PATENT VALUE Some companies will want
“STARTING WITH AUTOMATED TOOLS OFTEN DOESN’T WORK BECAUSE THEY START FROM A PRE-DETERMINED TAXONOMY THAT MAY NOT BE RELEVANT TO THE BUSINESS AND MAY NOT POINT OUT WHAT IS MISSING.”
the portfolio
assessment to be a collaborative process, where in-house teams work with the external consultants to build up the most accurate picture of the market and their position in it, but others will out-source the entire process. Whichever way they choose to do it, companies fi nd it to be a good investment.
McLean explains: “One company in particular that we work with, is generating hundreds of millions of dollars in licensing revenue—that’s something they’ve consistently done for decades. Having a broad understanding of
their patent
portfolio allows them to maintain that level of revenue generation.
“Another client has pruned its portfolio by 30 percent, reduced maintenance costs, and been able to sell more than 10 sets of patents to bring in revenue to fund other IP activities. In the process, they also discovered some key assets required to defend key products, which they weren’t aware of before.”
And with all of the controversy around assertive licensing and so-called ‘patent trolls’, is there a diff erence in behaviour between NPEs and operating companies when it comes to patent assertion?
create a custom taxonomy that’s relevant to a given company and its industry. Starting with automated tools oſt en doesn’t work because they start from a pre-determined taxonomy that may not be relevant to the business and may not point out what is missing. We’re big advocates of human intelligence in creating the taxonomy and then using automated tools to populate that taxonomy aſt er the fact.”
For TechInsights, “building structure means organising the portfolio, and sorting it in groups around technology, products or markets is essential”.
“T e next step is to evaluate the assets within those groups. So, for example, you may discover that in group X you have fi ve assets that are strong, 10 that are average and 20 that are weaker. You can then use this information to identify how to realise the most value from diff erent parts of your portfolio, what parts of your portfolio require additional development, and if your overall patent strategy needs to be better aligned with your business objectives.”
McLean estimates that vast numbers of patents are currently under-utilised in most technology industries, but it’s one thing to know that your patent portfolio is under-exploited and quite another to manage and leverage it eff ectively.
70
“We defi nitely support patent assertion as part of any sophisticated IP strategy. Our clients are investing in demonstrating the strength of their patents. T ey are spending hundreds of thousands of dollars to prove that their patents are valid and that they are in fact being infringed before pursuing a claim. To me that’s valid and strategic behaviour. It goes to show the value of the patents and is an eff ective way for companies to benefi t from their R&D and patent investment,” says McLean.
Asserting patents is a three-part game. “It requires demonstrating that you have a valid asset; that it is infringed; and that the infringement impacts a signifi cant revenue stream. If you can prove and articulate conclusively these three points then you can drive up the value of a transaction.”
It is important to bear in mind that what may work for one company may be the wrong strategy for another, depending on the profi le of the company concerned. “We deal with companies across the spectrum, from start-ups through to billion dollar multinationals,” McLean says. “It really depends on the organisation’s strategic objectives. We talk about IP in terms of a lifecycle, from investigating the space you play in and understanding the patent landscape to using the information to build a coherent patent strategy and then determining next steps of defending or monetising this asset.”
Large multinationals may have thousands of patents, while start-ups may have only a few. Regardless, it is important to work with each
World Intellectual Property Review September/October 2013
Mike McLean leads a team of IP professionals who work with organisations in the electronics industry to systematically develop, manage, and utilise their IP assets. Since joining the company in 1996, he has played a key role in expanding the IP services from the base of infringement
investigations to
reverse-engineering and portfolio
management, patent sales and acquisitions, and patent strategy. McLean has also worked extensively
with the technology practices
of major law fi rms, the in-house corporate counsel teams of key technology companies and external licensing agencies.
www.worldipreview.com
company to build the portfolio it needs to execute its strategy.
“With small companies we might be helping them to fi le just one patent to give them the most coverage and position them up for their future growth. For them, a patent may be fi led as a foundational piece to be built upon going forward as the business grows or as they get access to more fi nancing.”
T ere is one other key point that companies should consider when looking to maximise their patent value, McLean points out. Many companies will have separate departments for licensing, technology development, litigation and so on, but they rarely talk to each other. “In order to build stronger performance out of the patent programme it is essential to increase the communication between these teams.” Some organisations have set up a separate group to act as intermediaries but this is the role that an experienced IP consulting team can also play.
In a world where IP is becoming ever more important, companies that invest in putting the right patent management process in place will have a clear strategic advantage over those who don’t.
Mike McLean is senior vice president of professional services at TechInsights. He can be contacted at:
mmclean@techinsights.com
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