By Johanna Dwyer, CEO and Founder, QipWorks, Inc

An effective intellectual property strategy is an integral component in the business models of successful technology companies, and is often their key source of competitive advantage. Yet a surprising number of companies have no IP strategy at all. Of those that do, most have IP strategies that have been written completely independently from their business strategy, focusing solely on the number of inventions and patent grant percentages.

There’s much at stake: In 2015, intangible assets accounted for more than 85 percent of the value of the S&P 500

[1], which illustrates the impact of IP on the valuation of publicly traded companies.

In companies that lack close alignment between IP strategy and business strategy, it is typical to see that 10 percent or less of IP assets contribute over 90 percent of the IP portfolio value, while the rest of the portfolio costs money to own and maintain[2]. As shown in Figure 1, the goal of a company’s business-aligned IP strategy is quite simply to have more patents worth more money.

IP management has traditionally been viewed as the isolated role of IP lawyers and patent professionals. But as the pace of innovation has accelerated, a company’s ability to actively extract value from IP relies on top management involvement, cross-functional collaboration, a comprehensive and regularly updated business-aligned IP strategy, and IP awareness throughout the entire organization.

IP departments have a responsibility to align their work with the overall goals of the company by understanding the company’s business, identifying key stakeholders, and looking for ways to use IP to create business opportunities by evaluating the challenges that the company faces. This is not just about finding an invention and filing a patent. Strategic IP tasks at the corporate level include analyzing how attractive an industry is from an IP perspective, uncovering the IP implications of mergers and acquisition, considering how intellectual assets may impact taxation, and designing organizational IP structures or processes that interconnect different parts of the IP value chain.

Innovation as a process benefits from participation of technical experts in R&D, marketing professionals, senior management, finance, legal, outside consultants, suppliers, service providers, business partners and lead customers. Engagement between all parties, with the support of top management, leads to a better-aligned IP strategy and improved exploitation of IP assets.

IP strategists offer this cross-functional expertise and combine it with communication and collaboration skills to help companies increase the value of their intellectual assets through bespoke comprehensive strategies tailored to each company’s needs. IP strategists have a unique ability to serve as a bridge between different functional departments; transcending silos, fears of idea theft, and other esoteric behaviors which may be seen in companies and form a barrier to collaboration.

Unfortunately, identifying and protecting IP is an afterthought in many companies as it may be viewed as insurance instead of a vehicle that may add value to the bottom line of the company. Too often, IP discussions are seen as a delay-causing distraction in the cycle of generating a business idea, undertaking R&D, and manufacturing a product.

Large companies who have operated in this manner for a long time end up with a massive war chest of patents numbering in the tens of thousands. Filing, prosecution, and annuity costs run into the tens of millions of dollars a year. Yet when asked a straightforward question about these assets — “What is the purpose of each and everyone one of these patents in relation to your business?” —no one has the answer. Why, then, do companies continue to own and pay for patents when they don’t know what they are for?

Every patent should be filed with a purpose, and that purpose needs to be reviewed and updated throughout the lifetime of the patent. This vision is part of the IP strategy, which should be continuously updated with information from the knowledge environment – an outdated strategy can be as ineffective as not having one.

 

QipWorks is a full service advisory firm with offices in Cambridge, MA and London, UK that partners with technology companies, innovators and investors to build, manage and utilize IP portfolios.

Johanna Dwyer is CEO and founder of QipWorks, Inc. Previously, Ms. Dwyer founded the Innovation Lab for Saudi Aramco, where she developed IP strategy and technology commercialization processes, advised Aramco’s VC funds, and built collaborative engagements. As General Manager of Federated Wireless, Ms. Dwyer executed a turnaround and positioned the company into wireless spectrum sharing. At BlackBerry she led a global team responsible for setting the direction of next-generation industry standards for mobile communications and radio technologies. Ms. Dwyer has an MBA from MIT, holds degrees in mathematics and engineering, is a Senior Member of the IEEE and is on the Board of Editors for the Research-Technology Management journal.

Paul Carpenter is Partner at QipWorks UK Limited. Mr. Carpenter previously played a fundamental role in advancing BlackBerry’s foundational patent portfolio. He instigated and led multiple IP programmes bringing diligence to high-value assets. He was integral to the monetization of this portfolio realising $100Ms, reducing cost of ownership by 20% and developing 100’s of litigation-ready claim charts.  Mr. Carpenter has extensive success defending and protecting against aggressive IP assertions by practicing and non-practicing entities and has instigated and led IP programmes designed to bring rigour and focus to high-potential intellectual assets. He led the development of globally adopted wireless telecom standards and is inventor on 30+ patent families, including 9 declared as essential for wireless cellular standards. Mr Carpenter holds an MSc in Management of Intellectual Property from Queen Mary University of London and an MBA in Engineering Management from the University of Bradford.

Daniela Sanchezis a Patent Analyst at QipWorks, Inc. Ms. Sanchez has experience assessing and mapping patent families across a range of industries, preparing patent applications, and maintaining patent portfolios. Previously, she worked as a technology analyst for Saudi Aramco’s Innovation Lab where she led efforts to establish a process to protect intellectual assets resulting in the successful filing of 92 U.S. patents and over 200 technical publications. Ms. Sanchez holds a degree in Microbiology and will be pursuing a J.D at the University of Michigan Law School in the fall.

 

[1]‘Ocean Tomo Releases 2015 Annual Study of Intangible Asset Market Value’. Posted:2015-03-05-13:00, Available: http://www.oceantomo.com/blog/2015/03-05- ocean-tomo-2015-intangible-asset-market-value/ Downloaded: 2017-04-17 at 11:10.

[2]Samsonowa, Tatjana & Bittner, Peter & Lundsager, Bent. (2013). IP Dashboard: Measuring and Managing IP Performance. Available: http://i3pm.org/files/misc/Measuring-Managing-IP-Performance.PDF Downloaded: 2017-04-17 at 11:10.