How do you measure the success of an IP strategy?
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.
Which aspects of your work do you find most rewarding and why?
Being a curious technology geek, learning about new technologies is a part of the job that I – and many patent attorneys – relish. Patent law, particularly patent procurement, is typically coincident with the development of new technologies and the release of products, which is an exciting and positive aspect of a company’s existence. Being a part of that excitement and positivity is something that never grows old, and I am grateful to have found a corner of the legal profession that has such a positive atmosphere within which to work.
Beyond that, knowing that you have helped an inventor or a company to create an asset that is not only valuable but also provides some degree of recognition, lends purpose to one’s work.
What tips can you share for engaging – and ensuring buy-in from – key stakeholders in a business?
If the senior leadership of a company is not committed to an IP procurement strategy, it can be challenging to get support for traction for an IP programme. Again, it is essential to clearly articulate the ‘whys’ of an IP strategy – both current and future – and to ensure that management is on board and understands these reasons for identifying and protecting critical intellectual property.
Providing metrics and an overall snapshot of an IP portfolio to key stakeholders on an ongoing basis is vital to maintaining and building momentum. Regularly communicating the value that the IP portfolio delivers is also vital to ensuring continued engagement and management support.
Comparative metrics concerning competitors and other benchmark companies can be useful information to management. To this end, robust analytics that are both internally and externally focused can be helpful.
You are celebrated for bringing an ‘in the trenches’ perspective to portfolio strategy and growth. What has this involved and why is it so effective?
The high-tech, particularly Silicon Valley, environment provides many exciting opportunities to be involved with growing IP portfolios. Having been fortunate enough to work with several prominent tech companies early on, I have seen which IP strategies deliver value in the short and long term.
Working alongside technologists, taking a deep dive into the technology, and then being able to identify the most valuable intellectual property embodied there are what I consider to be ‘in the trenches’ work. Working alongside talented in-house legal counsel to leverage intellectual property to further the objectives of the company – whether in a business negotiation or defending against third-party IP threats – is also an incredible experience. You see many things when supporting the IP counsel of a Fortune 500 company that are useful when advising start-ups. The IP ecosystem in Silicon Valley provides opportunities to work with highly talented and sophisticated in-house IP attorneys, and I am grateful to have learned from these attorneys.
While academic knowledge and theory are important in IP law, there is no substitute for the education that you receive in practice and on the ground. Knowing how to provide practical advice and reduced risk, while maintaining primary corporate objectives, is only learned by doing.
What are the biggest IP challenges facing big tech companies in the United States?
We see increasing concern regarding international counterfeiting and copying of US-developed technology, particularly in countries where IP systems are still developing. On the positive side, as IP development is rapidly increasing in some countries, there is a strong incentive to strengthen their IP systems.
There is also some concern regarding the potential weakening of the US patent system. While some changes over the past 10 years have been positive, the pendulum may have swung too far in the other direction. Some technology areas are highly dependent on a robust patent system, whereas others may prefer a weaker system, so there is always tension.
Finally, we see many companies battling to marry their open source ambitions with their patent programmes. While these are not necessarily opposed or mutually exclusive, the interplay is complex and requires strong procedures. Some companies (eg, Red Hat and IBM) are following a sophisticated strategy to use their patent portfolio to discourage patent aggression in the open source community. Similarly, Tesla has effectively made its patent portfolio open source, provided that third parties act in good faith, which includes not using their patent portfolio against Tesla (or challenging any of Tesla’s patents). As such, even while Tesla’s patent portfolio is open source, it still provides a defensive shield against patent aggression by competitors.
You have worked with some of the most prominent Silicon Valley tech companies since their early days. How do you stay ahead of the curve in such a dynamic market?
There is an excellent ecosystem of brilliant technologists and IP attorneys in Silicon Valley. Rubbing shoulders with these inventors and attorneys forces our attorneys to be perpetual students. That said, our firm has a national presence, and we have seen some amazingly sophisticated technology and IP strategies emerge from all over the country.
Silicon Valley’s advantage is that it is geographically very compressed, and some of the world’s leading technology companies and universities are located within a relatively small geographic area. But the community can be transient, and you often find people passing through, either bringing great ideas from elsewhere or taking ideas that they have picked up in the area to other parts of the country or world.
What advice would you offer any US tech start-up looking to establish a strong patent portfolio?
Most start-ups face the dilemma of doing some of their most innovative inventing and developing at a time when they have the least cash and time resources to build a patent portfolio. If money were no object, my advice would be to file as many patent applications as possible – as soon as possible and with as technically rich patent specifications as you can create. But the reality is that financial constraints rarely permit this. Therefore, we typically work with start-ups to build a robust patent foundation (eg, through filing technically rich provisional patent applications). This enables them to reduce expenditure early on, while providing a treasure trove of technical descriptions that can be used to support multiple applications further down the road, when cash is more abundant. With the United States moving to a first-to-file system, there is effectively a race to the patent office (or to publish) and filing patent applications early can be crucial. One or two days can make the difference in a fast-moving, hot technology area.
We have also worked with start-ups to prepare and file patent applications ahead of actual product development using design documents that the inventors can prepare (eg, based on where they want to take the technology further along the product roadmap). These early applications often spawn some of the most valuable patents and patent applications. As they are early, these filings have not been delayed waiting for final implementation details of the technology to be perfected and iterated.
If a start-up has a deep toolbox of patent applications with rich technical descriptions on file early, it provides numerous options for patent strategies down the road and enables the start-up to react to diverse requirements and competitive challenges. An excellent example of this is Zynga, which filed some high-quality and detailed provisional patent applications on its early technology, at the urging of an early-stage investor. Those provisional applications spawned multiple key patents, and Zynga was regarded as having one of the most valuable IP portfolios for its size in the industry as a result of that foresight.
Subject-matter eligibility remains a murky subject in the United States. How likely are we to see legislative reform to Section 101 any time soon?
Subject-matter eligibility has introduced uncertainty and risk management challenges, but innovation remains strong. Strong innovation demands a strong patent system, and we are seeing a pullback from the perceived weakening of the system over the past few years. Patents are also being viewed as collaboration tools, rather than weapons, particularly as synergies between patents and open source are increasingly appreciated.
Several legislative proposals (eg, the STRONGER Patents Act 2019) aim to reduce the uncertainty regarding patentability. However, whether these initiatives will be enacted into law anytime soon remains doubtful. The country is dealing with several crises at the moment, and it will likely be a while before legislative attention returns to these issues.
As more and more industries are affected by technological convergence, what should US patent owners bear in mind when assessing their existing IP strategies?
Technological convergences will inevitably lead to some level of competition and potential clashes. When assessing technologies for patent protection, a company should consider the potential for that technology to be a convergence point for both known and unknown competitors. Particularly in areas where a company was an early innovator, keeping a patent family alive through a continuation filing strategy will provide the flexibility to respond to convergence from unexpected quarters and unexpected competitors.
Also, ensuring that multiple use case scenarios are mentioned in patent applications can be helpful for applications directed to convergence technologies. Without a crystal ball, it is difficult to predict what technologies will end up being convergence technologies. Therefore, patent counsel must keep abreast of the latest developments not only in their particular technology area, but also more broadly.
What emerging trends do you expect to see shaping the Silicon Valley patent landscape in the next 12 months?
The covid-19 pandemic has seen many technology companies grappling with the new realities of a remote workforce, as well as substantial downturns in specific sectors (eg, hospitality and transport). With significantly reduced demands for travel and in-person meetings, technologists within these companies have also had more margin to plan, design and invent. Based on this, on the patent prosecution side, we are anticipating an uptick in the number of patent filings in the next year, following the decline that we saw at the beginning of the pandemic. Patent litigation also seems to be returning to pre-covid-19 levels.
There has been an intense focus on technologies and solutions for addressing the challenges presented by the pandemic, especially on delivering medical solutions. We anticipate that life science and medical device technologies will be the focus of much investment, from which innovation and intellectual property will flow.
Technologies that enable remote working and collaboration, online shopping and supply chain and delivery infrastructure are naturally receiving a lot of attention in Silicon Valley and nationwide. We also expect to see a substantial increase in the number of patent filings in these areas.
Andre Marais is a registered patent attorney and principal at Schwegman Lundberg & Woessner. Having had the good fortune to work closely with several of Silicon Valley’s most prominent software companies since their early days, he brings an ‘in the trenches’ perspective to portfolio strategy and growth. His practice focuses on strategic IP counselling and patent prosecution, patent validity, infringement and clearance analysis and opinions, and IP due diligence work, particularly in networking, software, communications and electrical and electronic technologies.
Click here to see his IAM Patent 1000 2020 profile.
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