INNPERSPECTIVE

A Series of Industry Focused Articles

Read about the latest trends and updates in the intellectual property industry from the Innography perspective.

IPAM + IP Analytics = A Whole Solution

Wednesday 23, September 2009 by Tyron Stading

More than two-thirds of a company’s asset value is represented by intellectual property. As a result, companies often invest a lot of human and financial resources in an IP Asset Management (IPAM) system or process. These systems range in complexity and sophistication from basic spreadsheets to expensive, enterprise-level patent software applications. But regardless of how sophisticated or basic the system, the effort to manage your IP Portfolio can be significant.

First, let’s consider the fact that an IPAM is essentially a document management system. Such systems are very good at helping people implement workflows and processes. Depending on how sophisticated the system is it can notify you of maintenance requirements, help you understand your existing IP investments broken down by classification and suggest who should do what next. An IPAM can be implemented as a very sophisticated workflow and reporting tool—but what it can’t do is provide analytic data about your portfolio in the context of other companies and markets.

Consider, for example, something as basic as how you make the decision of whether to maintain a patent that is up for renewal. A sophisticated IPAM can send you a renewal notification, but it can’t help you decide whether it’s a good idea to renew the patent.

For that reason many companies have a blanket business policy of maintaining all patents until they permanently expire—yet most companies have patents that are not asserted, are not commercialized and are not licensed. In other words, the probability is very high that not all of your intellectual property patents have significant business value, and yet they are often maintained to the tune of about $100,000 over their lifetime.

IPAMs provide data suggesting that a next step in a workflow process should be taken, but it can’t enable you to understand what the best next step should be. You need to understand the context of your internal data (what patents you have) to make sound decisions about your portfolio.

Your best bet is to have a solid IPAM system and integrate it with some kind of IP business analytics tool that can enable wise decision making. In the case of portfolio maintenance the integration of an IPAM system with a business analytics tool can be a tremendous advantage.

Once you know that a patent is up for renewal, there are a number of factors you need to consider before deciding whether to renew it. One consideration is the strength of the patent, computed from a combination of factors statistically associated with strong or more robust patents.

Innography compares those factors for each patent to all other patents and rates the patent strength accordingly. With an understanding of the patent strength, you can then make an informed decision about whether to maintain the patent. You also then have the option of selling it or licensing it — but the important point is that having the business analytics at your disposal functionally gives you those options.

Without those analytics most companies unnecessarily continue to invest in a weak patent. Conversely, depending on your IPAM, you might overlook valuable patents you should maintain and inadvertently let them expire. The key to effective portfolio management is to know what you can’t know if you rely strictly on an IPAM.

Integrating your IPAM with a tool like Innography enables you to bridge the gap between internal and external data. Armed with this information you can gain insight into typical IP activities like prosecution, maintenance and intellectual property litigation.

In the case of patent prosecution, your IPAM tracks the record of invention, whereas Innography tracks the probability of acceptance in the context of your business and competition. The insight you gain by using an integrated system is whether patent prosecution of a particular patent (or even a collection of them) is a worthwhile investment for your company to make. An understanding of changing markets and a sharp competitive analysis is critical to business success. In other words you must be able to answer the question “Am I investing in the right IP or should I be investing elsewhere?”

An integrated system can also assist you with litigation, because a good IPAM documents licensing agreements — what exactly you own, and when the patent comes up for renewal. Your IP business analytics tool can give you insight into potential threats, and a strategy for preparing for those threats before they materialize. The two systems working together provide a holistic approach to dealing with the legal realities of a world in which patent trolls dominate the unprepared.

Your licensing strategy can also be significantly more effective with an integrated IP management system. To enable this enhancement, your analytics tool should have collaboration features that allow your team to use it as a centralized repository. It’s not unusual for companies to have large research teams comprising scores of people—and without a way to pull all the patent research in a single place the research effort can often grind to a halt.

Once the licensing agreement is consummated by contract, your IPAM can be used to maintain and track the agreement and any renewal schedules the contract covers. If the contract contains termination clauses, your analytics tool can enable you to make determinations about when or if you should terminate the contract based on the terms of the agreement and changing market conditions.

It’s not really the case that an IP analytics business tool like Innography can take the place of your IPAM—it can’t. You will still need a way to track agreements, inventory, and to develop and execute workflows driven by a good asset management system.

What is true, though, is that your IP business analytics tool can complement your management system, so that you can make sound decisions as you tackle the discipline of holistically managing your portfolios.