IP Cost Management  

POSTED BY Jed Cahill AT 8:55 A.M. MARCH 31, 2009

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As the economic downturn forces companies to tighten their collective belts, one strategy they cannot afford to abandon is strategic management of intellectual property (IP) through patents - one of the most powerful methods of protecting competitive advantages. However, the costs associated with filing and maintaining patents are significant. Conducting prior art searches, drafting high-quality patent applications, incurring filing fees, and responding to patent office actions can easily surpass $20,000 in expenses, plus thousands more for the ongoing maintenance fees to keep a patent active. Of course, patent-related expenses further multiply when patents are filed globally.

To make matters worse, many companies consider only a few criteria, such as an invention's potential patentability and overall product importance, when making costly patent filing decisions. This uninformed approach can lead to very high costs and too often, a low return on IP investment. Most companies also miss opportunities to cut costs by abandoning existing patents and pulling the plug on in-process applications that no longer support the business goals.

Rethink initial patenting decisions: Base initial patenting decisions on strategic criteria that align with overall business goals and intended uses of the IP. It is not enough to simply ask if an invention supports a key product or technology. Companies should also consider:

Investigate other methods of IP protection: Inventions that are not deemed strategic to patent can be protected effectively, and often more appropriately, through other low-cost means, such as enabled publications and trade secrets.

Reassess patents and in-process applications systematically: Patents and applications that no longer support the business can be abandoned to cease legal fees for patent prosecution and maintenance fees for issued patents. Companies can map their portfolio to their respective business strategies, products, and technologies to inform abandonment decisions and use sophisticated software tools to analyze various patent strength metrics.

We have observed several companies who have successfully implemented these patent management strategies to control costs and maximize return on investment. One example is a diversified technology company that recently assessed its portfolio and conducted a strategic strength analysis of approximately 200 patent families. This company discovered that 15 percent were unused and could be safely abandoned, making room for the company to finance several new patent applications that are more strategic to the business.

To obtain more information or discuss your unique challenges in strategically managing costs on your IP portfolio, please contact us.

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