It’s that time of the year. You know, the one where we promise ourselves we will go to the gym, eat healthier meals, etc., etc.
So, I’m here to help you check off one important resolution for your business this year; execute an IP strategy. It’s not as tiring as going to the gym, and will make your company healthier.
A quick story…
I was at a holiday networking event last week and the CEO of a startup company asked me about a large impending charge from her outside counsel. She had no idea what it was for, but it had something to do with a patent application they had filed.
It turns out it was a related to foreign filing costs for an application entering national phase, but she didn’t understand. And no one else at the company did, either. And, to make things worse, the company had completely skipped the national phase filing on an earlier application and is potentially going to lose all protection for that subject matter.
How could that happen?
It’s too easy to blame outside counsel for it. But as everyone knows, outside counsel takes great pride and goes to great lengths to inform clients and get their instructions. I know their outside firm, and they certainly did not drop the ball. The truth is the company had no IP plans, procedures, or strategy. So, the advice of outside counsel essentially fell on deaf ears.
Prevent this from happening to you.
Have a plan
Many companies take a throw-it-over-the-wall approach to getting their patent applications filed and prosecuted. An exciting new finding comes out of research, and you decide to file an application. More findings… more applications… The cycle is clear, but each application tends to be independent, disconnected, and not necessarily focused on the ultimate product of the company. In the end, you have many patents but inadequate product protection. Break this cycle; work from your product requirements document to plan the necessary patent coverage that will ensure exclusivity for your product.
Execute the plan
Once you have a plan in place, you need to execute it. You also need to revisit it frequently because modifications, changes, and delays come up in R&D or product development. This leads to the next question, “Who is in charge of IP in your company?”
Decide who is in charge of IP and empower them
Is IP an internal function or is it outsourced? If it is internal, what other, more pressing responsibilities does that that person have? And, does the individual have a solid background in IP? If it is outsourced, how are you managing it?
You need someone in house to manage the outsourced activities, especially when using outside counsel. And, while it may seem as if hiring a consultant to assist with in-house matters will put a strain on your budget, it can actually decrease your overall costs by having focused expertise available to you.
Pay attention to your IP
Put IP on the project team meeting agendas. Identify and address potential issues as they arise so corrective action can be taken before it’s too late. Review your portfolio on a regular basis. You will actually save money by abandoning patents and applications that no longer apply to the product or technology you are developing. If you think the IP may have value to someone else, consider licensing it or selling it outright.
Understand the real value of your IP
IP valuation is a complicated area. There are various complex mathematical and computer models that purport to assign scores to patents based on an analysis of the claims. This is not the valuation process I am referring to here, because for the most part, as a startup, you probably have more pending applications than issued patents, and it is likely that you will derive little added information from a complex model.
For you, understanding the value of your IP consists of knowing the strengths and weaknesses of each application and understanding the opportunities and threats presented by your competitors’ IP. Using that information, you can begin to craft a viable strategy to maximize your IP protection and value.
Know your competitors’ IP
You can’t compete today without tracking the activities of your competitors. It’s the only way to know that you are really out in front. So, while you naturally read all of their scientific literature, are you also tracking their IP activities? There is a lot of competitive intelligence to be gained by monitoring patent and trademark applications.
Prepare for diligence – That’s where the money is
Finally, if you are a startup or midsize company, you may be looking for partnering or buyout opportunities. When they come up, the timeline is quite fast. You can facilitate the deal by getting your IP in order ahead of time. A potential partner will be impressed that you have handled your IP so carefully. If you have IP issues, preparing a risk management plan in advance certainly helps smooth the pathway to closing the deal. Remember, the other party will dig up the risks, so it is to your advantage to be ready and upfront about how to deal with them.
You don’t have to end up scratching your head over your IP strategy and expenditures
Careful planning and expert assistance from others will get you a solid IP strategy that you can execute with confidence.
In future articles, I will give you more detail around each of the above topics. In the meantime, contact me for assistance, and check off one easy New Year’s Resolution.