Patent Portfolio Management: Everything You Need to Know
Patent portfolio management is a process where a company can coordinate its patent strategy with its product strategy3 min read
What is Patent Portfolio Management?
Patent portfolio management is a process where a company can coordinate its patent strategy with its product strategy. A patent portfolio can be a significant part of a corporation’s overall value - both Nortel’s and Google’s recent purchases and sales of patents were transactions amounting to billions of dollars being exchanged. The value of a patent portfolio should be measured as a whole to see the true value of a company’s patents.
Above all else, timing is the key to patent portfolio management.
Sound Portfolio Management
Developing a successful patent portfolio is an ongoing process. Once patent assets begin to reach a positive trend, it becomes just as important to manage the portfolio. If not managed properly, the portfolio will not only stop generating revenue, it can drain a company’s profits.
Track Your Client's Competitors
Patent portfolio managers will monitor other companies' moves in the patent arena in order to:
- Maintain a competitive edge
- Identify cross-licensing opportunities
- Protect their clients against potential litigation.
When dealing with companies that prefer to use their intellectual property as a sword, keeping tabs on the competition is crucial.
Patent portfolio management comprises attaining patents in different areas. This is known as diversification. As with the structure of a company’s financial assets, holding diversified patents are a way to minimize risk, as they will react contrarily to similar world events, helping the company to keep its investments balanced.
If the values of the patents don’t move down and up together, then the portfolio is more risk-averse than a portfolio that gains or loses value based on one trend or event, such as changing consumer demand. Diversification won’t guarantee against loss, but it’s a way to lessen long-term risk.
In order to maintain a successful patent portfolio, it needs to be reviewed and rebalanced on a regular basis. Then, the portfolio needs to be modified based on a company’s lifespan of a particular patents and current needs.
In reviewing and rebalancing, a company should spread its patents across different industries or categories. This will provide the opportunity to identify its strong positions, where they are leading the market, as well areas where they are less competitive.
Target portfolio growth by recognizing areas where a company can achieve category leadership. They should then develop a strategy to support the growth of those patents, and cut back in other areas.
The Traditional Paradigms
When companies want to execute patent monetization, patent sales and licensing come to the forefront. Selling patents is hands down the least risky and least expensive monetization approach.
Another attractive paradigm for patent holders to access non-dilutive capital is that of royalty monetization.
Mapping Your Portfolio
The best way to map your patent portfolio is to create a spreadsheet. While initially mapping your portfolio can be quite laborious to produce, once in place it is easy to keep up-to-date.
To initiate a portfolio review, an attorney should make recommendations on cases for discussion with key decision makers. Following a meeting with decision makers, the decisions are then shared with a wider audience to get endorsement.
It’s important to find someone or a small group of people able to make decisions to review the portfolio with you. Those with greater knowledge of the patent portfolio need to judge if the recommendations are well informed.
Many larger companies will review by individual areas, such as technology, or the development stage.
Patents are not static rights; they need regular review and maintenance to maximize their value to a company. Retain a patent portfolio that is in line with their commercial aims.
A patent portfolio audit analyses the rights in your current portfolio, examining the strength of those rights and their usefulness to your business. Without regular audits of an active patent portfolio it can be easy to lose sight of the rights and innovation and technology that it contains.
Every company with a solid business objective needs a patent portfolio management strategy as part of its plan. Once the portfolio has been established, a periodic review and rebalancing of its contents will help a company maintain a successful portfolio.
If you need more information on patent portfolio management, you can post your legal needs on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site, who come from law schools such as Harvard and Yale.