Unfortunately, it is very common for most intellectual property owners, no matter what their size, to take a haphazard approach to managing IP assets. As a result, the decision whether or not to seek protection for an asset is often an afterthought and may even happen after the product development cycle is well underway. Another risk is that the IP asset will not be assessed as part of a larger strategy, but instead protected out of a vague sense that it is valuable.
A more logical approach is to conduct an IP audit to collect and analyze information about existing and potential assets so informed and strategic decisions can be made regarding protection. A complete and thorough audit will identify all assets that are subject to legal protection. Also included are the details on any issued patents, registered trademarks, any copyrights and any trade secrets. The audit should also include such things as pending patent and trademark applications, foreign IP assets, confidentiality agreements, and employee non-compete agreements.
Once an audit is complete, the information should be organized and maintained in a format that allows the owner to easily reference and understand what they own. For example, spreadsheets that show the status and inter-relationships of patents and pending applications should be used. The claim language of the patent claims should also be included to allow personnel in the company to be aware of what the company’s patents actually cover. A comprehensive patent spreadsheet with claims allows the owner to monitor their patent portfolio and be aware of any gaps that they may have in their patent protection. Also, the portfolio should be monitored not just by company management but also engineers, R&D staff, and sales and marketing staff as well. Often sales personnel will be the first to become aware of infringing activities by competitors so it pays to have them aware of what is protected.
One word of caution: The owner should not attempt to define or explain the claim language of a patent in the document. The claim language should stand on its own. If an informal or short hand definition is made, this may be a limiting admission if the patent is ever the subject of litigation.
The spreadsheet may include an informal characterization of each of the patent as to whether it is offensive or defensive in nature. Broad-based, aggressive, and offensive types of patents typically come into play if an owner is looking towards enforcement to shut down competitors and/or licensing agreements to generate revenue. In contrast, defensive patents are narrower in scope and may be aimed at trying to protect existing or anticipated product lines. These patents are typically used if the owner’s industry involves fields that are very crowded with competitors who also have significant patent portfolios. Therefore, the owner is probably not going to be as aggressive in asserting the application against a potential infringer. Additionally, a defensive patent is often used by a smaller start up venture with the intention of being acquired at some point. Defensive patents will add to the potential value of the company at acquisition time.
Once an IP spreadsheet is created, regular meetings should be scheduled to update the portfolio information, review the status of pending matters, identify any holes in protection, review new assets, and plan future actions. If such a spreadsheet is successfully created and maintained, an owner will be able to not only keep track of what is protected but also truly understand the scope of that protection.