The Art Of Patent Management

Management of patents is a central issue for the success of start-ups in the technology sector. If a company like IBM files a patent on technology developed by your start-up, you won’t have first rights over the usage of your own invention.

Before discussing the nuances of patent management, it is essential to understand what a patent means. An appropriate government body grants a set of exclusive and jurisdictional rights to the inventor like distribution, sale, use and export; these rights are collectively known as a patent. For obtaining a patent, an invention must satisfy three basic criteria: Novelty,Non-obviousness and Utility. Inventors who publicly disclose their invention before filing a patent lose on the grounds of novelty.

An entrepreneur must therefore know :

The level of disclosure to make in public before filing a patent
The parts of the invention that are patentable, and
Whether those parts have already been covered by any other prior art.

Knowledge and Intellectual Property is a startup’s prime asset. Realizing the commercial value of the intellectual property is crucial for a startup. The value it adds to the business is well depicted in Gordan V. Smith’s famous book Intellectual Property: Licensing and Joint Venture Profit Strategies’.

Intellectual Property is a legal definition of ideas, inventions, artistic works and other commercially viable products that are the result of one’s creativity. In the same way real estate titles and bills of sale establish ownership of tangible items, intellectual property is protected by patents, copyrights, and trademark registrations.

Patent management deals with obtaining, maintaining and leveraging gains out of patents. This process involves various technical, legal and business skills. Identifying, developing and assessing the technology involved in a given patent requires some amount of technical knowledge. Legal expertise helps understand the boundaries of the patent, scope of possible infringement, and selling or licensing the patent. The end objective is to maximize profits from the patent, which involves business skills.

While numerous professionals are often involved in obtaining and maintaining patents, it is also possible for an entrepreneur to do the work by themselves. Professional help is often essential if the invention is complex and the potential profitability is high.

Some of the biggest companies in the world generate billions of dollars through efficient commercialization and licensing of their patents. Take IBM for example; they generated revenues in excess of US $1 billion from more than 30,000 live patents in 2007. The University of California, during the same period, generated over US $100 million from its 3,000-odd patents. As rightly said by Jackie Hutter, IP &Patent Business strategist, “[The] goal of building a solid patent portfolio, is to make your business an attractive target for investment, or acquisition by a larger company.” Patent portfolio management hence involves the study, valuation and commercialization of patents.

A recent study shows that 60% of all patents filed in the US are by individuals. However, as far as revenue generation is concerned, corporates make 99% of the revenue from all patents procured, leaving individuals with only 1% of the pie. This happens because individuals are not aware of the ways in which their patents can be monetized. The situation is worse in Asia because individuals here are more ignorant.

To summarize, it can be said that a person who owns intellectual property must: