Monthly Archives: December 2008

The US Patent Office’s Impending Financial Crisis and What Sort of Disruptive Innovations Might be Seen as a Result

US Patent Office

US Patent Office

My postings have been light for the past few weeks because of the Holidays. I plan on re-posting regular content after the New Year. Nonetheless, I couldn’t help posting something this week during my vacation after coming across this wonderful analysis of recent patent issuances post-KSR from Matt Buchanan of the Promote the Progress website and blog. Matt’s analysis of PTO issuances over the past several years shows that KSR definitely had an effect on the number of patents issued in the last year.

What is obvious from Matt’s 2008 issuance data is the fact that the PTO experienced a significant decline in revenue over the past year due to the reduction in issue fees paid by successful patentees. Moreover, this revenue decline will certainly be felt over the next 10 plus years as a result of a reduction in maintenance fees that would have been paid for these issued patents. When coupled with the current economic crisis and the need for the U.S. government to fund agencies and projects that are arguably much more critical to the health of the national economy, there is no doubt that the PTO will be faced with a significant revenue shortfall in the immediate future. As an additional issue, with the huge budget issues that the U.S. government will be facing, I believe it is highly doubtful that the PTO will see the end of fee diversion in the foreseeable future. Taken together, these factors lead me to predict that we will soon see irrefutable evidence that the PTO is in a “world of hurt” from a revenue perspective.

The good news may be that, like for the rest of the US economy, near collapse of the existing status quo may provide opportunity for the PTO to experience disruptive innovation. This is in contrast to what, in my opinion, has been only incremental innovation over the past several years. What do I think such innovation would look like? Continue reading

Do You Know Your Company Needs Strategic In-House IP Counsel, But Think You Can’t Afford It? One Company’s Solution is Hiring Part-Time Counsel

Examining new ways to hire in-house counsel saves $

Examining new ways to hire in-house counsel saves $

Analysts say that the current economic downturn will likely last at least until early 2010. While this no doubt seems like almost an eternity for the average consumer, for business strategic planning purposes, this date is just around the corner. Indeed, business managers at many companies are likely conducting “short term” strategic planning efforts targeted for introduction in mid-2010. This might account for the recent uptick in job postings for experienced corporate intellectual property attorneys. I see this increase in job opportunities as signifying that smart corporate leaders are realizing that sustainable business success requires companies to not only introduce innovative products and technology offerings, but also that they strategically protect such innovations. As a result, I believe that more companies will seek to hire strategic in-house IP counsel, which is good news for us IP types.

Of course, the traditional model of hiring an in-house IP counsel results in significant costs to a company–likely at least $250K per year on a fully loaded headcount basis. Such an expense may be out of the question for many small or mid-sized companies; nonetheless, the cost of hiring a sophisticated in-house counsel does not eliminate the need for innovative businesses to engage strategic IP representation. Put simply, small or mid-sized companies are not immune from competitors’ knocking off of their innovations. IP-related cost avoidance by any sized company engaged in innovative product or technology introductions is therefore a short-sighted policy. Accordingly, small and mid-sized innovative businesses must strike a balance between effective IP protection and headcount cost issues. Continue reading

Companies Adopting Open Innovation Methodologies Must Incorporate Patent Information for Maximum Value Creation

Open Innovation can create joint ownership of inventions if care is not taken

Open Innovation can create joint ownership of inventions if care is not taken

Open Innovation is unquestionably becoming a “hot” area of focus for U.S. companies, especially in the current economic climate in which businesses are more than ever focused on smarter ways of doing business. And, why wouldn’t Open Innovation be an intriguing business model when companies can fill their product and technology pipelines for significantly lower cost and with more variability of ideas than typically is possible from their own R&D infrastructures? As a result, more and more business leaders are today viewing Open Innovation as a necessary direction in which to move their company’s innovation efforts.

A fundamental premise of Open Innovation is that good ideas can come from anywhere, even when a company operates in a very specialized core business. Moreover, innovations that come from outside of one’s core business, such as in packaging or transportation, are better left to those who specialize in those areas. Perhaps more controversial is the assertion that by relying only on the ideas generated from within, an organization’s core business innovations can become self-limiting because the pool of knowledge and idea generation may become somewhat myopic. When properly deployed, Open Innovation methodologies not only can be the source of ideas generated outside of the organization, but can also serve as a catalyst for the existing R&D infrastructure to become more creative. In its best forms, Open Innovation becomes a source of new products and technology, as well as a means to spur the creativity of one’s own people. Continue reading

Patent Monetization Can be a New Source of Revenue for Your Company: Make Sure You Know the Critical Steps for Success

Patent monetization includes several critical steps

Patent monetization includes several critical steps

As corporate revenues continue decreasing as a result of consumer and corporation belt-tightening, many businesses now seek to extract revenue from previously untapped areas. One such source experiencing increasing interest is patent monetization, whereby a business licenses or sells its unused or under-utilized patent assets to generate a new revenue stream.

At the surface, patent monetization would effectively appear to be a “no brainer” for business. That is, if one owns an asset that holds little internal value, but to which a third party would ascribe considerable value, why wouldn’t a company move forward with selling that asset? In truth, however, few organizations possess the knowledge base required to succesfully execute on a patent monetization plan. This failure results not because patent monetization requires a complex set of skills; rather, the difficulty typically lies with the organization’s lack of familiarity with the process of patent monetization.

A successful patent monetization process requires a step-wise progression through the four steps set forth in the following diagram. Each of these steps is discussed below.

Step 1: Perform an Objective Internal Patent Audit to Identify Potentially Saleable Assets
The first step to successful execution of a patent monetization plan requires the organization to understand whether its patent portfolio includes any assets that would be of interest for acquisition by a third party. This patent monetization audit objectively matches up the organization’s current and future business strategy with the subject matter covered by its patent portfolio. In short, the audit should reveal those patent assets not in alignment with the organization’s business strategy. The audit will also identify any patent assets that might in use by the organization, but for which it does not find it commercially necessary to exclusively retain rights. These identified assets will then comprise the potential candidates for patent monetization. Continue reading