How important is it to manage your Intellectual Property Portfolio of Assets?

 

Consider this:
Just over 20 years ago corporate assets consisted of: 20% intangibles (patent, trademark, copyright, customer goodwill, etc.) and 80% tangible assets (plant, equipment, inventory, etc.).  Today corporate assets consist of 73% intangibles, and 27% tangibles, showing that INTANGIBLE assets have truly become a significant factor in the valuation of a company and must be managed to optimize their value.  In fact it is predicted that by 2007, 90% of the assets will be intangibles in the worlds 2000 largest companies.     

 

Just over 20 years ago the annual revenue from intangible asset licensing activities was about $3 billion, today the revenue from intangible asset licensing activities is about $150 billion.  Another factor is the dramatic increase in U.S. patenting activity in that in 1990, 90,000 patents were issued and that in 2003, 184,000 patents were issued.    

 

Intellectual Property has truly become a significant factor in the new information or knowledge economy, both in terms of value and revenue.    

 

What does an Intellectual Property (IP) Portfolio Contain?

(Note that this list is by no means exhaustive of what could be included in an intellectual property portfolio, it is given as an example of what types of information that an intellectual property portfolio contains)

 

Use this checklist as a starting point for the information in your IP portfolio.

 

Creating and acquiring Patents, Copyrights, Trademarks, Trade Secrets, Trade Dress, Licenses, and Confidentiality Agreements are only a start; remember that your intellectual property assets require continuous management to be optimized for the long term. 

           

 

A.) A listing of all current IP assets with information on:

1. Terms, renewals, maintenance / annuity fees, and expiration dates.

 

2. Geographical coverage.

 

3. An ongoing assessment of current legal and commercial strengths of all IP assets.

 

4. Current status of licensing, assignment, and pending sale issues.

 

5. Current status of pending litigation, applications, disclosures, and opinions.

 

6. Infringement policing activities, and pending oppositions against outsiders.

 

7. Product notices being in place.

 

8. Watch of 3rd party issuing of patents in your field of technology and other applicable prior art that was previously unknown.

 

 

B.) Trade Secrets control procedure that includes:

 

1. Proprietary information is identified and classified.

 

2. Security measures to control access to proprietary information.

 

3. Confidentiality agreements are executed and secured in a safe place.

 

4. Document notices in place for trade secrets.

 

5. Employee training, and responsibilities defined to monitor all information flow in and out of your company.

 

6. Monitoring your possible infringement against others.

 

7. Proper documentation of your firm’s creative activity.

 

8. Managing the “transformation of technology” from the conception of an idea, to prototyping, to commercialization, while at the same time protecting the technology with the appropriate intellectual property rights as the idea requires different forms of legal protection.  

 

 

C.) Appointing an employee of your company to be an IP liaison individual to become your in-house focal point for IP issues who does the following tasks:

 

1. Who has extensive product and process knowledge of your company and can be trusted with confidential information.

 

2. Who provides on-going day-to-day support and training for your employees, vendors, and contractors for IP awareness.

 

3. Who monitors compliance with IP related procedures, tracks confidentiality agreements, and answers questions.

 

4. Who maintains control of your IP portfolio for changes in technology, business plans, strategies, and the law. 

 

5. Who is the contact point for your IP attorney and makes the attorney aware of significant IP issues. 

 

6. Who creates an IP budget, defining IP costs, performing financial analysis to maximize value in your IP protection for money spent.

 

7. Who assists in decisions concerning additions and removals from the IP portfolio.

 

8. Who initiates policies to stimulate the “mining” of intellectual property from employees to convert these employee innovations into protected intellectual property that can be assessed for its commercial potential and to facilitate the commercialization process. 

 

9. Who initiates the process for various forms of legal protection for assets in the portfolio depending upon their commercial potential and their fit into the overall business plan.

 

10. Who initiates a system to organize all of a company’s intellectual property to minimize the “reinvent the wheel” syndrome, in other words an organized and indexed storage and retrieval system for employees and others to re-use information that has been developed. 

 

11. Who develops a system to constantly evaluate licensing revenue, cross licensing, selling, donating, and collateralizing opportunities for all the assets of the IP portfolio.      

    

 

These items create a useful business planning and valuation tool while providing documentation for future IP related issues to help your business grow and prosper for the future.