An Introduction to Patent Monetization Resources For Corporations and Entrepreneurs

For corporations and entrepreneurs seeking to monetize their un- or under-utilized IP rights for the first time, it can be difficult to know where to begin. The patent monetization market is not yet mature and, as with other emerging marketplaces, no established methodologies and few experts exist to guide owners through the process. Today, there are as many as 17 different business models used. More will likely spring up as the market continues to evolve, even while some of the current models will certainly fall away. With such a range of options, it is not surprising that those seeking to sell their patent rights may be confused about what path to take. This article is intended to provide an overview of ways that corporate and individual IP owners can most effectively monetize their rights in today's market. The models discussed in this article were chosen because they are currently the most common. Significantly, due to the great variability in patents and the individual needs of IP owners, the best model for a particular person or organization might actually one that is not discussed here.  Nonetheless, it is hoped that after reading this, a corporation or entrepreneur seeking to sell their rights for the first time will be better able to understand and execute on the opportunities and challenges present today in the patent monetization market.

Thinking of Selling a Patent Directly to a Corporation Without an Intermediary? Forget About It Most IP owners assume that it is possible to sell their rights directly to a company that might play or seek to play in the product or technology space covered by the patent. This is rarely the case, however. When I was employed as a senior attorney in a consumer products company, it was corporate policy to reject all unsolicited offers to purchase or license patents that came into the organization. Thus, an owner did not stand a chance to get their rights sold to my company. This absolute prohibition on unsolicited ideas is not the policy at all companies, but, in truth, few companies today actively seek to acquire products and technology from outside sources (although this is starting to change with the drive toward open innovation at many companies). Thus, even if a patent is a perfect fit for a company's offerings, most organizations will nonetheless prefer to pass on a purchase opportunity because external acquisition is not part of their technology development model. It is therefore doubtful that most patent owners can hope to successfully sell their rights directly to a corporation because the latter is not in the business of buying patents generally, and specifically not from individual owners.

  Aggregators: Buyers of Patents if a Patent Owner Can Get a Foot in Their Door In recent years, companies have emerged that hold business models centered on the buying of patents held by others. Well known aggregators today include Intellectual Ventures, RPX and Allied Security Trust. Each of these companies has a different reason that it seeks to acquire patents, but each can serve as a great resource for owners seeking to sell their IP rights in certain technology areas. Nonetheless, there are many more patent owners seeking to sell their rights than existing aggregator buying opportunities. As a result, if an owner obtains a "no" answer, how does he know it is because his patent is worth nothing to the aggregator or whether it's because he did not know the right person to get his rights in front of at the aggregator company? For most IP owners, especially those participating in the monetization market for the first time, patent aggregators will not serve as a likely direct purchaser of their rights.  

Brokers: Facilitors of Patent Sales, For a Price Brokers such as ThinkFire, IPotential and IP Transactions Group can assist IP owners in presenting their patent to a likely buyer, the most likely of which are patent aggregators, non-practicing entities ("NPE's") and, sometimes, corporations. By leveraging their relationships and reputations, brokers effectively serve as "filters" for potential patent acquirers to streamline and improve the quality of patent buying opportunities.  Put simply, patent buyers trust their patent brokers to "separate the wheat from the chaff" to make it easier for them to identify and act on good patent buying opportunities.  A broker who is trusted by a patent buyer can thus present the latter with a buying opportunity that the buyer would not have given a second glance to if the same patent had been offered to them outside of the broker-buyer relationship.   There is a substantial cost to hiring a broker, however--typically about 25 % of the total sale price. Patent brokers also require exclusivity. Thus, when a patent owner selects a particular broker to represent him in the sale, he must trust that the broker will find the best deal. I nonetheless believe that the knowledge and expertise available with a good broker can allow a patent owner to obtain a final purchase price for his rights that more than justifies the broker fee. In particular, the best brokers maintain a large network of potential purchasers of patents, including aggregators, NPE's and, in some cases, corporations that have expressed an interest in buying third party IP rights.  

I believe such broad networks serve a critical function in improving the efficiency of the monetization market by possibly raising the final purchase price.  When a patent is offered through a quality broker, he will ensure that each party participating in the process also knows who else is being offered the opportunity. Such transparency could also result in an increase in the final purchase price when one potential purchaser seeks to ensure that another potential purchaser not acquire that same right. For example, a corporation might increase its offer to prevent an NPE from obtaining that patent for the purpose of bringing suit against the corporation. This scenario means that those most interested in acquiring the patent will bring their best offer to the table, a fact which should improve the final price paid.   A further benefit of selling through a good broker is that they will typically conduct market analysis of the rights to set a rationally-based entry level price. Specifically, the broker will set the price based upon what comparable patents have been sold for in the past. These figures normally are not public, so a broker with several sales under his belt will likely set a more accurate initial sale price by virtue of the fact that he is privy to information that allows him to do so. Notably, even an experienced broker might incorrectly estimate the likely floor price, but when the patent is offered to many likely buyers, the market will typically act to reset the price to one more acceptable to potential buyers.    

Beware of Finders Who Say They are Brokers A significant problem with many people who hold themselves out as patent brokers is that some are not "brokers" at all. Rather, they are "finders" for aggregators or other buyers of patents such as NPE's (but likely not corporations). Like regular brokers, these finders maintain relationships with likely buyers. When accepting a patent for sale to a potential buyer, the finder likely already knows whether it will be purchased by its contact. In this scenario, the finder actually does little to earn his 25% fee other than maintain a relationship with the ultimate purchaser. Moreover, many of these brokers actually "double dip" because they obtain a fee from the purchaser for bringing the opportunity to them, as opposed to another potential buyer. The finder thus might hold divided loyalties: should they try to maximize the price obtained for his client's patent when they might never see an opportunity from that seller again, or should they keep the price reasonable so they don't ruin their relationship with their buyer to whom they might bring several buying opportunities to each year?   Clearly, this scenario is rife with questionable ethics, but the reality of the current monetization market is that no licensing is required for someone to call himself a "patent broker," and the rule is definitely "buyer beware." As things stand in today's unregulated broker market, the best way to find a quality patent broker is to seek referrals from someone who understands the market and/or who has successfully sold patents through a broker in the past.   

Patent Auctions: Selling in the Open to the Highest Bidder The final common vehicle for selling patent rights is the public auction setting. Today, the most prevalent auction is conducted by Ocean Tomo, which currently holds 2 auctions each year. Ocean Tomo is very selective about what patents it takes into each auction, a fact that limits the ability of many patent owners to participate in this model. Ocean Tomo obtains a fee from the seller and the buyer, and it is my understanding that the net fee amounts to approximately 25 % paid to the auction house. While I have not personally been involved in an auction, I have heard mixed things from people who have participated as both buyers and sellers in these auctions. My sense is that an auction allows one to sell his patent in a transparent setting where the price is set by competitive bidding. This can be good when a patent is desired by multiple parties who are influenceable by the "heat" of a public auction process to increase their bids to result in a higher price for the seller.   In my view, one downside of the open auction process is that all participants know the price being offered, a fact that can lead to a lower final sale price if a patent does not garner excitement from the participants. This view was borne out in the most recent (April 2009) Ocean Tomo auction which was almost universally considered a failure. Buyers were lacking and, as a result, not only did few patents sell, the tenor of the auction itself was said to be very quiet and unexcited. This lack of enthusiasm from the auction participants no doubt reduced the overall success of the auction itself.   In contrast, in a private auction--such as that effectively set up when a quality broker sells a patent into a large network of potential buyers--the lack of transparency can result in a higher final price because the participants know who has been provided the opportunity to purchase but not the amount they have offered (if at all). A further possible downside to a public auction is that one can only sell his patent to someone who shows up to participate in the auction. With a broker-conducted private auction, however, someone who may not actively be seeking to buy a patent at that time will be presented with the opportunity to buy. Thus, the number of potential buyers can be expanded with the use of a broker.  

It's as Clear as Mud Now, Right? As noted at the outset of this article, the IP monetization market is only just now emerging as a viable way to obtain value from un- or under-utilized assets. In view of this, most patent owners just starting into will be confused about how to proceed in a manner that maximizes the price obtained. If one owns patent rights and seeks to sell them today, it is my recommendation that he learn as much as possible about the process. And, as with many business situations, checking references and seeking recommendations from those with experience as patent sellers and counselors to IP owners will be critical to success in monetization.  Personally, I am looking forward to the day when more openness exists in the marketplace so that patent owners can better gauge the quality and qualifications of those participants in the process.               

The problem with Patent Due Diligence in Mergers & Acquisitions, and how fixed

Such as employment or investment in mergers and acquisitions (M & A "), perform due diligence on patents, according to standard procedures of the M & A attorneys and investment bankers? If patents are an important aspect of the transaction value, probably" Get Re incorrect advice, as exercise due diligence. The due diligence is taken into account, the competitive landscape of the patent. If the patents are not competitivein the evaluation, the target company can be overestimated significantly.

For many years of experience in intellectual property and patents have been involved in a number of M & A, in which the patent was an important part of the underlying transaction. As a specialist patent for these steps, I was paid to M & A attorneys and investment bankers who were from the C-level management are recognized "trueExperts "because they have completed dozens of transactions per year. To this end, we have specialists in the field of patents have been directed to the following patent check boxes 4" due diligence checklist:

Patents are granted by the Patent Office?
If the seller has its own patents?
Make at least some of the claims relate to products of the seller?
Counsel for the seller to make silly mistakes that the patent difficult to sue for patent law before the court to make, would?

If these fields were marked"Complete" on the checklist of due diligence, M & A attorneys and investment bankers were in fact "CYA'd" patent issues and are free from liability for patent in the transaction.

I have no doubt that I have my homework due diligence done competently patent, and that I had "CYA'd" me into this business. However, it is clear that correspond to the granting of patents for M & A Due Diligence, in essence, an idea of how to do something stupida transaction patent. In truth, I do not trust myself with the bridge "feel for a patent due diligence, but I have no decision making powers at odds with the standard operating procedures for M & A experts. And I discovered that it is incomplete, the standard patent due diligence process was when I left, to the shards of a transaction under the M & A conventional method.

This is my client, one of the largest producers and tried toexpand the supply of non-commodity for the acquisition of "Clean Care, a small manufacturer of a patented product for the consumer. CleanCare My client turned out to be a good target for acquisition because the product meets CleanCare strong consumer demand, and ordered this time, he for a higher price in the market. With the acceptance by consumers for its unique product has been CleanCare continue to experience exceptional growth in sales and growth. However CleanCare had only one production for smalland was difficult to meet growing market needs. Clean Care in venture capital investors are also eager to cash after several years of continued funding for the operation in a small margin "of society. The wedding of my client and then CleanCare seemed a good match, and the M & A due diligence process has begun.

Clean Care due diligence had revealed that few possessions: a plant for the production of small, limited, but growing, sale and distribution of several patentson CleanCare unique product. Despite these activities, seemingly small, CleanCare asking price up from 150 million U.S. dollars. This price could only mean one thing: the value of Clean Care is only in the potential growth of sales of its patented product available. In this scenario, the exclusive product Clean Care is seen as fundamental for the purchase. That is, if someone could knock off CleanCare prevail differentiated products, and competition would be LLParis is the holding company for growth and revenue forecasts to drive the basis of financial models made the purchase.

Take my statements of M & A lawyer and head of investment banking in the operation I took aspects of the patent on the process of due diligence in accordance with normal procedures. All check-out. Clean Care possession of patents and had always paid the taxes. Clean Care patent had good work on patents: do size CleanCarewas protected by patents, and it is not obvious legal errors made in obtaining patents. So I gave the transaction a thumbs up in the form of patents. Although everything seemed to be positive, my client has the proud owner of Clean Care and products.

Fast forward several months. . . . I started receiving calls from visitors, the marketing team of my client based Clean Care product with competing products that have been observed on Earth. GivenMore than 150 million U.S. dollars were not spent for the acquisition CleanCare surprising that these marketing experts believe that competitive products will be infringing on patents Clean Care. However, I discovered that each of these products has been patented in a design competition, the legitimate product placement Clean Care. Since these knock-offs are not illegal, my client had no means to hit them from the market for competitors to take legal action.

Following thisincreasing competition for the product CleanCare began to occur in prices. To erode the financial projections, which began as a basis for the purchase of my clients Clean Care. The product sells CleanCare still strong, but should not interfere with this unexpected competition, the margins charged my client and investment CleanCare much longer and more costly marketing. In short, so far seems to be the acquisition of 150 million U.S. dollars CleanCare into a fiasco.

InIn hindsight, the competition was expected to be the product CleanCare during the M & A Due Diligence. As we later would appear a literature search on patents, that there are many different approaches to consumers confronted by the product of Clean Care. Clean Care of success on the market now seems to be due to the advantage of offering the first, in contrast to the real economic and technological advantages that the product will be.

If I knew what I know now, Ido not recommend that sell the product expectations Clean Care at a higher price because of market exclusivity. Instead, I want available to the team of M & A of the competition in product markets CleanCare was and show in fact, very likely, as we found a variety of solutions for the same problem mentioned in the patent literature. This can still happen, but I think the fact that the financial models driving the acquisition would be based. AsTherefore, my client has a marketing plan, based on the insight that competition is not only possible but expected to be developed. The marketing plan was then the offense than on defense. And I know that my client did not expect that on the defensive after more than 150 million U.S. dollars, for the acquisition Clean Care.

What you pay for this patent? How Patent Counsel Hiring is as VP Wardrobe Checkout

The recent outcry about Sarah Palin "gold plated" wardrobe from Saks and Neiman Marcus made me think of how many companies choose the company of patent law. This may seem a non sequitur, but bear with me ...

Those responsible for the preparation of Governor Palin seem to believe that the cost of compliance at Neiman Marcus and Saks automatically translated into the value for the Republicans, which allows more than "Vice President" what would otherwise have beenconsidered. Despite the high cost of his new cabinet, the report by the New York Times, the whole "look" remains the same as when she served for the campaign and as governor of Alaska Business Jackets cases feminine skirts and high heels. The answer to this Cabinet attracted makeover from a leading fashion commentator: "Honey, I could have for much less." From this comment, as the game goes on the cost, it appears that spending on Gov.Wardrobe Palin is not directly related to the value provided for the McCain-Palin presidential ticket.

N uneven, when I think review patent portfolios for clients of valuation and strategic analysis, I often to myself, "what you paid for this patent? Too often, professionals otherwise engage effectively smart" magical thinking to assume "that the take action to make money in a company with the patent to create value mean premium for the company. Of course, thisProfessionals who do not believe that simply run into the value of money in other areas of their business. So, why in the field of patents?

I believe that the information costs associated with screening and selection of legal services related to patents, it is difficult for busy professionals make informed decisions regarding their company patents. Without legal training or experience in the business of substantive patent law, the vast majority ofEntrepreneurs think that they probably will not be able to policy decisions leading to the patent portfolio of their company. You can not make rational decisions, a cost-effective implementation, but excellent otherwise, to the firm of patent attorneys on their patent work. Otherwise, all other means of selecting a consultant, it is assumed that the value of the company will intensify if they hire the equivalent of the patent law firm Neiman Marcus and Saks, even if they could getthe "patent" look a lot cheaper than in corporate law.

Fortunately, there is a solution to the problem of information law office patent costs. The emerging specialty of intellectual property (IP) strategy, business professionals provide the necessary information about the study and the most appropriate cost model to select the patent counsel. IP business strategist can be effective as a corporate professional "personal shopper" in the selection of the Councils of the patent functionand to support the management of the legal costs of patents. In this role, the business IP strategist can obtain the patent right "look" for a company to know where in legal services shop.

This does not mean that the company IP strategists never Neiman Marcus or Saks equivalent of a company would choose patent law. Certainly there are situations in which justifies the costs of patenting such a society, because in a so-called 'betting the company "invention or disputes. However, as a "personalShopper "for patents, an IP business strategist makes it a professional, an informed decision about the adequacy of these higher costs.

In addition, the business strategy of the investigation is also connected to the margins of patent law and as such will be better able to negotiate a discount in the Registry. In other words, the patent of "personal shopper" is a professional for Neiman Marcus and Saks to help sell quality at a price "." AndLove, get a quality product to a discount?

A "personal shopper" for patents do not necessarily lead to lower costs for companies, but I can almost guarantee that the quality and value is total patent-growing portfolio. Moreover, it is very likely that the cost savings made possible through the commitment of a company with a business strategy, intellectual property will cover the cost of hiring such a specialist. As firms increasingly realize that the cost was not legally bindingValue of patents, intellectual property rights of the most strategic enterprises will be seen as a useful means to improve the type and manner of the patent legal services.

The Problem With Patent Due Diligence in Mergers and Acquisitions and How to Fix It

As a business or investment professional in mergers and acquisitions (M & A "), you will be conducting patent due diligence in accordance with the standard procedures of your M & A attorneys and investment bankers? If the patents are an important aspect of the value of the transaction, you are probably always wrong advice about how to perform the due diligence. The due diligence is taken into account, the competitive position of patent landscape. When competition are patents that are not inTheir release process, you can significantly overestimate the target company.

In my many years of intellectual property and patent experience, I was involved in a number of M & A transactions involving patents constituted a significant portion of the underlying value of the transaction. Since the patent specialist for these transactions, I have very balanced direction of M & A attorneys and investment bankers, those of recognized C-level management as the "real experts" because theycompleted dozens of transactions per year. To this end, we were patent specialists advised to check the following 4 fields on the patent due diligence checklist:

If the patents granted in the Patent Office?
If the seller actually owns the patents?
At least some of the claims include the vendor's products?
If the seller a patent attorney to make no stupid mistakes that are difficult to enforce the patents in court would be?

If these fields have been associated with "complete" to the bottomDiligence checklist, the M & A attorneys and investment bankers had indeed "CYA'd" the patent issues, and were free from liability in relation to patents in the transaction.

I have no doubt that I carried out my patent due diligence very competent and I also had "CYA'd" me into this business. However, it is now clear that the patent represented aspect of M & A Due Diligence is why the idea of someone of how stupid mistake to make a transaction inPatents. In truth, I never felt entirely comfortable with the "fly-over" feeling of patent due diligence, but I have no decision making powers in conflict with the Standard Operating Procedures of the M & A experts. And I found out how incomplete is the standard patent due diligence process, when I left, to place the pieces of a transaction according to the standard M & A process.

Tries in this business, my client, a large manufacturer to expand its non-commodity productOffering through the acquisition of "CleanCo", a small manufacturer of a patented consumer products. My client found CleanCo met a good target for acquisition because CleanCo have a strong consumer and product range, then under the command a premium price on the market. Because of the strong consumer acceptance for its single product CleanCo has been experiencing tremendous growth in revenues and growth is expected to continue. CleanCo but owned only a small factory and it was having difficulty inthe growing demands of the market. CleanCo venture capital investors went to cash out also for further funding after several years of somewhat marginal activities of the company. The marriage of my customers and CleanCo therefore seemed a good game, and got the M & A due diligence process in motion.

Due diligence revealed that CleanCo few assets: the small production was limited, but growing sales and several patents, the only CleanCo product.Despite this seemingly low assets, was CleanCo asking price upwards of $ 150 million. This price could only mean one thing: CleanCo value was only the potential for sales growth of its patented product. In this scenario, the exclusivity of CleanCo product has been correctly understood to be of fundamental importance for the purchase. That is to say, if someone could knock-off CleanCo differentiated product that would lead to competition and the bets would then ll always be the path to growthRevenues and projections, which form the basis of financial models driving the acquisition formed.

Under my guidance from the M & A lawyer and investment banker leaders in the transaction, I have the patent aspects of the due diligence process in accordance with their customary procedures. Everything checked out. CleanCo owned the patents and had paid the fees forever. CleanCo's patent attorney had done a good job on the patents: The CleanCo product was protected by patents, and ithad produced no manifest error of law in obtaining the patents. So, I have the transaction the thumbs up from the patent perspective. If everything looked positive, my client has been the proud owner of CleanCo and product.

Fast forward several months. . . . I began to get frequent calls from people on the marketing of my client's team on CleanCo product to competitive products, were seen in the field is concentrated. Given the fact that it was more than 150 million U.S. dollars spent on theCleanCo acquisition, not surprisingly, these marketing experts believe that the products must be competitive against the CleanCo patents. However, I found that each of these competitive products was a legitimate design to CleanCo of the patented product. Since these knock-offs were not illegal, my client had no chance of these competitive products from the market with legal action.

As a result of increasing competition for the CleanCo product, priceerosion began to occur. The financial projections that formed the basis of my client's acquisition of CleanCo began to break down. The CleanCo product still sells strongly, but with this unanticipated competition, my client's expected margins are not being made and its investment in CleanCo will take much more time and expensive marketing to pay off. In short, to date, the $150 Million acquisition of CleanCo looks to be a bust.

In hindsight, the competition for the CleanCo product could were expected during the M & A due diligence process. As we learned later, would a search for the patent literature has shown that there were many other ways to address the consumer need, addressed by the CleanCo product. CleanCo success in the market is now due to first-mover advantage, as to any actual technological or cost advantage opposition for the product.

If I knew then what I know now, I would have strongly counseled against the expectation thatCleanCo the product would command a premium price because of market exclusivity. Rather, I want to show the M & A team that competition is possible in the CleanCo product shown and with high probability, as shown by the variety of solutions for the same problem in the patent literature. The deal may still go through, but I believe that the financial models driving the acquisition would be more reality based. As a result, my client, a marketing plan could have been formulatedgrounded in an understanding that competition is not only possible but also likely. The marketing plan then it would have been on the offensive, rather than on the defense. And I know that my client does not expect the defense, after more than 150 million U.S. dollars will be on the acquisition CleanCo.

Costly Patent Lesson - It's Not Enough to Protect the Invention, the Innovation Must Also Be Patente

An SVP at a major consumer goods companies have recently expressed their frustration about the fact that he can not bring a patent infringement suit, even though his company holds 18 patents in the U.S. (and many other foreign patents) to a product that is very similar to the competitor's product. His anger is exacerbated because his company spent several years developing the product and technology protected by patents. His company was also introducing several $ MM of the product, which is a failure. The Companyremoves the product from the market after several months, but many patents in the portfolio today, and is still maintained at considerable cost. I estimate that the patent protection for this product does not cost as much as $ 500K for worldwide patent protection.

Significantly, the product did not fail the quality or performance problems. Rather, it was because they over-engineered and used lots of expensive ingredients, a fact that the plastic product made too expensivefor the target consumer market. Competitors knock-off product was successful because they have removed much of the cost of the product using less expensive ingredients, while still being able to keep aspects of his performance is desirable. Of course, if the SVP company's competitors with a roadmap for product development: Consumers want the product, but not to the higher costs. Away with much of the cost of the product with the reformulation of the plasticComposition, consumers have clamored for the product. The rival to the road to success was therefore both cheaper and less risky to significantly improve the ROI of their product development.

So why not the SVP, when the competitors go through an action against one or more of the charged 18 U.S. patents for the company so expensive? Quite simply, they cover the patents, the invention is not innovation. The difference is subtle but critical. The invention has focused on the composition of the plastic --the product, that is, how much of each ingredient was present and how this composition is manifested in the finished product. In contrast, centered on the innovation performance of the product, regardless of the plastic compound. The product has to be innovative (and desirable to the consumer), because they performed in a way no other product ever. If the competitor has the same performance from a much lower price composition of extract, the product is not surprising to learnMarket acceptance.

Unfortunately for businesses, the SVP, his 18 U.S. patents have failed, this superior performance attributes, the competitor's product levels closely address. The innovator of the product, ie, the SVP company thus has no legal recourse against the company, which now benefits from innovation. What the problem is the fact that significant costs incurred for the protection of patents received, that ultimately worthless company to protect the SVPMarket.

The reason for this situation is clear: the 18 U.S. patents have been prepared in a R & D / patent attorney "Shiloh," where the "cool factor" was as the attributes of plastic composition, not the properties of the final product. In such a science-focused world, the composition as an important feature, seen on the patent protection of gravity. (And it is clear, find the R & D and patent-silo composition innovative enough to 18 U.S. patents for each and receiveany aspect of the composition.) But as far as consumers are concerned, has the composition does not matter a bit. Thus, competitors can now copy the performance because the patents do not do to what is, in fact, the critical function of the commercial product.

Unfortunately, the patents could have covered the performance of the product. This product was truly innovative. However, the people who were on the performance of the product and its value for the consumer of the divorcedPatenting. As a result, the SVP was undertaking several $ MM of stranded costs is now a failed launch. His company is now losing market share in neighboring products because the product of the competitor gaining in popularity, a fact that compounds the pain caused by failure of the product.

After hearing my explanation for his frustration, the SVP wondered aloud, how to learn from this costly lesson patent. I told him that the answer was simple: it must dismantle the patentabilityShiloh, where his patent agents work only with its R & D team. Instead, his management of his company's patents must drive by the primary decision-making rights to patent applications, which his company, which cover these files and applications. No patent applications should be submitted if the economically relevant characteristics of the product can also be protected. In addition, prior to the submission of applications, the company should lead design team around exercises in which they ask: "IfThis product will be successful on the market, like our competitors try to do us? "The answers to this question is probably the view of the invention, which may allow greater protection to stretch, to be preserved. Such extensive protection is becoming increasingly difficult to do for a competitor to their products without incurring liability to patent infringement liability.

Of course, not all new products have truly innovative performance attributes that can serve as a basis for broadPatent protection. But if you are not against the patenting of procedures with the commercial aspect of the product as a priority for protection, it can be virtually guaranteed that the resulting patent may be too narrow, preventing competitive knock-offs. And, as my friend discovered SVP, once the patents are filed, the "damage had been done." When his company owned a business-oriented patenting, how to focus an R & D Unlike patents, they might have preventedThe competitors from some of their businesses today designed to start with the marketing of its product roadmap is not the company.

You Paid What For That Patent? How Patent Counsel Hiring is Like the VP Wardrobe Buying Process

The recent outcry about Sarah Palin's gold "wardrobe from Saks and Neiman Marcus has got me thinking about how patent law firms choose many companies. This may seem like a non-sequitur, but bear with me ...

Those responsible for dressing Gov. Palin apparently believed that the big spending at Neiman Marcus and Saks automatically translated into the value for the Republicans by far than his "vice president" than they would otherwise have beenconsidered. Despite the still high cost for their new wardrobe, as in the New York Times, her overall "look", reported the same as if they served for the campaign and as governor of Alaska: Business-appropriate jackets, feminine skirts and high heels . The answer to this wardrobe makeover from a major fashion commentator: "Honey, I would have dressed you for a lot less than, dass" From this comment, and the continuing backlash over the cost, it seems that the cost of Gov.Palin's wardrobe is not directly correlated with the value provided for the McCain-Palin presidential ticket.

Not unlike when I review patent portfolios for clients for evaluation and strategic analysis, I often think to myself, "what you paid for this patent?" All too often, otherwise smart business people actually exercise, "magical thinking" by the assumption that the act of bringing the money at a high-end patent law firm in the creation of business benefits. Of course, thissame professionals would not believe that the mere act is the output value of money in the lead in other areas of their business. Why do they do this in the patent field?

I believe that the information costs associated with the examination of patent applications and the selection of legal services, making it difficult for busy business people to make informed decisions in patent their business affairs. Without legal training or significant business experience in patent matters, the vast majority ofManaging probably do not think that may be directing the strategic decisions about their patent portfolio. Therefore, they can not rationally make the decision for a low-cost identification, but otherwise excellent, patent law firm to work on their patent issues. For lack of other means to consult with those who choose, they assume that business value is increased if they can rent intellectual property law firm equivalent of Neiman Marcus and Saks, even if they could have wonthe same patent "look" by setting a much less expensive office.

Fortunately, there is a solution to the patent law firm information cost problem. The emerging specialty of intellectual property ( "IP") business strategists can do business to provide professionals with the information necessary to cost-educated and appropriate selection of patent counsel. An IP business strategist can effectively his duties as a business professional's "personal shopper" in the selection Patent Counseland assisting in the management of patent litigation. In this role, the counterparty will receive the correct IP strategist patent "look" for a company may, by order to know where to shop for legal services.

This is not to say that the business IP strategist would never select the Saks or Neiman Marcus equivalent of a patent law firm. Situations certainly exist where the cost of such a patent law firm would be justified, as in a bet known as "the Company" invention or litigation. However, as a "personalShopper "for patents, an IP business strategist allows a business man, an informed decision about the appropriateness of such higher costs.

Also, the IP business strategist understands the profit margins associated with patent law firms and as such will be better able to negotiate a discount in the Registry. This means that the patent "personal shopper" is a business man at Neiman Marcus and Saks to help maintain quality to a "purchase price." And who does notLove on a high quality product obtained at a discount?

A "personal shopper" for patents will not necessarily lead in reducing the cost of a company, but I can almost guarantee that enhance the quality and value of patent portfolios. Moreover, it is very likely that the cost savings are enabled through the use of a company from an IP Business Strategist to cover the cost of hiring these specialists. As more and more companies become aware that legal costs can not be equated necessarily withPatent value, the more IP business strategist receives as a useful tool to be seen to improve the way a patent legal services.

Confessions of Reluctant Convert to Electronic Patent Management Systems - I Am Now a True Believer

For many years trying provider of office automation systems, considerable efforts to convince, to save corporate law firm and patent attorneys to paperless file management systems, by touting the time and money with electronic files over the traditional file system-related patents issued. However, relatively few patent attorneys who have done, but the loyalty to the traditional three-sided patent manila file folder. Until recently I was one of patent attorneys. Now that Ihas the great efficiency gains and improvements can be discovered with these electronic systems is the question of why I remained faithful to the clearly outdated system of maintaining client records for patent applications. Given the remarkable efficiency and knowledge management improvements are possible with electronic patent file management systems, there can be no viable excuse for not introducing both companies or law firm patent attorneys on such systems. In retrospect, I think found that the weight andHistory, represented by the partially filled patent file folder where a sense of current performance, even if I deny a further trivial rejection of a patent examiner. The need for a clear sign of my efforts to prevail over the back pain that I caused in the exercise of several patent applications files that work on outside the office. However, after they confronted head-on, with the bureaucratic inefficiency of the traditional paper-patent file management systems, now I am aConversion to the undeniable benefits of electronic patent file systems.

Simply put, because the remarkable efficiency and knowledge management can be improved with electronic patent file management systems, it does not introduce any excuse for either viable company or law firm patent attorneys on such systems. When in the best light, patent lawyers who adopt an electronic system to decrease their customers and are viewed themselves a disservice. Viewed in the harshest light,These lawyers are unintentionally deceive their customers innovative methods to improve patent quality legal service while reducing costs.

My Awakening

My awakening came to the value of the patent electronic file management systems recently while leading a team of experts in patenting an Intellectual Asset Management (IAM) vendor of enterprise software. For this project, my team, a detailed comparison between a fully implementedpatent electronic file management system and a traditional paper-based system. Bound by the assignment of times to each of the administrative processes in eleven common tasks of patent applications, we discovered that the use of an electronic patent file management system significantly reduces the amount of administrative time. In particular, (the amount of management time as a substantive legal efforts against) was required for each task is reduced by about 60 percent to 85 percent,dependent on the prosecution case. These administrative tasks represent features such as dragging and moving files from office to office, copy, retrieving and storing documents in the Department computer databases, and inefficient communication between in-house staff and external consultants. Adoption of an electronic patent file management system can save anywhere from $ 150K to $ 220K per year.

Our analysis shows that for a fully staffed corporate patent department (egdocket clerk, paralegal and lawyers) that approximately fifty patent applications files and uses an external consultant for patent preparation and prosecution, the adoption of an electronic patent file management system can save anywhere from $ 150K to $ 220K per year (see Appendix). For a fully staffed corporate patent department submitting a similar number of patents, patent applications but the handles matters primarily in the house are the cost savings of $ 50 to $ 75K per year. Because the tasks are eliminatedby an electronic patent file management system of repetition and routine, these savings are fully scalable so that companies with higher or lower levels of submission.

Further cost savings will also follow from the adoption of a company's patent department of an electronic patent file management system, because increased slightly with the relevant documents at hand in an electronic form a significant efficiency in communication between staff and patent their internal business customers over patent issues .While employed as a Senior IP lawyer at a multinational corporation, I held regular meetings with my company, patent and R & D teams. To collect and provide the necessary information for the teams to make informed decisions that a paralegal and administrative staff had made considerable efforts to spend the copying, sorting and binding relevant patent documentation. In addition, because the information in the thick binder remained static, while the relevant field of patentsnot, these binders was once obsolete finished the regular meetings. The binder, therefore, required to be rebuilt from scratch for each session. Multiply these efforts for several companies, each with frequently changing patent applications, and you can see just how much work needed to my business and R & D team will keep you abreast of their patent portfolios. Had the administration of my corporate IP legal department in an electronic file patent management system, numerous investmentParalegal hours (and would have been tons) of paper, by using the same information to business my organization, the team for verifying stored on their laptops. With an electronic system could, our department personnel have avoided copying the repeated drawing of patent files to relevant documents and prepare a binder. The time-consuming nature of patent preparation committee alone would have justified the adoption of an electronic system for the management of records.

Information to the right peopleat the right time

Another, perhaps immeasurable benefit from electronic patent file management arises from the greatly improved access to valuable corporate asset patent information.

With traditional paper patent file management systems, patents essential to monitor staff access to patent information. The business with major interests in a company's patent issues, that is, enterprises and R & D teams - first ask the staff for their patent right to access suchInformation. For the organizations in which the patents are recognized as valuable corporate assets, is the requirement to have as your bank to ask for your balance. For those responsible for the management of enterprise resources, limited access to information is not acceptable.

No More gatekeeper

If a company views its patent portfolio as an asset, must be those responsible for the management of a company be able to quickly provide relevant information.An electronic patent file accessManagement system is a critical component for the managers to better identify and protect their intellectual property. If a company views its patent portfolio as an asset (such as on legal instruments against) those responsible for the management of these assets must have ready access to relevant information. In traditional paper-based systems, patent applications, patents, employees serve as guardians of the information for the entire group. With an electronic patent file management system, with anNeed-to-know may be granted access to information relating to a patent as required. This reduces the workload of staff and improve patent commitment of others in the organization with the patent process.

Managing the cost of the transition

Given the large cost savings, increased efficiency and significantly improve corporate knowledge management possible with the adoption of an electronic patent file management system, there would be little reason forCorporate patent departments receive the traditional method of management of patent documentation. Of course, the task of the active scanning patent files can be daunting in electronic form. But there are ways to minimize the entry-level costs. First, technology makes it easier than ever to go paperless. Most organizations already file patent applications and other patent documents electronically. This means that the majority of patent documents in electronic form and need not beindividually scanned into an electronic file. In the next few months, the U.S. Patent Office will be introducing an electronic reporting Office actions that are followed at a later stage of the electronic reporting system for the other official documents. The effective elimination of paper from communications to and from the U.S. Patent Office today, it is easily removed for future-oriented companies to patent paper-based file management systems. In combination with modern document management systems is generally inPlace where corporate and law firm settings are implemented, most organizations in a position to the electronic file patent management systems today, at a reasonable price and with minimal effort. To further reduce the entry-level costs, legal manager, you can choose only pending applications for entry into a new electronic patent file management system. Of course, should be re-docketed matters shall also be made fully electronic from the start. Issued cases may be added later with the system when time andTo provide resources. As an approach to the introduction of an electronic patent file management system can minimize the cost of conversion from a paper-based file management system to a purely electronic patent management system.

The role of external consultants

Outside Council saves money through electronic communication with customers, and there is no excuse for them to those savings on their clients.Corporate patent managers should expect their outside passCouncil to be ready to provide them with electronic patent-related communications on a low or no cost basis. Corporate patent managers should also be prepared to discuss with their outside counsel, where the inefficiencies of office and communication processes can be removed to reduce the overall patent procurement costs. If an external consultant, a customer wants additional fees for electronic communication fee should the customer take security seriously consider new patent counsel, which is morewilling to adopt innovative solutions. Outside Council saves money through electronic communication with customers, and there is no excuse for them to pass on those savings to their customers.

It's Time for All-IP Departments to adopt an electronic IP Management System

Although we represent technology savvy companies, patent attorneys are often somewhat resistant to change. This conservative nature may explain why until now the transition to electronic patent fileManagement systems are only slowly. With the remarkable efficiency and improvements over conventional paper-file patent management systems more and more clear, but there is no reason not to patent attorneys to electronic patent application file management system to accept today.