Patent Pruning: IP Portfolio Management
The 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.