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2016 IP Management Trends

With the close of 2016, I couldn’t help but think about the top 5 IP management trends that I’ve observed over the past year. 

Doing More With Less – Haven’t we heard this one before? With growing portfolios, increasing workloads and budgetary constraints, IP counsel are faced with having to find more efficient ways of doing things. Thinking outside of the box seems to be par for the course these days. I anticipate that in 2017 this trend will lead IP counsel to seek more efficient operational processes, as well as to use more advanced legal technologies to help them deliver strategic services to their internal clients.

Greater Usage of Contextual IP Data – I’ve see an uptick in using IP asset-, operational- and financial-related information to manage IP portfolio development efforts. However, I think the learning that began in 2016 (and that will continue into 2017) is that not all IP data should be treated the same. IP counsel have struggled with ensuring that private IP data remains consistent, timely and accurate. What we have seen is different levels of confidence in IP data depending on the type of information and the cycles through which the information has progressed. Simple bibliographic information about IP assets often starts somewhat accurate, becomes more accurate as information is reconciled with other sources, but then becomes more sullied over time as multiple people become involved in the process. IP counsel often seek ways to maintain the pristine nature of this critically important private IP data. If successful, companies can utilize this data to drive strategic business decisions.   

A Focus on Financial Modeling. Financial modeling of IP expenses is becoming a more regular practice which is being further accelerated by new legal operations groups that have sprouted up within larger legal departments. With increased expectations, IP professionals, both in-house and outside, will need to become familiar with accrual accounting and able to predict when IP costs are going to hit their budgets.

Forecast Is Cloud-y and Secure – For years, engineering teams have increasingly used cloud-based services to speed their product development cycles. Sales departments have also used cloud-based services to centralize their information knowledgebase for sales-related activities. So it is no surprise that legal departments are more regularly using (and having their outside counsel use) secure, cloud-based services to centralize their day-to-day IP operations.

Quality Over Quantity Continues. When the top patent holder lists come out every year, many excitedly skim the list to see who the top patent holders are, how their company rankings have changed and what’s happened to their competitors.  However, my use of this list does not go much further than this as I remind myself that quality over quantity should be the mantra.  We’d all like to think that every patent asset is a crown jewel—why else would you be filing a new patent application for it? However, filings are done for many business reasons. My rule of thumb is that at least 3-5% of a high-tech patent portfolio should be critically important to the business, protecting the highest revenue products and services and critical technologies. In other industries, such as pharmaceutical, this percentage is significantly higher due to the lower number of overall patent assets issued and the close alignment of patents to specific products. The key takeaway is that numbers typically do not matter and such numbers by themselves don’t signify IP portfolio quality or strength. Rather, it’s about how many “crown jewel” or strategically useful IP assets a company owns. Companies should have a good understanding of which specific IP assets are the most important to their business.This ability to use an IP asset for a specific strategic business purpose is more important than simply having a large portfolio.

While this list of IP management trends is non-exhaustive, it does represent those that I think are the most impactful.If you’ve observed other IP management trends, please do not hesitate to reach out to me – it’s always great to continue the dialog.

 

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