Experts from some of the world’s leading patent practices run through the key stages of building a robust – and profitable – portfolio
In IAM’s annual Global Leaders supplement, 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 industry trends.
One issue many of them were keen to discuss for this year’s edition was the main challenges that their clients face when it comes to portfolio management – and, crucially, how to overcome them. We have distilled their thoughts into the seven stages of the portfolio lifecycle - from filing to monetisation.
Step 1 – identify core business needs
The first challenge is to determine whether the IP strategy meets the client’s business strategy. This is especially challenging in the current climate, with covid-19 affecting so much of the work and lives of people around the world. When there is uncertainty in the economy, the IP policy of a company needs to change accordingly. For example, how do you balance portfolio management with a limited budget to maintain IP assets? It takes effort to identify the priorities and sometimes an incorrect decision may cause valuable assets to be abandoned in the long run.
The second challenge is to decide whether the portfolio can add value to the business. New technologies develop and upgrade very quickly. Companies face challenges on how to assign resources in managing portfolios to add value to the business.
Lili Wu, partner at Han Kun Law Offices
Step 2 – pick the best people for the job
It is vital for a patent portfolio to be integrated into the bigger picture of a company’s commercial and strategic goals. Short and long-term decisions about patents should not be made in isolation. Our team engages in ongoing conversations with our clients about their unique business objectives so that we can provide adaptive, creative counsel and secure strong, defensible patent applications.
It is also critical to have the right team in place – for example, new skill sets are needed to develop and use our next-generation technology tools. Individual team members often work on discrete parts of an application, utilising their specialist technical or legal skills. Our ability to deploy the right people for different aspects of a project helps us to create strong patents that support our client’s broader commercial strategies.
Michael L Drapkin, partner at Holland & Hart LLP
Step 3 – file foundational patents
I always tell start-ups that they should file as many foundational patents as they can because you have to ‘use it or lose it’ when it comes to the right to file a patent. Despite all the limitations on patent use for a start-up, early patents in key technologies are often worth large multiples of what the patents cost to obtain should the company be sold or liquidated. I think now more than ever, with overseas competition becoming stronger and stronger, having a solid IP position is far superior to the perceived benefits of thumbing your nose at proprietary rights.
Steve Lundberg, principal and chief innovation officer at Schwegman Lundberg & Woessner PA
Step 4 – save money by filing technically rich provisional applications as early as possible
Most start-ups face the dilemma of doing some of their most innovative inventing and developing 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.
Andre Marais, principal at Schwegman Lundberg & Woessner PA
Step 5 – track regulatory environments
A successful patent strategy is one that is tailored to protect 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
Step 6 – keep filing levels up
Well-prepared filings need to be made at the onset. What is more, in almost every case a single application or patent will not suffice to monetise. Keeping filing levels up during time to market is also key to building a reliable portfolio. Having that in hand and being persistent in licensing talks is especially important.
I think that Germany is a good venue for start-ups to put pressure on unwilling licensees by litigating their patents. Litigation costs are comparatively low and predictable. These companies cannot afford to spend all their funds on legal issues.
Philipe Walter, partner at COHAUSZ & FLORACK
Step 7 – conduct international searches for competitor overlap
Our advice is typically informed by answers to a series of questions. What is the monetisation goal? For example, are you looking for a partner overseas, a licence for your intellectual property or a complete sale of your intellectual property and perhaps your business?
The monetisation process usually starts with an international patent search and a product search. Once we have identified competitors with overlapping or related IP rights, or products that read on our patent(s), we might immediately move forward with a strategy to approach one or more companies. However, searching also often identifies gaps in the scope of clients’ patents and we usually spend considerable time refining the patent scope to improve the value of the asset(s) before any monetisation advances are made.
Natalie Raffoul, managing partner at Brion Raffoul LLP