Viewing IP as a supply chain

Accelerating IP growth combined with competitive market pressures mean that we’re going to see IP lifecycle management decisions move from the back room to the boardroom

If the Apple v. Samsung patent war has taught us anything, it’s that patents can be extraordinarily valuable business assets. When Apple was awarded a billion dollar settlement against Samsung, inside counsel everywhere were reminded that patents can serve as both a defensive and an offensive weapon in protecting a company’s intellectual property.

IP is a business asset that strategically positions corporations; given this, it should be though of as a valuable asset, not as merely a way to mitigate risk. Lawyers, from the time they attend law school, are trained to protect companies against risk, and this means teaching them to think in terms of liability rather than in terms of maximizing business value. That is a shame because in today’s innovation-centered economy, it’s vital to be thinking not only about how to maximize the number of patents a company has, but also the lifetime value those patents bring to the organization.

When you think about it, seeing an invention through the entire patent process is analogous to building an airplane. It all starts with the raw material, then moves through to through molding, building and assembly, production and maintenance. Different teams touch each piece of the plane during its lifecycle, and this requires a tremendous amount of coordination and collaboration across the whole supply chain.

Surprisingly perhaps, the same is true for patents. The raw materials in this process are the ideas. As ideas go through the required steps of becoming valuable business assets, they pass through numerous departments and are received, reviewed, assessed and/or handled by literally dozens of people, all with different assignments. This is why it makes sense to look at best practices for managing a company’s IP the same way we look at best practices for building and maintaining planes (or anything complex and valuable in nature): by optimizing the overall supply chain

Given that patents must be filed within a strict one-year timeframe after the process has begun, the best way to maximize throughput (and therefore patent value over time) is to take a metrics-driven approach that measures the effectiveness and timeliness of each and every step in “IP supply chain.” Like a plane with comfortable seats but no flame retardant on them, if you don’t analyze and manage each step of your innovation supply chain, you could be putting at risk an business asset of great strategic value.

So, how does one measure patent lifecycle efficiency? Well, the answer I typically get from legal teams is that they annually review how many inventions were disclosed and how many were filed. Period. Now, what they do is necessary to be sure, but it’s hardly sufficient for those who want to optimize the IP supply chain.

For those who want to maximize the value of all of their IP business assets, it’s vital to take a throughput perspective and measure each of the following elements on a monthly basis:

  • How many disclosures were received?
  • How many disclosures were reviewed?
  • How long was the typical review cycle?
  • How many decisions did we make?
  • How many patents did we file?
  • How many patents were we issued?
  • How many active patents do we have?
  • How many patents did we remove from our portfolio?

Such metrics can be found in reports, so it’s relatively easy to see process discontinuities and figure out where process bottlenecks exist so that you can begin to address them. Unfortunately, the majority of companies do not yet make the time to drill down into these IP supply chain metrics. It’s unfortunate because, in an innovation-based economy, the devil is indeed in the details.

Companies that review, assess and optimize at their entire IP supply chain can gain significant competitive advantage and enhance corporate value because they can put into place action plans to address any delays or inefficiencies found in their current process. The fastest way to turn great ideas across your company into tradable business assets is not hiring more inventor types or doubling your legal team. It’s taking a different approach to IP: one that increases both your throughput and overall efficiency.

As the World Intellectual Property Organization (WIPO) director general Francis Gurry recently pointed out, “Intellectual property, in general, is in a growth mode, and in a growth mode which is considerably in excess of either the national GDP growth rates or the world GDP growth rates.” My bet is that rate of growth will only continue to accelerate in the coming years.

Bottom line: Accelerating IP growth combined with competitive market pressures mean that we’re going to see IP lifecycle management decisions move from the back room to the boardroom. The only way for any organization to ensure it stays ahead of the competition is to take a metrics-driven approach to IP lifecycle management and take the actions necessary to optimize their entire IP supply chain.

Contributing Author

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Gregory Daines

With more than 15 years of experience focused on innovation and intellectual property management, Greg joined Lecorpio in 2012 to manage the Client Services team...

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