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Patent quality is a critical factor in portfolio management, especially for technology companies, where intangible assets like patents significantly contribute to market value. These patents are not just budgetary considerations; they serve as strategic tools for growth and market share. So, what defines a strong patent portfolio?
The strength of a patent portfolio is gauged by the quality and quantity of its patents. Quality refers to the capacity to exclude others from using a desired technology. It depends on factors such as the demand or interest in the technology, overall market dynamics, and the comprehensiveness ensured by the drafting attorney during patent preparation. In contrast, quantity involves amassing numerous patents in a specific area, acting as a deterrent to competitors and safeguarding the company’s market position.
Portfolio quality directly correlates with the effectiveness of granted patents and the potential held by pending applications. A high-quality portfolio signifies that the patents within it are valuable, legally robust, and possess substantial defensive or revenue-generating potential.
A Business-Centered Approach to enhance Patent Portfolio Quality
This approach involves aligning patent strategies with overall business goals, conducting thorough market analysis, identifying valuable patents, and optimizing portfolio management to maximize commercial potential and value. By adopting this approach, companies ensure that their patent portfolio is strategically aligned, well-managed, and contributes to business growth and success.
For example, if a business aims to preserve market share, patents protecting incremental improvements in the relevant technology may be considered higher quality than those covering disruptive technologies. This is because extending established market share is valued more than other patent monetization methods, even though disruptive patents can still benefit the established player.
Importance of balancing Quality and Quantity in Patent Portfolio Management
Intellectual property represents a substantial part of a company’s value, with patents being critical. However, many companies view patents as a cost center, often overlooking their strategic importance.
A strong patent portfolio combines quality and quantity, tailored to specific business goals. Balancing quality and quantity are a resource management challenge, as quality entails variable costs while quantity involves fixed expenses. To maximize value, it’s essential to align the quality-quantity strategy with business goals and consider different priorities for various technologies or business segments. Many a times, the recommendations for quality-quantity strategy come from patent counsels who have a deep understanding of the law, business, technical and market knowledge.
Strategies for Maintaining Patent Quality in Portfolio Management
- Patent Pruning
Patents that were once crucial may lose relevance if they relate to discontinued products or uncommercialized technologies, making their escalating annual maintenance fees an unjustified expense. Remember, you aren’t obligated to maintain a patent’s full 20-year term; you can strategically cut costs by letting patents lapse if they no longer serve your business interests, especially across multiple countries.
- Competitor Monitoring and Analysis
When managing a patent portfolio, competitor analysis provides crucial insights into market trends and changing strategies. This helps in guiding R&D investments and research allocation. It also aids strategic patent filing, anticipates competitors’ future moves, and ensures the portfolio stays competitive and relevant in the market.
- Constantly aligning legal with business
Maintaining a quality patent portfolio involves clear communication of your business goals and regular strategy meetings to align your patent strategy with business objectives. You can rely on your attorneys for expert legal advice, informed decision-making, and regular portfolio reviews to assess each patent’s value and relevance to the existing product and research strategies.
- Extending scope of existing patents
Continuations help you increase the scope of your existing patents and help adapt them to meet any follow-on ideas that come up from R&D. They can also be driven by pre-emptive measures taken due to changing market conditions. Since they share the same priority as the first application, the overall quality and depth of the invention family is improved.
- Conducting Patent Landscape studies well in advance
Before you decide to enter a new technology space, you must conduct thorough patent landscape analysis to map the trends, opportunities, and threats in that space. Identification of potentially blocking patents held by a competitor can help craft the right patenting and product development steps to be taken to avoid a risk of litigation and thereby help save the company from associated future costs and delays. This also results in a higher quality portfolio that can help the company maintain its turf in the new space.
PatSeer ProX combines quantitative and qualitative assessment of patent portfolios to give you an accurate picture of the market leaders, challengers, and niche players. PatSeer’s Patent Quality scores benchmarks patent families based on 30+ parameters and multiple connected datapoints such as oppositions, litigations, SEPs and NPEs help you gain insights not possible elsewhere. The patent analysis software allows for comprehensive studies of technology spaces, and the user-friendly yet feature-rich system is designed to meet professionals’ needs, saving time, and ensuring high-quality results.
Final words
In conclusion, patent quality is vital for tech companies where patents significantly impact market value. A strong patent portfolio balances quality and quantity, aligning with specific business goals. Balancing quality and quantity require strategic expertise and a deep understanding of the business and IP landscape.
