Invention is neither a unique occurrence, nor is it the destination. Success with your invention in the marketplace is a journey. With that in mind, you really need to think about constructing a portfolio of patents rather than just having a single patent, at least if the invention you protect is commercially feasible.
Every year, NuCurrent Inc., a Chicago-based manufacturer of wireless charging devices, earns millions in patent licensing, from the likes of Apple and Motorola.
NuCurrent is not alone. Multiple firms generate millions – and sometimes even billions – of dollars simply in income from licensing.
Many businesses acknowledge that a well-crafted portfolio of patents can be used to achieve a multitude of company goals, such as strengthening market position, protecting research and development initiatives, generating income, and promoting favorable cross-licensing or settlement contracts.
Patent portfolios, packed with patents of high value, not only open a fresh income stream, but also help organisations emerge as market leaders. A patent acts a barrier against the entry of a competitor into valued innovations or key markets. However, a start-up should first create a patent portfolio strategy that is aligned with the business goals of the company in order to create an efficient patent portfolio.
Patents are not static rights; to maximize their importance to a business, they need periodic evaluation and maintenance. Keep a patent portfolio in line with your business goals.
You may think this is an apparent point. Patents are intended to safeguard an organization’s key inventions, what difference would a portfolio of high-quality patents create? A high-quality patent portfolio is designed in such a way that it safeguards the entire product line by patenting all the characteristics and any changes produced to a product, through powerful claims and divisional patenting.
Every firm with a strong business goal requires a patent portfolio management approach. A regular review and re-balancing of its contents will assist a business to retain a good portfolio once the portfolio is formed.
Sagacious employs a concept named F3 Analysis in order to maximize value from the complete patent portfolio. F3 analysis aims to deliver macro level insights, while ensuring to create value from each patent.
The patent portfolio analysis comprises the congregation of current patent elements, products and processes for the purpose of:
- Evaluating your current portfolio of patents to determine which patents are valuable enough to maintain or renew.
- Actions that need to be taken regarding patents that are pending.
- If there are any active patents that could be dropped, licensed or sold.
- Maintain a competitive edge.
- Identify cross-licensing opportunities.
- Protect their clients against potential litigation.
The patents are divided into three categories:
- Fundamental Patents
- Future Patents
- Fringe Patents.
They are the core and salient patents for any business. They are also called Product-Protecting Patents or Competition Covering Patents. They have the maximum potential to generate value using multiple strategies, such as licensing out, cross-licensing, litigation, etc. Other than revenue, patents can carry strategic benefits, such as a strong contribution to a company brand’s reputation or position in the marketplace. If a company’s competitors are making moves, a robust patent portfolio helps them maintain a competitive edge.
These patents broadly benefit companies in:
- Easier identification of patents for licensing
- Cross licensing negotiation
They are beneficial and valuable in the long run. To ensure they generate optimum value, a company must keep a vigilant check on current market, while strategically prosecuting the open applications. Companies utilize these patents in:
- Strategic prosecution by Draft Directed Claims
- Periodic check to protect their IP and restrict competitors on day 1
They are the secondary/non-core patents, which have the least potential for value generation. Consider business segments outside of your strategic focus or possibly even low-value competitors in your own segment. They are not used in any of the current products/services and represent technology that was pivoted at some point. Nonetheless, it can also be worthwhile to investigate if a patent can be licensed for use by another party, which can turn an underutilized or unnecessary patent into a new source of revenue. This route may make sense when it comes to older technology or an obsolete technology but may be of interest to someone else.
There are two major techniques to generate maximum possible value out of Fringe patents:
- Pruning and saving maintenance/prosecution fee,
- Licensing out relevant patents to start-ups, companies in a different domain. These patents can even be packaged with other patent sets.
It is an ongoing process to develop a good patent portfolio. Once patent assets start to achieve a favorable trend, portfolio management becomes just as essential. Not only will the portfolio stop generating income if it is not correctly managed, it can drain the earnings of a company.
Also, a strong patent portfolio helps survive litigation is a significant element of a patent’s life cycle in which the patent must stand the invalidity and novelty exams for the complainant to emerge as a winner.
You see, better safer than sorry!
A strong portfolio can enhance the return on investment in patenting and R&D initiatives by enhancing licensing possibilities as everyone who wants to work in technology has to obtain licenses over significant patents in a specific technology and designing a portfolio of high-quality patents often involves inculcating such star patents in one’s portfolio.
Click here to know more about F3 Analysis Model.