IP life cycle management: A primer on IP Portfolio Management
The following article is brought to you by the IP Portfolio experts of BananaIP (BIP)Counsels, India’s leading new age IP firm. This post will help you understand the meaning of intellectual property portfolio management, the value that it brings to businesses and the strategies to be adopted for effective IP Portfolio management.
The value that Intellectual Property brings to business is well established. The steady growth of Intellectual Property filings and the increase in IP centric business transactions over the past decade is a sign that its vitality for survival in market place has been recognized and embraced. However, blinded by its glamour and glory we often do not realize the effort that needs to be put in towards its management and control, in order to be able to extract the maximum value out of it during its life span and sometimes even beyond.
In an effort to bring forth the nuances of IP life cycle management and its undeniable worth in maximizing commercial value to businesses we intend to publish a series of blog posts highlighting the process, importance, challenges and good practices involved and recommended in IP life cycle management. Through this post we intend to address and establish the need for companies to adopt robust intellectual property (IP) life cycle management practices.
Work with respect to an intellectual property does not cease once an application has been filed; it is simply the beginning. From its conception to expiration, an IP asset undergoes a lot of procedural, legal and market driven changes, which more often than not has an impact on the business and its valuation. To be sensitive to such changes and to use such information to gain a competitive edge in the market space, IP files need to be continuously tracked, maintained and analyzed throughout their life cycle. For an entity with multiple IP in their possession, this task can be often critically laborious, time consuming and expensive. For optimum utilization of an IP, various factors such as its maintenance costs, asset value, and other incremental costs associated with it are to be considered. Creating a repository of all information pertaining to the IP in control of a business goes a long way in extracting value from the assets and enabling prioritizing the assets and taking strategically sound business decisions.
To achieve the said purpose, an IP Portfolio i.e. an amalgamation of all the relevant data pertaining to every IP filed and owned by a company has to be prepared, updated, tracked and maintained in order to secure the interests of the organization.
The management of intellectual property is all about managing innovation with the procedures and processes that are required to turn that innovation into valuable patent rights. A successful IP life cycle management system aims at organizing and structuring data to obtain correct valuation along with conscious evaluation of every IP owned by a company or a person.
We live in a world of mergers, acquisitions and divestitures. Businesses swear by these ideas and therefore it can be a daunting task to truly understand an enterprises intellectual property portfolio and the need to manage it. It is quite important to note that business and IP strategies must be aligned to maximize the value of one’s intellectual property assets. Managing an enterprise’s IP assets is more than just acquiring the formal IP rights through the national IP office. Patents, trademarks or copyrights are not worth much unless they are adequately exploited.
As a company with expertise in portfolio management, we often come across certain questions from IP owners such as, what is the extent to which outsourcing IP life cycle management to a third party assist in developing an effective IP strategy and what abilities or skills do IP life cycle managers bring to the table that help organizations place a value on their IP assets?
While such questions seem overly complicated, they can often be addressed very simply. Let us take up the first part of the question, “to what extent does outsourcing IP life cycle management to a third party assist in developing an effective IP strategy”. Outsourcing IP life cycle management to a third party is a purely business driven strategy albeit a good one. Professional IP management service firms are generally required to have good commercial awareness as they are required to provide sound business advice as well as ensure the management of all critical IP’s of the firm. This inherent need within the IP life cycle management service firm ensures the best results for a client in terms of management of IP.
In order to address the second part of the question as to what techniques do IP managers bring to the table that help organizations place a value on their IP assets, we need to understand the golden rules that every IP manager is bound by. The duty of an IP manager ranges from strengthening the decision-making process of the firm to verifying the integrity of the IP Portfolio. The key skills that make for a good IP life cycle management firm are as follows:
- Strengthening the IP driven decision-making process of the firm or enterprise.
- Protecting intellectual property by ensuring timely payments
- Improving accuracy of IP life cycle maintenance
- Saving time and increasing productivity with automated processes
- Verifying the integrity of IP data and
- Assisting with budget forecasting with respect to IP.
Based on the aforesaid, it would not be wrong to conclude that technology development and IP management need to be intertwined to ensure commercial success and company viability. As William Barrett in his article ‘Building a strategy for maximizing intellectual property value’ beautifully puts it, “An IP strategy arises out of and supports the business strategy. It typically includes an IP vision and specific objectives that define how the company will invest its time and resources in an IP portfolio that will, along with the business and product strategies, help to support a sustainable competitive advantage. The IP strategy tells inventors where to innovate, the legal team how to evaluate that innovation, and a CEO where and how to invest in protecting it.”
Authored by the IP Portfolio division at BananaIP (BIP) Counsels.
Building a strategy for maximizing intellectual property value, William A Barrett, 25thJanuary 2005, bioentrepreneur, http://www.nature.com/bioent/2005/050101/full/bioent842.html, last accessed on 18th February 2017.