. It almost sounds circular, but it does precisely that.  Rather than seeking protection in a vacuum, you set measurable goals and track your progress.  Progress can be measured based on quantitative results (e.g. number) as well as a quantitative analysis (e.g. applicability to competitors, accompanying claim charts, licensing opportunities, etc.).

An IP plan creates a culture for your company, and perhaps more importantly, for the employees of the company.  IP can be identified at the initial design, analyzed to determine if it is patent worthy, and linked to product releases.  Employees can be rewarded, track their progress, and feel a sense of accomplishment in knowing they are contributing and assisting the company in meeting its internal goals.

Lastly, an IP plan creates value.  How? It results in a higher quality – and more focused – claims with relevancy to your competitors and the market.  Patents can be strategically prosecuted in view of potential new licensing streams. Cost management is enhanced as you can allocate dollars to that which will yield the greatest outcome (or which minimizes the greatest risk/exposure). 

If there is one take-away for an IP plan, it should not be something that is done once and sealed away.  It should be analyzed, modified, and improved as time goes on. A trim here, an addition there – all of which may be necessary to achieve the intended result which is an IP portfolio that lives and breathes alongside the business goals of the company.

B.         Business Manager of Company IP

1.         Typical Patent Counsel Responsibilities

A company patent counsel will often have responsibilities which include patent prosecution, patent portfolio management, IP review (e.g. with respect to acquisitions, with respect to purchase, etc.), and IP mining.  Apart from the more substantive aspects of the job, patent counsel is often required to manage internal and external teams, assist with marketing, training employees, and being successful advocates of the company’s IP.

For example, as the representative steward of the company’s patent portfolio, the company patent counsel must be well versed in every aspect of the company’s portfolio.  What are the strengths and weaknesses of the portfolio? How does the portfolio compare to your competitors or to the market? How is the portfolio being improved? Or, how much is the portfolio costing the company, and is it worth it?

These questions require the patent counsel to constantly be engaged in an ongoing IP review.  What is new? What is old? What should be shelved? What should be sold? In view of the myriad questions the patent counsel must face, one of the roles of the patent counsel is to effective condense down all such information into bite size nuggets for the management to review.

Additionally, the patent counsel is often called to work directly with engineering teams.  In this capacity, the patent counsel looks at the invention from many different perspectives: 1) as a judge in determining the likelihood of getting a patent; 2) as a businessman in determining the value of the invention to the business or to product(s); 3) as a collaborator in assisting the engineers to think outside of the box; and 4) as a cheerleader in encouraging the employees to continue to innovate.

In working with the engineering team, the patent counsel may leverage the synergy between different products, and may even track such synergy in the resulting IP that is created. For example, an invention may have direct applicability to a first product line. While reviewing the invention, the patent counsel may see applicability to another product line and may pursue protection from both angles.

In a nutshell, the patent counsel’s responsibilities may be boiled down to two things: traditional patent prosecution and business management of intellectual property. 

The following gives an idea of some of the duties associated with management of intellectual property:

• Capturing IP in the course of development of a product or service
• Encouraging inventors to file disclosures
• Working with inventors to submit invention disclosures
• Ensuring IP is on file before a bar date
• Preparing IP strategy documents
• Organizing and attending IP reviews and IP mining sessions
• Bringing business knowledge to the product IP mining and review sessions
• Reviewing pre-existing IP, previously mined inventions, and already-filed patent applications to bring to IP reviews
• Identifying critical aspects of the product for higher IP scrutiny
• Documenting and maintaining the overall IP strategy for products to be shared with associated product managers
• Tailoring the product development process according to the IP strategy
• Organizing competitive landscape reviews
• Monitoring and reporting product IP status for management review and analyzing feedback
• Reporting on overall submissions for each product:  e.g., approved by patent committee / rejected by patent committee / filed
• Expediting important invention disclosures

2.         Lines of Communication

Given the fact that the patent counsel is constantly in demand and has a large list of todo items, it is vital that the patent counsel establish clear communication lines with the company, including product managers, engineers, review teams, etc.

As discussed earlier, it is good to have “triggers” in place (e.g. based on timing consideration) to trigger an action.  In much the same way, establishing triggers for your lines of communication may also simplify the process.  For example, the patent counsel may contact the appropriate product managers prior to an IP review to gather information (the trigger being an IP review) .  In such a manner, the patent counsel can ensure that an appropriate IP strategy is being applied to a particular product, that appropriate IP is being harvested from the particular product or service being developed, and that such information is being directed in an efficient and clear manner.

As a side note, since product managers in a company have busy schedules handling product releases, product managers may have concerns and may view being involved in IP reviews as a drain on their time.  More specifically, some product managers might think, for example, that they or their teams do not have enough time for an invention session, competitive landscape analysis, structured brainstorming or other IP capturing exercise.  Because of such, the company patent counsel may do two things to assist with this potential mentality:

1. Patent counsel should conduct as many preparatory IP activities as possible prior to the initial IP review or after product release so as not to overload the product development teams with IP activities.

• Patent counsel should make sure that product managers see the value of such an exercise. Yes, it does take time. But if they suddenly see IP as an asset that increases value for the company, rather than simply consumes their time, they may be more willing to spend such time in developing the IP.

IP strategy in conjunction with IP reviews can be systematic and occur at set time intervals. And, getting back to the point of this section, regular IP reviews is one example of establishing an effective line of communication (e.g. with the product managers).  Of course, other lines of communication can be personalized for the particular needs of your company.

C.         Context for IP Strategy

As discussed, IP strategy plans may be developed and implemented across all facets of, and in conjunction with, the corporate business environment.  An IP strategy plan assists in lining up IP efforts with the business goals of the company, as well as ensures that IP is closely tied to product(s). 

However, IP often is not simply obtained in a vacuum.  It often occurs with the full perspective of market players and competitors.  Some things to keep in mind when determining the context of the IP Strategy:

• Is the core technology of the invention protected?
• Is the Specification robust enough that it could be used in an offensive or defensive manner if needed?
• Can the patent be used to fence in your competitor(s)?
• Can the patent be used to increase your leveraging position for licensing negotiations?
• Should the patent be prosecuted strategically, meaning to have claim charts generated in parallel with the prosecution of the claims (to ensure solid mapping)?
• Should you keep the patent alive (i.e. file a continuation to keep the subject matter pending)?
• Should you pursue a consolidation effort of pending asset(s) to decrease management costs while still keeping the subject matter open for potential future continuations?

D.        IP Mining Procedure

In some instances, the patent counsel may handle some or all product development processes, including identifying patent-worthy inventions, assisting with invention disclosures, mapping inventions to product release(s), etc. In other situations, however, a product manager may assist with some of these needs, and may review the results with the patent counsel at a later time. This review process may be called an IP review.

In response to the request from the product manager, and in order to prepare for an IP review, the patent counsel should ensure that he or she has access to the resources necessary to understand the product(s) under development.  This may be an obvious point, but is often one that is overlooked.  The patent counsel assumes that all information has been received.  And the great irony is that the engineering group assumes that the patent counsel has received all such information. To eliminate any confusion between such groups, however, it is recommended that the patent counsel contact relevant product managers to ensure they have all information has been given or to request additional information before the scheduled IP review.

During the IP review, the company patent counsel may meet with the product manager and product experts.  Some of the agenda items for the meeting may include reviewing the features and goals of the product, determining whether there are any patentable inventions in such a product, and determining whether it makes business or commercial sense to proceed forward with patent protection.  For the patent counsel, these sessions allow for a rich harvesting of any patent worthy invention.  However, information captured before or after the meeting (often from other engineers or product managers) may additionally lead to more IP-worthy items that could be eligible for patent protection.

In some cases, additional IP mining sessions for the same product may be required.  This can result from a product being too complex or complicated so as to require more time.  Or, in some instances, the group may need additional subject matter experts or resources to determine product operation or potential.

After the IP review and any additional IP mining sessions occur, the patent counsel, in conjunction with the product manager, determines whether future IP review is required (e.g. at the next stage of commercial product or service development).  If so, the company patent counsel may schedule future IP review session to further develop the protection.

Often, patent counsel is responsible for identifying patentable inventions, driving submissions of written disclosures of the identified inventions, and ensuring that these are routed to the applicable patent committees for review.  The company patent counsel also tracks new invention disclosures.

Some of the desired outcomes from the patent counsel participating in these IP reviews of products and services include:

• Providing business context to reviews and mining sessions
• Creating IP strategy plans
• Creating overall management reports on IP reviews

In this manner, the patent counsel integrates IP business management with the company’s development of products and services.  Ideally, IP strategy is integrated early in product and service development (e.g. train the engineers on what is patent-worthy; determine what protection your competitors currently have and invent around it) to complement IP reviews.  After each development stage or milestone, it is a good idea to have an IP review sign-off requirement.  This emphasizes the importance of IP at each stage of product development.

1.         Effectively Reporting

Reports, reports, reports. Sometimes it may feel like a patent counsel is always generating reports. However, if your intake of IP mining is effective, reporting of such inventions may be already be completed.

What is needed at this stage is to distill such detailed documents into simple tidbits of information. 

IP reports may be created for management and business unit leadership, including a breakdown of the patent portfolio in terms of:  total number of invention disclosures, granted patents, allowed applications, applications published, abandoned applications, etc.

As another example, IP reports for management might break down the total number of invention disclosures by topic, subject matter, or classification keyword.  Additionally, the IP reports might break down the total number of patent applications filed by month, quarter-year, or year.

Lastly, a report may focus on the key inventors of the company (those who have previously produced pioneering inventions).  An example IP report might focus on such inventors and their invention submissions, and how those inventions have been handled by the patent committee, outside counsel, and/or the patent office, e.g., approved, filed, in prosecution, allowed, granted, etc.

IP Business Strategies

A.         Acquiring Business Knowledge and Perspective

Business knowledge should guide the development of IP strategy, including potential business obstacles, competitors, the market landscape, financial constraints, demands of investors, etc.  The patent counsel identifies such potential business obstacles and works to address them by bolstering the company’s IP portfolio.

For example, a hypothetical company may be developing a software application in the field of health care technology.  The hypothetical software application relates to “intelligent alerting” and “access to electronic medical records”.  In order to develop an IP strategy for protecting the hypothetical software application, the following are example potential business obstacles or challenges. These questions are intended to help the patent counsel get a full perspective of business considerations in the exemplary health care technology field.

1.         Example questions addressing business obstacles

• What is my company doing now commercially in the health care industry?
• Are we currently developing or designing any systems related to “intelligent alerting” or “access to electronic medical records”?
• What kind of additional investment will be required?
• Will we need to block a competitor to be successful, or can we coexist with our competitors in this field?

2.         Example questions addressing market obstacles

• Is a competitor acquiring market share and/or penetrating into hospital IT departments?
• Who will my company’s customers be in the health care field?  Will they be organizations or people?
• Do we need to be concerned about the company’s brand or brand strength?

3.         Example questions addressing product obstacles

• Can any of my company products or technologies be leveraged for success?
• Which of my current products or technologies is relevant to the health care field?
• Will success in the health care field allow my company to sell its other products into the health care field?
• Will joint development and/or partnering be necessary to create solutions for “intelligent alerting” and “access to electronic medical records”?
• Will my company start selling new products? If so, when?

4.         Example questions addressing technology obstacles

• Will we need to partner with companies that develop applications for my company’s device?
• Will the technology developed be mostly handheld-related or infrastructure-related?
• How long in time will the technology last?
• Will changes in the health care industry, such as insurance changes or mergers and acquisitions, affect technological platforms?

5.         Example questions addressing invention obstacles

• Will we own the inventions created from a joint development project with another company?
• Are there others outside my company who will be inventors?
• Will we need to acquire IP to accomplish development in this space?
• Will we need to acquire funding from a government?

6.         Example questions addressing IP obstacles

• What IP do we have that covers the solutions we will be providing?
• What if IP belonging to others blocks access to this field?
• Will filing patents help us enter or compete in this market?
• Will the prevailing technology change before patents are granted?

7.         Example questions addressing human resources obstacles

• Does my company have enough know-how internally to design solutions for this field?
• Does my company have enough human resources to complete development in this field?
• Will our employees need additional education or skills to perform in this field?
• If an employee leaves our company, will his or her skill set be replaceable?

B.         Applying Business Management

To successfully apply business management to company IP, the patent counsel actively manages the lifecycle of the company’s IP portfolio as an actual product portfolio, and endeavors to maximize value creation and control costs for the company.  IP strategy can be broken into several aspects, such as core technology protection, market penetration, offensive and/or defensive use, and applied to business strategy, IP operations, and development of tools, processes and additional resources.

The patent counsel has the responsibility to identify all IP issues that may impact the success of each product and implements the IP strategy (personalized as needed for each product) to ensure success.  Additionally, the IP strategy may be created to ensure that all financial resources required for timely implementation are already part of the calendar plan and current approved budget.  Additionally, the patent counsel fills in any gaps and develops areas relating to invention disclosures, strategic initiatives, deficiencies, advanced inventing, and acquisitions.

For each business segment, product line or product, an IP strategy may be documented and actively used and followed all the way through product and service development. This process would allow the patent counsel to ensure that all originally identified patent-worthy inventions are protected, while allowing for new concepts and developments to be further captured.

As the product progresses, the patent counsel may implement the appropriate strategy to filings, applications in prosecution, and maintenance fees and annuities.  A patenting strategy is documented for each approved invention from the patent committee thereby documenting the rationale behind each decision.

With all of this documentation (what we can call competitive and market intelligence), the patent portfolio may be leveraged for industry standards, product marketing, licensing in, licensing out, divesting, asserting, claim charting, pools, trusts, and financial reporting. In short, this type of information allows you to take the company IP and show at least some of its potential value.

While all of these reports may be used to make strategic business decisions, it also has a tangential benefit – documenting which inventors at the company are responsible for the company’s IP. In view of such, it may be appropriate to use these reports to further the culture at the company. Consider having inventor awards, awards banquets, and/or press releases.  At a minimum, these reports may be useful to managers in recognizing their team members who are producing valuable innovations.  In some instances, as mentioned previously, a reward structure may be followed to provide compensation to employees.

Asset Management Strategies

A.         Quantify Innovation

How does one value innovation? Is it “in the eyes of the beholder”? Or can we quantify it in some manner to make it more consistent? The focus of this section is to objectively identify value.

Management of the patent portfolio requires knowing its value.  One method is to rank, grade, and classify all inventions within the portfolio.  And because you are likely managing many assets, the more you can rank, grade, and classify in terms of a numeric value, the easier it is to search and assess the strength of your portfolio. For example, each invention can be coded with four numerical values: 

1. value to the product or service
2. value to the market (i.e. would competitors want to license it?)
3. how easy it is to detect and prove infringement?
4. how easy it is to design around?

Each family member in the portfolio should be classified, at a minimum, with these four numerical metrics.  This enables portfolio strength to be valued numerically and aids in sorting, filtering and leveraging the patent portfolio.

Additionally, different portions of the portfolio can be analyzed by keyword, and can be numerically ranked using these metrics, which aids also in identifying any gaps or deficiencies in the portfolio.  For example, the value of an invention or patent application can be based upon product relevance of the invention, its relevance to the target market, the ability to detect infringement of the invention, or the ease of designing around.  Combinations of these attributes can be used to measure the value of the portfolio or segments of the portfolio.  Further, thresholds can be defined to identify high-value and low-value inventions or portfolio segments, sometimes even automatically (e.g. via your internal website).

Being able to assign a number to the asset allows you to establish a consistent ranking for all assets, thereby allowing you to get a bird’s eye sense as to the value of your portfolio.

In addition to the global type perspective, assigning a value to an asset may have implications at each stage of the patent lifecycle:

• Initial development (i.e. is it even worth protecting)
• Filing decisions (i.e. if it is of higher value, should we expedite the review process?)
• Prioritization and management (i.e. funds should be diverted for XX asset before YY asset)
• Identification of strengths and gaps for further development

B.         Management of Human Resources

We have discussed many important areas of management. One of the most important assets a companies has is its own employees. The patent counsel must, therefore, work effectively with multiple groups to achieve the intended result.

For example, having a process to approve inventions outside of the patent committees, and having a special patent committee for expedited invention disclosures can yield beneficial results and make the review process more effective.

Additionally, it is beneficial for the patent counsel to spend time engaging with internal customers inside the company, as such engagement leads to product, business and market knowledge which may directly influence the IP strategy plan. Company vice-presidents are key internal customers.  Therefore, the patent counsel should have periodic meetings with management in order to emphasize the relevance of IP strategy and ensure that such an IP strategy is in alignment with business goals and initiatives.

Another important internal customer is the everyday engineer and product manager. To effectively disseminate the IP strategy, the patent counsel may wish to use a variety of tools to connect with all employees, including forms (to solicit feedback or question), software, internal website, handbooks, marketing material, and training sessions on IP strategy.

The patent counsel also interacts with outside parties, often in the context of licensing.  In managing such interaction, systematic and structured inputs (as far as procedures for dealing with outside parties) allows the patent counsel to amend the IP strategy operations as needed (e.g. based on information coming from outside sources) while still putting in play a systematic way to respond back to any inquiring party.

As with any organization, confidentiality and secrecy are part of overall strategic imperatives.  In view of such, it is important that confidentiality be maintained throughout the entire organization. In some instances, improvements to processes or new inventions may involve labeling of documents as “Confidential”, “Trade Secret”, etc.  Additionally, the patent counsel may need to redact portions of a document to ensure that information is kept private, even when such documents have been made available to other parties or the public.

C.         Management of Product Releases

Patent counsel should coordinate IP activity for major product and service releases, including ensuring that the value of the asset is properly assigned, or managing incoming product-related IP (e.g. in the case of an acquisition) to ensure such assets are properly submitted, reviewed and tracked.

Given the fact that the patent counsel is (or should be) aware of the products and software being developed, he/she should be also aware of when various milestones occur.  A software roadmap (as far as stages in the life cycle) can be one such source of information which may allow for calendaring IP action items with the life of a product.

As a specific example, in the case of a software product, an IP plan should be correlated with the release of the software version.  For example, each type of software may have a different cadence or schedule of release or upgrade.  In view of this, IP reviews and IP mining should be automatically calendared and planned based on the software cadence.  In some instances, it may make sense to record these events in the docketing and portfolio management system.  If such features are not available, the docketing and portfolio management system should be amended to allow for tracking and reporting IP.

D.        IP Plan and Mining Logs

As has been emphasized elsewhere, accurate record keeping is an essential ingredient for effective management of IP.

An IP strategy plan may refer to a central document which provides the global goals and overview of the IP of the company.  Additionally, an IP strategy plan may also simply be a “strategy plan” that results from meeting with a product manager, engineer, etc.  After such a meeting, it may be good to capture the essence of what was discussed by going through the following items:

• Roles and responsibilities
• Product description
• Targeted product release date
• Breakdown of technical areas and innovations with planned IP mining sessions
  • Technology Area, e.g., different parts or sections of the product or software
  • What about this technology area are we interested in?
  • Contacts from product team
  • Recommended timing and number of IP mining sessions
• Key technologies from other products that will be in this product
• Type of protection sought for the product, select from:
  • Large footprint with multiple filings
  • Perimeter or picket fence
  • Jumbo patent application
  • Defensive publication
  • Maintain as trade secret
• IP Filing schedule
• Invention disclosures currently applicable
• Patent applications currently applicable
• Granted patents currently applicable

After an IP mining session, the company patent counsel creates an IP mining log, which may also include the following items:

• Product name
• Deadline for invention submission
• Reason for deadline
• Meeting minutes
• Date
• Time
• Who was there
• Follow up on actions from previous review
• Notes
• New action items
• Table of identified innovations containing:
  • Title
  • File-by date
  • Who the inventors are
  • Lead/submitting inventor
  • Ratings (product relevance, market relevance, ease of detecting infringement, ability to design-around)
  • Suggested classification keyword

E.         Improving IP Efficiency

One goal of the IP department is often to protect high-value product-related IP while minimizing impact on company business and development resources. This is not an easy feat. Nonetheless, there are steps which can be taken to make the process more efficient. In the context of improving IP mining efficiency, the following items may assist:

• Prioritizing incoming products by levels of importance
• Leveraging available product information to focus mining in key areas
• Conducting IP mining earlier in the process
• Obtaining guidance from licensing/litigation to focus mining efforts
• Working with management to identify areas likely to be valuable in the future

Depending on the size of the company, the pace of invention, or other factors, the company may have a single general patent committee, or there may be several subject matter-based patent committees each dedicated to a certain area or segment of the company’s technology. The focus of these focused groups is to enable more efficient and effective review (i.e. they each can focus on one specific element to analyze). 

Additionally, it may be beneficial to set up a special urgent patent review committee dedicated to pressing or expedited inventions.  An urgent patent committee may be used to deal with individual attorneys handling urgent events inconsistently (which can arise when a lot is going on in a short amount of time), and managing a large number of urgent inventions being filed as provisional applications (and tracking them to later be properly accounted for in the non-provisional).

The urgent review patent committee can be scheduled when needed without much lead time.  In some instances, the patent counsel may work with the urgent patent committee to manage incoming invention submissions with critical deadlines.  One of the benefits of this type of committee is that they can provide a fast decision. In view of such, you will want to staff the urgent review patent committee with members who understand the business, technological, and legal implications, and who have the knowledge needed to juggle all such pressures in an effective manner. In a best case scenario, the urgent patent review committee may review invention submissions (labeled as “high priority” or with a high numerical value) within a few days of submission.

Exemplary outcomes from the urgent patent review committee may include: 

• approve for filing a utility patent application
• approve for filing a provisional patent application
• decide not to proceed
• decide to forward to a regular subject matter based patent committee for further review.

Additionally, if the urgent patent review committee decides that the regular patent committee is better suited for the invention, it may beneficial for the urgent patent review committee to provide feedback which may affect the valuation (e.g. numeric value, etc.) associated with the patent asset.  In this manner, the valuations of assets is evaluated and potentially modified based on the determination of the committee.

Occasionally, key IP from the company’s most important inventors may get bogged down through normal patent processes (i.e. internal hierarchal review processes).  One possible solution is to identify inventions from certain inventors as “expedited”.  In this manner, all incoming expedited IP is flagged for expedited action by the patent counsel, and potentially by other committees as well.

To expedite the process further, these inventors can be involved in the process and tasked with selecting the appropriate processing, such as “immediately approve and file”, or “subject the invention to ordinary review and processing in patent committee”, as warranted. 

F.         Overlooked IP

Another challenge to patent portfolio development in a corporate environment is a large number of unfinished invention disclosures.  More specifically, if the company website provides a web form or website process for memorializing and submitting an initial invention disclosure, often many invention disclosures are incomplete, saved as drafts, or not finally submitted, and therefore not immediately acted upon.

For example, a company’s internal website based submission process can accumulate hundreds of draft invention disclosures, with many added weekly or monthly.  Sometimes invention disclosures from targeted brainstorming or advanced invention sessions are also not always completed in a timely fashion.  This can result in much valuable IP being unprotected, becoming stale, or losing a good filing date. 

Several solutions exit.

First, the patent counsel should work with the patent committees to ensure timely processing of draft invention submissions.  The patent submission system should generate automated reminders at periodic intervals after draft creation, which go to the lead/submitting inventor.

Second, for invention disclosures submitted through the company internal website system, as well as inventions resulting from targeted brainstorming or advanced inventing sessions, the chairs of the patent committees or the patent counsel drives invention disclosures to conclusion (i.e., revise deadline, secure submission, or close them).

Third, periodically, the patent counsel may need to run a report to determine whether there are any incomplete invention submissions.

G.         Business Context

We have discussed the need to align IP strategy with business goals. Realistically, however, inventions may surface from the patent committee lacking business context.  This can be improved.

The patent counsel should actively participate in patent committees to provide big picture business context, relevancy to product plan, and relevancy to the market. Additionally, it may make sense to initially segment high and low priority inventions before review in the patent committees (thereby implicitly assigning a business value to such assets). 

As a practical tip, the patent counsel can embed keyword categorization  (e.g. value of the asset, business context, etc.) into each of the patent assets so that such knowledge is known and tracked appropriately.  Additionally, embedding such information allows you to later have a search-ready index to locate specific assets satisfying set criteria. Further, these keywords may need to updated as new products emerge and markets change, so that the assets are kept “up to date” and relevant to today’s conditions.

H.        Processes Should Be Periodically Audited

Processes are successful if they are being followed.  Often, however, with respect to large complex organizations located throughout the world, inconsistencies develop in how processes are run and what information is preserved from such processes.

For the patent counsel, two areas where inconsistent processes can cause risk to company IP are:  1) records of employee assignment of ownership of intellectual property to the company; and 2) approved software usage policies.

While employees are constantly innovating, and utilizing resources and means provided by the company, the company needs to secure formal ownership of IP rights to inventions and works created by the employees.  Processes need to be established therefore so that IP is adequately assessed and captured if desired.

Software licenses can be extremely complex – and may potentially taint organically developed software as well. As such, any software used should be approved, and more specifically, its associated license approved before the software is utilized by or within the company.  A proper audit of IP, therefore, should include an audit of software, and any associated license, as well.

Usage of software to develop products, or usage of software within products, touches upon product development.  It is therefore important for the company patent counsel to engage with engineering and product development leadership to explain the importance of following approved software policies and determine how and when to conduct an audit.

As far as pragmatic day to day responsibilities, auditing generally involves multiple parties within the organization.  In some instances, human resources or compliance may be utilized in some manner to ensure a successful audit.

Corporate IP Market Strategies

A.         Corporate Acquisitions

Company business transaction teams are constantly on the lookout for opportunities to increase revenue, and often, there are many deals or transactions being contemplated at any given moment to further an IP strategy plan. 

In view of such, the patent counsel needs to know the members of the business transaction teams.  Routine engagement with business transaction teams is key to understanding the technology and business being examined for acquisition.

The patent counsel needs to be able to recognize the difference between actual value of a potential acquisition versus simply good sales marketing.  It is often easier to explain why a deal should happen than to highlight unreasonable risk to the company. As such, it is good practice to consider the potential strengths and weaknesses of the patent portfolio to be acquired, and in particular, to evaluate such in the context of the company by asking specific questions, such as:

• how does the IP strengthen the company’s products?
• how does the IP strengthen the company in the marketplace?
• how does the IP strengthen the company with respect to competitors?
• Is the IP redundant in any way with current IP?
• Is there a lower cost alternative (e.g. brokering for IP assets) which would produce the same results?
• Will the acquired company’s IP be managed solely by the patent counsel – or will there be any division of responsibilities (and potentially of uniform structure)?
• What risk will be incurred by purchasing the IP (e.g. financial responsibility, litigation liability, etc.)?
• What is the business strategy of the potential acquired company?
• What is the company’s purpose in buying the technology? Is it for the IP? Is it for the product?
• What is the commercial purpose in buying the technology?
• Will the company be able to use the technology for its intended purpose?
• Will the company’s ability to use the potential type of technology be impeded by:
  • a business limitation, by a previous legal settlement that prohibits the company from doing something, by a business partnership or joint venture; or
  • encumbrances on the acquired IP.

With respect to acquiring the rights to the IP, note that it is possible that the acquired IP might not be able to be used by the acquiring company.  This could be the case, for example, because the seller might not actually own the IP, all of the IP, or have the ability to sell its ownership or its license to use the IP.  Perhaps the selling entity may only have a limited right to use the IP they are purportedly selling. As such, it is vital to conduct a thorough IP audit for any asset that the company may be potentially acquiring.

Another issue is split ownership. For example, if the acquired technology is owned as a whole, or at one level, by the seller, but within the acquired technology there are pieces or modules that are owned, encumbered or licensed from another party who would not consent to the sale, or the intended use by the buyer, then the company may be precluded effectively from having access to the rights of the IP. 

This is particularly true in the software environment where many software applications contain numerous modules of other software applications.  Ownership of the copyright in all portions of the software and the ability to transfer copyright to all portions of the software are often complex issues and difficult to determine to an acceptable level or risk.

Accordingly, it is important for the company patent counsel to understand true ownership and usability of what is being acquired, the actual detailed purpose for which the company is buying the technology, and precisely how the acquired technology will interconnect and operate with the company’s preexisting technology and intellectual property.

B.         Areas to Implement IP Strategy

IP strategy can surface in almost any business context. However, IP strategy may also vary over time along with changing company performance, budget constraints, and business goals. 

Some general areas in which the patent counsel may consider pursuing IP strategy may include:

• Product IP mining
• Patent committee business support
• Urgent inventions and expedited inventors
• Patent prosecution guidance
• Patent portfolio analysis
• Due diligence in M & A transactions

As emphasized, IP strategy should not be static. As such, the amount of time devoted to each of these areas may change as the company IP strategy evolves over time.

Clearly there are numerous opportunities along the lifecycle of the patent portfolio for the company patent counsel to implement IP strategy, provide business insight and context, and create value-producing IP. For example, each of these junctures is an opportunity for the company patent counsel to apply IP strategy:

• unsolicited inventions
• inventions from IP reviews
• focused conceptual inventing sessions
• feedback from subject-matter patent committees or the urgent patent review committees
• decisions relating to whether to file for patent
• after filing, decisions relating to how patent applications are prosecuted
• after filing, decisions relating to tailoring claim sets to potential infringement
• near allowance, identification of market applicability to improve claims
• near allowance, decisions on whether to file a continuation to keep the subject matter alive
• after granted, decisions relating to how patents are categorized within the patent portfolio
• due diligence associated with M & A transactions

An often overlooked area of IP strategy is with respect to public searching.  For example, the patent counsel should incorporate public data search to increase the quality of decisions, particularly as it relates to areas being reviewed by any of the patent committee. 

Additionally, to emphasize one time-sensitive component included in the list above, when a claim set has been allowed, it should be determined whether new claims for a continuing application should be considered. In some instances, such new claims may have direct relevancy to potentially infringing products or features.

With respect to M & A transactions, the patent counsel should be involved in pre-transaction evaluation of IP assets and post-transaction harvesting and idea creation.  After the transaction is complete, the patent counsel should manage recordation of new ownership title for all acquired patent and IP assets.

Although this manual has focused primarily on non‑litigation related activities, the patent counsel may provide support to licensing or litigation teams as needed.  This is to the benefit of the litigation team as the litigation goal can line up with the IP strategy plan and the business goals.  Additionally, this is to the benefit of the patent counsel as he/she gets additional exposure to licensing considerations (and the pragmatic risks) associated with litigation.

Conclusion

We conclude where we began. IP strategy is something you can be involved in.  It is something that, when effectively managed, can live and breathe alongside the goals of the company itself.  And perhaps more importantly, implementing IP strategy can create real value for the company.

IP strategy involves creating and using IP to pursue and achieve company business objectives, including identifying business obstacles to the company’s business objectives and bolstering the IP portfolio to help overcome those obstacles.

As discussed, valuable patents are often obtained by planning and securing a desired outcome.  Additionally, IP should be created and managed like a product, from concept and design, to execution, improvement, and sale.

Therefore, like a product, processes may be put in place which are tied to the IP strategy.  The results of such processes may be measured (and even quantified), and the IP portfolio may be subsequently valued.  Based on measured results, the IP strategy may be updated and modified.  Lastly, as the company business objectives change, the IP strategy may be further updated.

The goal is that IP becomes something more than merely a piece of paper defining protection. It can be transformed from corporate wallpaper to actual tools to increase value.  It can improve your seat at the negotiation table. And, perhaps most directly, it can assist you in succeeding in your job in maximizing profits for the corporation.

Good luck in protecting your IP!