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Patent Pruning: IP Portfolio Management

Patent Pruning: IP Portfolio Management

 

IP valuation best practicesThe value of a business includes both its ability to perform and the combined value of the assets it holds. Distinguishing profit-driving assets from cost-drivers and working to balance the scale increases the overall value of the business. Thorough IP valuation and IP management practices continuously align intellectual property portfolios with business objectives.

Intellectual property (“IP”) is a significant set of assets including patents, trademarks, copyrights, and trade secrets, among others. For many businesses, applying for and maintaining patents are some of the largest IP-related costs. In evaluating a patent portfolio, each of the individual patents must be independently evaluated for relevance to the current core offerings of the business and overall strength. Bloated IP portfolios can be costly to maintain. The maintenance and attorney fees associated with sustaining the rights to unused or under-utilized technologies is a constant reality and the result can be a decrease in the amount of resources available for new patent acquisition or research and development of new technologies.

A comprehensive IP valuation can help the business to make informed decisions regarding which IP assets to shed and which technology areas to strengthen. For instance, perhaps there are patents in the portfolio that, while not necessarily applicable to the current business objectives, may be of value to other businesses. A decision to sell IP that falls into this category may help offset the costs associated with maintaining an IP portfolio and can help establish a leaner, more focused IP model for your company.

Pruning is the practice of trimming a plant’s diseased and damaged branches or buds in order to promote the growth of the healthy leaves and flowers. Analyzing your IP portfolio to determine key value drivers and identify those items that may fall outside the goals of the business increases the potential value of the business and can free resources.

Pruning can be a dangerous task—no one wants to excise the wrong asset. Often it takes multi-industry experts to see the potential value of a patent in a completely different area than the current business. Expert consultation is highly recommended before abandoning patents or letting any or IP expire. However, like horticulture, IP valuation processes performed by skilled experts can help identify and eliminate inefficiency that will hopefully generate solid new business growth.

Practices that identify and prune under-utilized and unused patents from your IP portfolio are but a small piece of IP management. Working with industry and technological experts is incredibly valuable in creating and maintaining a plan for your IP. Understanding the value of the individual components that comprise the whole can aid in determining which items should be maintained and which should be under consideration to be cut.

Ready to learn more about IP valuation and how to apply solid IP management practices to your portfolio? Contact the patent portfolio experts at TechPats today.








 


Patent Mining: 3.5 Pitfalls To Avoid When Uncovering Hidden Gems

Patent Mining: 3.5 Pitfalls To Avoid When Uncovering Hidden Gems

 

When it comes to successful IP portfolio management, “patent mining” is one of those terms that suggests the promise of striking it rich from unearthed intellectual property.

However, the truth is that patent mining is no quick fix. The trick to patent mining is avoiding the pitfalls – a process requiring a lot of strategy and investment of resources to truly reap the potential (and possibly considerable) financial benefits.

Here’s how:

1. Don’t Let Your Patent Portfolio Grow Out Of Control

Knowing what you have in your patent portfolio is significant to uncovering the gems. Statistically, the majority of patents in your portfolio are not providing economic value, and are actually costing you money in maintenance and attorney fees.

Patent pruning allows you to identify and eliminate any unproductive intellectual property you own, and strategically align your patent portfolio to meet your core business objectives. Keep in mind: The process of patent pruning must be done very carefully.

To start, consider how each patent supports, defends or advances your market position. Assets not in practice, outdated technologies or any assets with existing litigation are all ready to be evaluated for possible pruning from your patent portfolio.

2. Avoid Using Automated Systems For Patent Mining

Often, automated systems are used for patent mining … a process that all too many outsourced patent reviewers implement. Automated systems are a pitfall of patent mining for the following three reasons:

• Glossing over potentially viable patents
• Not always locating core assets
• Inaccurately evaluating technology across multiple industries

For effective mining, you need a patent mining service that reviews your patent portfolio personally. It should also manually review thousands of patents and conduct extensive IP valuation to select the best assets that serve your company’s core objectives.

3. Beware Of Traveling Down The Patent Mining Rabbit Hole

Without the right strategy and background experience in patent mining, you could end up wasting hours upon hours of company resources sifting through patents, trying to find value.

Your team of engineers may not have the experience evaluating assets from a patent monetization perspective. They may not understand the current markets and how certain technologies in your patent portfolio may be applicable.

To avoid falling down the patent mining rabbit hole, you need to know exactly where technology is headed across a wide range of industries, and how any given patent in your portfolio applies to technology 10 years into the future.

3.5. Never Assume Your Patent Portfolio Is Full Of Gems

In a portfolio of 100 patents, a low percentage of those patents are often true gems. Simply put: Knowing when to stop investing time and resources into forcing value out of bad assets is important to successful patent mining.

As a strategic business practice, patent mining necessitates a serious commitment to active scanning and analysis of all patents that directly affect your company’s goals.

To tie technology development to your business strategy, partner with a strong patent firm that has decades of experience, meaning they are devoted to iteratively mining your portfolio.

The resources spent on efficiently and effectively conducting patent mining save you from wasting time and money on unproductive patents in your portfolio.

Ready to learn more about patent mining and making the most of your IP portfolio management? Contact the patent mining service experts at TechPats today.


Top 5 Proven IP Valuation Insights And Best Practices

Top 5 Proven IP Valuation Insights And Best Practices

IP valuation best practicesTo make the most of your key technologies and the opportunities in front of your organization, accurate and effective IP valuation is vital.

However, IP valuation is a complex process due to the interminable variation of underlying technologies, legal issues, business issues and the context in which they are conducted.

To ensure your intellectual property serves your business strategy, you must avoid churning out patents without a plan. The following five points are proven best practices when it comes to patent valuation.

1. Conduct Patent Portfolio Mining

Over the years, your IP portfolio may become overstuffed with valuable patents, and it is important to mine them for improved company revenue. Companies that neglect their IP portfolio are wasting money. Which patents are no longer relevant to your business strategy?

To discover which patents in your portfolio are relevant and which are not, have an IP valuation expert conduct patent portfolio mining. Having your patents mined helps you to see where and how your patents apply to industries and technologies. Patent portfolio mining clears up the clutter of your IP portfolio and may also help you find potential buyers for your unused patents.

2. Partner With Patent Portfolio Management Experts

Bringing on an IP consulting firm, one that fully comprehends the industry and the technology that they are valuating, is important for your organization. These experts are made up of engineers and analysts with years of industry experience.

With their high level of experience, an IP consulting firm helps you identify, evaluate, capture and protect valuable IP assets. Their invaluable knowledge of IP valuation is what helps you create a robust and effective IP strategy.

3. Perform Comprehensive Market Analyses

Another effective way to conduct IP valuation is to have your IP consulting firm perform comprehensive market analysis to determine where your technology stacks up amongst your competitors.

Market analysis is a methodology that involves determining what a buyer is willing to pay for similar intellectual property. This comes by ascertaining if there’s an active market for the patent, or a similar one, and also if there have been past transactions of comparable property.

4. Determine Your Patents’ Life Cycle

Most investors aren’t going to be interested in a patent that has limited years of relevance or patent protection left. On the other hand, with a recently issued patent, the technology has not properly matures and there is no potential to litigate at that time.

That is why it is important to understand where your technology exists in its life cycle. Generally speaking, it is better to acquire a patent after it has been proven useful in the marketplace.

5. Take Timing Into Consideration

Technology changes rapidly, which affects the value of your patents. The values of your patents are going to fluctuate, depending on how old they are and how relevant they are.

You may need to sit on your patent for several years, even a decade, and wait for technology to catch up. Conversely, waiting too long means you may have a hard time attracting demand. Your IP consulting firm helps you navigate the ever-changing tide of technology.

IP valuation requires in-depth knowledge of relevant technologies, market conditions and patent law. Along with this understanding is the ability to bring many facts and considerations together to build an argument for why a patent has value. Patent valuation is not only a function of revenue, but also a matter of timing and the other strategic benefits it may yield.

Ready to learn more about proven best practices for mining patent gold? Contact the IP valuation experts at TechPats today.


5 Patent Monetization Mistakes That Could Cost You A Fortune

5 Patent Monetization Mistakes That Could Cost You A Fortune

Patent monetization has emerged as a promising way for many businesses to generate a significant amount of revenue. However, there is no single, guaranteed strategy, and determining exactly which path to take when attempting to monetize any one given patent is never clear-cut.

When it comes to patent valuation and efforts to monetize your intellectual property, there are plenty of possible mistakes to make along the way. If you want to get the most value for your patent, try to avoid the following five mistakes.

  1. Not performing an IP valuation, or not acting on it at all.
    If you do not know what your patent is worth, how are you going to monetize it appropriately?

    The IP valuation process requires an in-depth understanding of the market, industry that directly affects the value of your patent – as well as related industries. One of the first steps in patent valuation is assessing the necessity of the patent’s underlying invention to products and services in the market. For instance, is the claimed features core to your industry and widely used to generate revenue? Or, is the subject matter of your patent a minor function that is easily designed around to solve the same market demand?

    Is your patent a transformative invention or an incremental invention?

    In any case, to assess your patent’s worth, you want to also examine the state of the art at the time of invention, if possible. This means determining how your patent may be different from or innovative over other similar, contemporary patents.

  2. Not having the right patent monetization strategy.
    Once you have conducted a patent valuation and understand the strength of your patent, the next step is to extract the value and get that patent generating revenue.

    Patent monetization generally happens in one of three ways:

    • Patent licensing: In return for a negotiated royalty, patent owners allow a potential infringer to develop, manufacture and/or market the claimed invention.
    • Patent litigation: When patent owners cannot strike a royalty deal, or want to enforce their right to exclude a competitor from infringing behavior, owners may bring a patent infringement lawsuit and ask the court for monetary damages.
    • Patent acquisitions: Sometimes patent owners find a suitable buyer who offers the right price, at the right time and in the right situation. A potential partner may want to share the risk of licensing and litigation, or a buyer may even offer you a license to continue using the invention.

    These options are far more intricate and complex than they first appear on their faces and are often part of the same strategy.

    For instance, licensing negotiations could break down and a lawsuit may be initiated to bring the parties back to the table, or a multi-year lawsuit could end in settlement of a non-exclusive license and a hefty annual royalty.

    When making goals, you must remember that all strategies require at least some investment and a fair amount of patience.

    Do you want to try to recover your investment via licensing your patent, attempt to secure a competitive advantage by excluding a competitor or begin to build recognition as an innovative leader by developing a larger portfolio? The end goal for your patent monetization effort helps determine your strategy, but a solid patent monetization strategy should be able to adapt.

  3. Not thoroughly analyzing the market and industry.
    Patents are often very complex, and IP valuation is an extremely detailed process that requires the input of both lawyers and expert advisers with specific technical knowledge.

    Market-based patent analysis takes into consideration similar market transactions of comparable patents. This process may also evaluate utility and technological specificity, along with the market perception of the patent.

    Look at your potential competitors and determine if your technology is being applied. Also, consider other industries where your patent may have crossover appeal. You do not want to leave any stone unturned!

  4. Not choosing the right targets for patent monetization.
    It is not uncommon for businesses to have difficulty identifying companies to approach about monetizing their patents. Depending on the technology of your patent, there could be hundreds or thousands of companies to consider. Identifying the right companies for patent monetization is complex and time-consuming.

    Some patent monetization strategies start with citation analysis to discover what companies own patents and patent applications that cite your patent. This may not always be good for your specific monetization needs. The theory behind citation analysis is that a more-highly cited patent would cover technology that is core to the market. Citation analysis could potentially yield a list of companies who own patents that cite your patent and may be supplemented with corresponding products and services that infringe your patent.

    However, reliance on citation analysis may also be misleading because the citations refer to a patent’s specification and not necessarily the claimed subject matter. Patents can be cited for a number of reasons during the application process and there are no simple ways to determine which features were referenced or which owners are practicing any or all of the cited features. Unfortunately, citation analysis is not capable of producing “magic lists” that identify and rank potential targets, without human intervention.

    Therefore, choosing the right targets to approach for licensing discussions or potential lawsuits should be based on an intimate understanding of the subject matter claimed in your patent. Because claims are the only enforceable part of the patent, choosing potential targets for a patent monetization strategy can only prosper with claims-based analysis combined with expertise in the industry and in-depth knowledge of the market. It is wise to use caution when considering any lists of targets produced by software alone.

  5. Not having an experienced IP consulting firm to package all of this together.
    Patent monetization is a complicated landscape to navigate on your own. For instance, IP valuation, revenue strategies, patent litigation support, and buyer identification are all practiced in an intricate world of patent codes, laws and worldwide databases. Not to mention, the various technologies can be difficult to grasp, sometimes, as well.

    Partnering with an experienced IP consulting firm with on-hand experts is vitally important for getting the right advice on how to effectively maneuver all of your patent monetization efforts.

Conducting a successful patent monetization process requires the proper knowledge and experience in the area of your intellectual property. Without deep-detailed information about the companies and patents being offered on the market, you have no framework for moving forward in a strategic and meaningful way.

Making critical mistakes in how you go about patent monetization could end up costing your business a lot of time and money.

Ready to learn more how to enhance your patent monetization efforts and jumpstart significant revenue generation for your business? Contact the Patent Miners at TechPats today.