With board directors and company shareholders becoming increasingly aware of the value of intellectual property — and wanting to know what’s being done to utilize a company’s IP assets to optimal effect — the spotlight is on the in-house IP lawyer more than ever before. But is this higher profile something of a mixed blessing?
Intellectual property — once, for most people, just a vague concept behind headline-grabbing new products and gadgets — has been making news in its own right over the past couple of years.
Media attention has been driven by ongoing litigation between some of the biggest players in the smart phones field; billion dollar patent acquisitions in the hi-tech space; closer scrutiny of the impact on the pharmaceutical industry as the patents on many blockbuster drugs approach their ‘expiry date’; trademark infringement claims as key-word bidding becomes the a prime value driver for online businesses; as well as the rapid growth in patent filings in Asian markets, such as China and South Korea. IP assets are increasingly an important factor in M&A activity and in facilitating business finance.
This has all led to a greater realization of the need to create effective strategies to promote IP development, safeguard valuable intellectual assets and gain a competitive edge. Directors and shareholders of companies around the world have become more ‘IP aware’ and are increasingly seeking information about corporate strategies to exploit existing IP portfolios, grow future portfolios, structure them in a way that makes financial sense for their business; and manage IP related risk.
Today, very few organizations are in a position to patent every one of their innovations or to register infinite numbers of trademarks, domain names or design rights. The management of IP portfolios requires more astute thinking and the ability to make informed, strategic decisions based on market developments, competitor activity, value to the business, and costs.
As a result, in-house IP lawyers have been propelled directly into the corporate spotlight, providing them with the opportunity to underline their value to their organizations. Indeed, many in-house IP teams with whom CPA Global works say they are increasingly being asked for their opinion on wider business issues around innovation and R&D as their companies seek to align IP strategies with broader business strategy. Instead of being viewed simply as technical experts advising in a reactive or isolated way, the IP team are being encouraged to become consultative business partners within their organizations — and are becoming recognised as key stakeholders in decision-making around their companies’ IP and product development strategies.
The flip side of this is that the increased focus on their roles brings higher expectations and greater demands on their time. Consequently, many in-house IP lawyers are finding they have to manage a vastly increased workload with the same or less budget and resources, which presents a whole series of new challenges. However, there are ways in which corporate IP departments can do more with flat or decreasing budgets, while freeing up skilled internal resources to focus on the more strategic work that today’s IP management requires.
The management of IP assets involves a number of sophisticated, but time-consuming processes, particularly with larger portfolios. However, much of this can be automated by using the right IP management software.
High levels of automation and the integration of workflow processes, decision support tools, IP support services, and comprehensive reporting can enable IP departments to be more informed, more efficient and more consistent in their handling of IP assets. It also assists with risk management. This, in turn, helps them add greater value to their business by achieving a better return on their IP investment.
In many cases, there will also be opportunities to generate improved return on investment through comprehensive patent research. For example, a technology company that regularly conducts searches prior to filing a patent application may routinely be able to exclude a significant proportion of its planned filings on the basis that the application is not novel, resulting in savings on their drafting, filing and prosecution costs. For a large organization with over 1,000 filings, that can run into millions of dollars. In other cases, regularly reviewing and updating registered IP portfolios will ensure protection and investment are aligned with the strategic goals of the business.
Faced with increasing workloads and limited resources, in-house IP departments can also generate efficiencies by sharing the burden of work — utilising their external counsel and/or specialist third-party IP service providers to handle certain tasks, leaving the in-house team free to deal with more strategic corporate IP issues. This allows them to establish virtual support teams that enable them to scale up resources easily and quickly as required. By allocating the work in this way, in-house teams are better able to meet the greater demands imposed upon them without increasing headcount and fixed costs, while creating all-important flexibility.
Bottom line benefits
The decision-making process around how to optimize a company’s IP portfolio is one of the most important that companies should go through when reviewing their business strategy as it can be critical in ensuring that current and future portfolios are properly aligned with the overall direction of the business.
For example, the process will help determine which IP Rights are the ‘crown jewels’ that must be protected at all costs and where there are technology or brand gaps in the portfolio; which IP Rights are not central to the business strategy and could generate more revenue for the company through licensing or sale; which rights perform a defensive role; and which are no longer of value and can be pruned, saving money on maintenance costs.
While few in-house IP teams have the resources to handle all the work involved in such an undertaking on their own, it nevertheless provides them with an opportunity to shine. At the end of the day, astute management of IP assets can have a significant impact on the bottom line and, ultimately, the valuation of a company.