The digital transformation of IP management still has a long way to go
Digitisation is rapidly changing how businesses operate and technological advancement is disrupting the way in-house legal and IP teams function. We analysed 53 different software solutions in the market to see how the technology landscape has changed in the last 25 years. We found that most software solutions support automation of tasks for the IP team more efficiently, such as filing and docketing, rather than empowering them to make new, informed data-driven decisions.
Most tools still focus on managing the IP portfolio by either reducing or fully removing human intervention in basic workflows. In the last decade, however, there has been a slight shift towards software tools that support data-driven decision making through enhanced data inference and trend prediction.
IP Value Hierarchy and the impact of digitisation on the IP function
The digital IP solutions/tools analysed provide support at different levels of decision making in the IP Value Hierarchy identified by Davis and Harrison. As each of the levels in the hierarchy is a stepping-stone to the next level - and decision making at the higher levels is based on the foundation of lower ones - we re-categorised the IP Value Hierarchy broadly into three main levels of decision making: IP Administration, IP Inference and IP Prediction.
In terms of technological advancement, we found that most (77%) software solutions focused on IP Administrative tasks, including automation of various levels, concerning processes such as IP filing and docketing work, conducting IP searches, and online infringement detection. In addition to reducing IP management workloads and maintaining team efficiency, these solutions may help IP teams understand the company’s position in relation to competitors or identify potential infringement. Trademark Now, for instance, supports IP Administrative work.
Following this, a further 15% were identified as IP solutions on the IP Inference level. These facilitate information sharing and support data driven interpretations enabling in-house counsel to create, monetise and utilise their portfolios through data-driven insights, and support IP integration into innovation and business strategies. Patsnap, for example, uses software to analyse data points from a company’s IP portfolio and provides insights into potential risks and areas for a business to grow.
Lastly, businesses at the highest level focus on defining the future of their industry by envisioning trends in products, customer preferences and technologies. Disruptive technologies at the IP Prediction level enhance the quality of innovation by capturing changes and uncovering trends across industries, technologies and markets to create new inventions.
Such tools operate on a reinforcement learning model where machine learning happens via interactions and feedback mechanisms, leading to intuitive decision making. However, only 8% of the solutions reviewed were considered disruptive technologies at this level. For example, Iprova uses ML and NLP based technologies support businesses to capture changes across industries, technologies and markets as soon as they occur, and uses them to create disruptive inventions that result in new products and services.
Jumping on the technology bandwagon
Overall, technological disruption should be utilised to generate value for an in-house IP team and the business in general. Automation tools targeting basic IP tasks should allow IP teams to shift their efforts from administrative tasks towards more complex decision making by leveraging intellectual assets for competitive advantage and enabling efficient use of time, resources and human capital.
In our analysis of the technology market, we grouped solutions based on the value chain of the IP Value Hierarchy. We applied this knowledge to our understanding of the size of teams at these levels and expected to see them moving up the value chain, with fewer people focused on administrative tasks. However, this is not the case. Notwithstanding the investment in a plethora of automation tools, we do not see much evidence in terms of fundamental changes within IP teams. A disproportionate number of IP teams remain at the bottom of the pyramid.
This raises several inmportant issues:
- Is technology not making IP teams more efficient? Do IP teams still feel the need to resource both technology and people to do administrative work?
- Does strategic decision-making lie outside of the control of IP heads? Do they have no accountability and motivation to focus on high level decision making, leading to a strategic misalignment between business heads and the heads of IP?
- Limited understanding of the software solutions in the market, what they offer within the value chain and how they align with individual business goals.
What this means for the IP teams of the future
Solutions supporting automation of administrative tasks should substantially reduce the IP team count at the base level of the pyramid. This should enable an ambitious IP team to move up the pyramid and invest time, resources and human capital to support decision making, rather than solely managing administrative tasks. In fact, the future IP team should invest in technology that supports IP Utilisation and IP Ambition functions as well.
Companies that transform their IP practices with data-driven insights, deep legal and business expertise, domain knowledge, and integrated technology see a rise in ROI on IP assets, increased revenue opportunities, reduced costs and accelerated outcomes. At Philips, IP is put at the heart of overall corporate thinking. Being one of the world’s leading players in the IP market, Philips has a fully aligned IP strategy with the company strategy. Their Compounded Annual Growth Rate (CAGR) for the share price is 11% since 2012.
However, IP teams as currently staffed are not equipped to use this technology as they lack the capability and expertise to fully leverage emerging solutions. In addition, future in-house IP counsel will be required to have a greater understanding of business strategy. Data scientists, who can interpret data and draw inferences to take informed decisions for the business, will also be needed.
It is important to understand the different solutions in the market, what they offer and how they meet individual business needs. The end goal should be to enable legal professionals to make informed judgements through data insights, inference and experience with the help of these digital solutions.
Where to get started? We suggest three areas:
- Setting ambitions and goals - Developing IP ambitions in collaboration with the business is key to achieve the business’s objectives.
- Defining the structure of the IP team in terms of its people, systems and processes – Identifying what type of people and skillsets are needed at each level; the solutions that are needed to support the teams; and day to day process that allow teams to function.
- Understand the tech landscape - Identify what technology solutions IP teams should invest in that are best aligned with a company’s goals.