Detailed Question 1: Our company spends a lot on IP capture and, as a business leader, I need to justify that expense for each IP right we fund. Why is each item of our IP worth the spend? … What is the ROI?

Common answer: Many companies justify IP investment simply because an R&D team creates a seemingly-novel technology. However, the presence of novelty is often confused with value. There are many novel routes for climbing Everest, but a vast majority of them are not valuable. Selection bias exacerbates the illusion of value as project leaders sometimes promote the use of novel features when simpler off-patent features are available.

Strong answer: The IP investment is better justified when the inventor team can show that the claimed features cover a key value driver in the technology of the project. Patent protection directed at a reason why the customer prefers your product.

Stronger answer: The IP investment is further justified when the inventor team can show that the claimed features are a solution to a problem faced by the industry or present in existing technologies.

Detailed Question 2: The business needs to understand why the company’s IP is valuable. It is not enough to simply say that the IP vaguely protects our designs. Why, exactly, is our IP valuable to the business? … to others? … to the market?

Common answer: Many companies assert that their IP is valuable simply because it protects literal copying of the company’s designs. This is a good starting point; however, your competitors are as smart as you and they will find a way around your patent claims or otherwise design alternative technologies. Your competitors will be highly motivated if your product truly has commercial value.

Strong answer: IP value is stronger when your inventions can be framed as solutions to an industry-wide problem that is not limited to your company’s specific designs.

Stronger answer: IP value can be even stronger when your inventions are also solutions to your competitors’ specific problems or limitations.

Detailed Question 3: Business leaders are told that the company’s IP is valuable. Which IP can we monetize this fiscal year? … in the next 5 years?

Common answer: Many companies create or manage IP portfolios according to company short-term needs and do not consider monetization options until abandonment is contemplated. Monetization options may be further limited when otherwise marketable IP is mismanaged or boxed-in by company bias (e.g., a perspective that sees value only from an internal viewpoint).

Strong answer: Patent portfolios created or modified to have sellable or licensable components can permit monetization. If managed correctly, IP rights can be shared with competitors while still providing a competitive advantage to the patent holder.

Stronger answer: Patent portfolios designed or modified to be in front of your competitors’ next steps have potential for greater value.

Detailed Question 4: Much of the company’s value is housed in its IP rights. How do we know that we have maximized our options, our opportunities?

Common answer: Many companies focus on short term needs and view IP generation as a transactional function, i.e., each item of IP is a discrete position taken in response to a motivator, such as a request for an IP filing from an R&D team. External counsel is often selected based on lowest cost and thus driven to get the immediate application-filing transaction completed and move on to another, leading to a profit model based on application-filing volume and the occasional clearance or enforcement project. Clients do not miss what they do not ask for. This model works well for (1) low-value products and (2) companies that can tolerate the high maintenance costs of large portfolios.

Strong answer: Greater analytical and strategic effort can bring coherence and focus to an IP filing strategy for higher-value products. However, the additional cost of such efforts is often too expensive when handled by external counsel or beyond the skill or bandwidth of internal counsel. A clear strategic goal and creative planning for this work can better match resources/costs with desired results.

Stronger answer: A full strategic effort can be budgeted and executed to achieve significant competitive advantage when properly defined and managed. The strategic goals can be, for example, crafted to (1) dismantle a competitor’s patent portfolio, (2) defensively structure patent protection on multiple layers so that the loss of any one patent does not topple the protection, and (3) offensively target key value points of the technology, product, therapy, or market to create litigation and licensing positions.