Are You Maximizing Your Intellectual Property? Generating more value in the innovation era

Today’s pace of innovation and competitive intensity demand greater protection of new ideas and inventions. Yet intellectual property (IP) management is not a high business priority for many companies. Organizations that fail to recognize IP as a strategic asset put their competitive advantage and profit margins at risk. Companies can circumvent these potentially adverse impacts by maximizing the value of their creativity. Prioritizing and protecting IP assets helps organizations stay in front of competitors and drive greater growth.

The view from the CIPO suite

Today’s CIPO faces at least six major pressure points:

1. Risk management—Keeping the business informed as the expert on both the legal and business risks of IP as the landscape constantly shifts.
2. Building Innovation-driven value—Reaching deeper into the R&D function to find innovations that matter, and operating effectively to create and grow resulting IP assets.
3. Maximizing return and protection—Developing partnerships to commercialize patents that have evolved into assets.
4. Cost management—Making informed investment decisions to maximize return on budget while justifying the expense to the business.
5. Supporting the business strategy—Seamlessly linking IP to the rest of the company’s competitive and product strategies.
6. Educating the business—Helping the rest of the C-Suite understand that factoring IP-driven insights into key business decisions will help the organization’s long-term performance and reduce risk.

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Trends that demand change

Additionally, five major trends are driving the need for IP to evolve substantially:

First, changes in U.S. patent validity and enforcement are causing ripple effects across industries. For example, the 2014 U.S. Supreme Court “Alice” decision has had a profoundly adverse impact on software and business method patents. Also, the America Invents Act has led to the U.S. Patent Trial and Appeal Board striking down thousands of patents. As a result of this policy climate, businesses can no longer assume that their U.S. patents are valid when opposed. These developments have also increased time, costs and risks for U.S. litigation, in effect strengthening licensees’ negotiating power. Consequently, companies are taking stock of their U.S. IP portfolios and are in search of the next-best enforcement jurisdiction.

Second, technologies are crossing over from other industries faster than ever, driven by trends such as mobile apps and the Internet of Things. For example, prior to 2010, patent applications for robotic lawn mowers barely existed—at less than one a year. However, the cross-over from other industries including robotics, wireless communications, and GPS has pushed robotic mower patent applications 20 times higher globally over the each of last five years.

Third, some leading IP organizations are shifting from an invention-driven function to a competition-driven function. Traditionally, companies canvassed inventors’ patentable creations, which went through a review process based on product features. But today, because IP provides a right to exclude others, some CIPOs are pushing competitor intelligence to the front of the review process. This now requires identifying a specific competitor that may be blocked before moving forward with investing in protecting the invention.

Fourth, China’s rising economic position has created opportunities, but it also presents a number of threats. Patent filings in China surpassed the U.S. in 2011, and they are still growing at more than 20 percent a year, thanks largely to government incentives. However, Chinese patent applicants file only in China. In fact, Chinese inventors file only 0.5 percent of their patents outside their home jurisdiction, compared to almost 50 percent for U.S.-based inventors. This trend requires a close watch on Chinese patent filings for relevant filings and emerging competitors.

Fifth, the explosion of patent data means that the traditional manual patent search, data cleanup and patent analysis efforts will become slower and more expensive. The first U.S. Patent and Trademark Office online search tool (developed in 1998) provided searchable access to two million patents. Today, there are more than 100 million patent documents, and that number continues to rise each year. Meanwhile, the global number of patents in force has doubled over the last eight years, according to World Intellectual Property Organization.

Advancing the IP agenda

To overcome these challenges and meet ongoing pressures, CIPOs are rethinking the organization, skillsets and technologies of the IP function. Transforming IP’s impact requires analyzing both the group’s effectiveness and the efficiency of each task it performs. Today’s CIPOs are looking specifically at what the team is doing, and the time and effort it takes to achieve its goals.

At Innography, we’ve developed a five-step process to improve efficiencies, maximize IP’s value and inform a broad range of business decisions with IP-driven insights.

1. Focus the team’s time

The first step is to enable the IP team to move away from rote clerical work, toward higher-value analysis and advisory tasks. Companies should strive to automate the IP lifecycle and processes to the extent possible and hand off generic clerical tasks to a specialist service provider.

2. Be proactive

Many IP professionals would characterize themselves as reactive, responding to process tasks and requests from business stakeholders. Freeing up their time to generate analyses to support business questions and decisions is a step toward increasing responsiveness. The next step is to provide relevant IP information and insights proactively to business stakeholders.

3. Engage the enterprise

A proactive stance will open the company’s collective eyes to the possibilities of what accurate and timely IP-driven insights can do for decision-making, creating more advocates in the enterprise for the IP organization’s efforts.

An important step in this process is providing accurate and useful information to the rest of the business. That may entail an IP specialist curating and supplying specific information to ensure that any decisions reflect the nuances unique to IP. Specialists can create custom dashboards and periodically pass them on to stakeholders, for example, to share useful information in an easily consumable format that can help start relevant discussions. 

4. Measure and monitor

Enterprises should measure and benchmark their IP processes to gauge their effectiveness and discover opportunities for improvement. Typical process measures include cost, quality and time. The IP team can analyze each of these metrics specifically to understand how efficiently the process operates and where it can improve. As the process owner, the CIPO should have a dashboard that clearly spells out key process metrics and exceptions.

An additional critical element for IP is benchmarking your process against key competitors. Many IP-related questions can only be answered relative to competitors, such as, “In this new technology area, are we ahead or behind?” Patent filings and other patent-related activities (purchasing, selling, litigating or abandoning patents, for example) provide a wealth of information on competitor investments and intentions.

5. Develop strategic partnerships

As you look to work with software and service providers to achieve your vision, it is critical to select partners who are driving toward an aligned vision. Clearly, providing full context to decisions in the IP lifecycle (including all public and private data) is key to achieve positive and lasting results.

Because many of the IP solutions in the market have been relatively stagnant for so long, you should seek a partner that is constantly improving and investing in its solutions based on client input. This will ensure high value for many years to come.

Today’s business complexities and fast pace of change—combined with the opportunity to inform so many business decisions with IP-driven insights—mandate that companies rethink and adjust many of their IP efforts. Overcoming the hurdles to change requires a thoughtful strategy and a commitment to constructive partnerships within and outside the business. This will not only enhance IP’s value in the enterprise, but also position companies to better protect their innovations and accelerate growth.