Economic headwinds are forcing Intellectual Property (IP) legal teams to evaluate strategies and spend with more scrutiny, including their patent maintenance strategy. Within this blog, we highlight five strategies to help corporate teams make better patent portfolio decisions.
In 2023, ongoing inflation and the potential of a recession are never far from mind. Legal teams are facing greater pressure to reduce costs and re-evaluate patent strategies. In a new white paper from ClarivateTM, Finding cost efficiencies in patent portfolio maintenance, we explore five strategies to help companies take a fresh look at patent portfolio maintenance decision-making and spending.
Strategy one: Use data to inform decision making
As companies look to tighten the belt around costs, IP teams need to be prepared to shoulder their share of budget reductions. When a directive arrives to reduce operating budgets, the IP team must be ready to analyze a potentially expansive portfolio and decide what to prune while also limiting the impact on any single business unit or region.
Introducing analytics-based patent scoring across your portfolio can provide indicators of patent strength and quality. Patents can be scored across a portfolio based on a range of criteria including:
- number of products supported,
- revenues attached to supported business units/products,
- competitor activity, threats and exclusions,
- average patent life to abandonment,
- and much more.
To help with this analysis, corporate IP teams can leverage patent analysis tools, like Innography™, to uncover a wealth of information. These tools make it easier to evaluate remaining life, patent strength, citation, estimated lifespan cost data and much more to help you make informed decisions with speed and precision.
Strategy two: Avoid inadvertent bad decisions
It goes without saying that corporate IP departments don’t want to make bad decisions. However, without comprehensive analysis and understanding of the overarching value and goals of a portfolio, legal teams might inadvertently take action that isn’t in the company’s long term best interests. Having the right information ensures you can make the right decisions and helps ensure you aren’t inadvertently discarding valuable assets.
Thorough and thoughtful analysis provides legals team the perspective needed to make the right decisions for managing patent portfolios – where to invest, where to shore up protection, where to save money and where to increase licensing activity.
Strategy three: Save on renewal fees
The official fees to sustain even a relatively modest portfolio over its lifetime have the potential to represent a multimillion-dollar investment. Renewal fees are often seen as fixed and unavoidable costs, but careful and strategic planning can potentially create room in an IP department’s budget.
Once you have made the decision to renew a patent, there are still possible savings available. There are typically three components to the cost of renewal, each of which can include scope for saving: official PTO fees, agent fees and service charges.
- Official PTO fees: Approximately 85% of the renewal cost. Generally, the only way to avoid these fees is simply not to renew. However, renewal strategies can help save even on official filing fees.
- Agent fees: Approximately 5-10% of the cost, but careful management of your agent network or direct payment where possible can help to reduce this element.
- Service charges: Approximately 10% of the overall cost, levied by service providers for the services rendered in the execution of the renewal. Negotiating these effectively can still make a difference.
Strategy four: Make accurate budget forecasts and actively manage invoices and payments
Patent maintenance fees typically increase with age, so merely iterating from past budgets can leave shortfalls that need to be made up. This is often at the expense of current filing programs. Accurate budget forecasts can serve as important reminders of the true opportunity cost of maintaining a patent.
Some organizations have basic processes in place to match and control invoices, including an e-billing system to match invoices to the right cases. This can mitigate some hidden costs, such as duplicate charges, but it distracts paralegals and attorneys from their more valuable roles in the organization.
Likewise, indirect hidden costs, such as high foreign currency exchange rates and bank transfer charges, will remain unfettered and put a strain on the bottom line. To avoid hidden costs when it comes to invoice management, consider a service like Structured Invoice Management, which can save you up to 15% of your total prosecution spend.
Strategy five: Make it pay for itself
Careful and regular examination of your portfolio can result in opportunities to monetize your portfolio that you may not have previously seen.
Looking at your company’s patent portfolio through the lens of monetization potential can lead to more than short-term cost savings. It may also reveal opportunities to monetize patents in new ways, including licensing, options for sale or strategic relationships.
Additionally, tools that help you review commercial literature and track competitor activity can unveil new opportunities to monetize patents or unveil potential infringers. For example, you can track competitor licensing activity to uncover similar opportunities in emerging markets that would suit assets within your own portfolio.
Strategic analysis of a company’s patent portfolio can lead to unexpected and potentially significant opportunities for cost savings. Approaches, like patent scoring, can help identify the real value of a patent, including consideration of opportunities for licensing and expansion into new technologies. Combined with fact-driven budget projections and a careful look at invoicing practices, these tools can provide a comprehensive cost-benefit analysis to empower companies to manage patent portfolios and make informed maintenance decisions.
Interested in learning more? Download Finding cost efficiencies in patent portfolio maintenance.