“Decisive, durable and defendable” - how to measure strategic IP success

IAM’s Global Leaders are the elite of the world’s private practice patent experts. Some of those who form part of the select group share their views on what strategic IP success looks like

This month, IAM will be publishing its annual Global Leaders supplement, in which many of the world’s foremost private practice patent experts reflect on their professional journeys to date and offer insights and guidance into career development, practice management and patent industry trends. 

Among the various topics covered, we asked our strategic elite what they consider to be the key requirements of a world-class IP strategy – and what metrics they use to measure this success. Here is what they had to say.

A successful strategy understands the wider context

In essence, a good strategy should provide a competitive advantage that is decisive, durable and defendable. The success of an IP strategy is measured by how effective it is in meeting the objectives of the business. I do not think there are any absolutes that can be used to define success as it is always contextual. Our approach is to consider intellectual property in its ability to create value, which may be more than its ability to generate future income. It usually comes back to an organisation’s purpose and how the intellectual property can be directed to support that purpose.

In considering the hallmarks of a successful IP strategy, it is vital that the intellectual property is underpinned with an understanding of the broader intangible assets of the business and the dependencies of those assets. This will unpack what the key value drivers are in the business. It also needs to be seen in the context of the market.

Finally, the IP strategy needs to be formulated with an understanding of the organisation’s ability to deliver on that strategy.

David Hughes, principal at Griffith Hack

This means cutting strategies to meet specific business requirements

A successful patent strategy is one that is tailored to a company’s business needs. One size does not fit all. Early-stage companies need protection that will be attractive to investors, whereas larger companies need enforceable patents that cover their clinical candidates in all relevant jurisdictions.

A good strategy for clinical candidates includes obtaining patents that track marketing authorisations and can obtain patent-term extensions where available. It should consider available regulatory authorisations and help to maximise available exclusivities.

Ultimately, a key indicator of a robust patent portfolio is whether it accomplishes the company’s underlying business goals: either attracting licensing/investment dollars or withstanding third-party challenges.

Anita Varma, partner at White & Case

Budgets, filings and risk management should all be clear and proportional

First, the budget should be proportionate to the company’s business plan, and management should have a good understanding of the desired results.

Second, there should be no surprise leaking of trade secrets and quick measures should be invoked to contain any negative impact if a leak happens.

Third, an organised plan should be in place to mine patentable innovations and decide when and where to file patents, with proportionate mapping to products in terms of commercial significance.

Fourth, there should be effective communication with the business unit to decide when to enforce the company’s rights.

Fifth, risk control should be proportionate to the company’s overall marketing plan.

David Huang, partner at Lexfield Law

Toolsets should grow with the business

Success should be measured by return on investment (ROI) and whether the articulated goals of the strategy are met.

When defining an IP strategy, it is always good practice to clearly define why intellectual property is being acquired. When the goal is licensing revenue (or some other revenue generation avenue), the ROI is easily measured. However, when the goal is conflict avoidance, cost reduction or strategic positioning, ROI can be more challenging to gauge.

A good patent portfolio can be compared to a fence around your intellectual property. As with a fence around your physical property, how do you assess the value of that fence? How many unwanted animals or intruders has it deterred?

There are any number of reasons, foreseen and unforeseen, that a company may wish to pursue an IP strategy. Having a deep IP toolset to rely on as those reasons emerge is critical. For example, early on in a company’s lifecycle, the focus of the IP strategy may be to create IP assets to support fundraising. As the company matures and so-called ‘fast followers’ surface, deterrence and cross-licensing may become the primary focus. A successful IP strategy builds an IP toolset that serves these different purposes as the company matures.

Andre Marias, principal at Schwegman Lundberg & Woessner PA

In-depth analysis paves the way to monetisation

Specific to patent monetisation strategies, we begin any engagement by conducting a deep analysis of the patents at issue, including claim coverage, infringement and market analysis. We also work with the client to understand their goals (both monetary and with respect to timing), risk profile and ability to invest time and resources into any monetisation strategy.

Using this information, we then develop detailed financial models for what a licensing campaign could be expected to provide, either with or without litigation. This detailed analysis gives the client a well-informed idea of the value that can be generated by their patents and provides critical information for developing a monetisation strategy.

We then revisit this analysis as we execute the strategy and update it as necessary with new information received during the monetisation process. This dynamic financial analysis is used to make informed strategic decisions when the time comes and the results of these decisions can be measured against the financial analysis to understand the strategy’s success.

Steven Steger, founder of Steger IP, LLC

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