We’ve spent a lot of time discussing the many reasons that quality is more important than quantity, outlining various tactics corporations have used to plump their patent portfolios. The many ways that companies may have harmed their patent strategy through mass filings or purchases are varied—but it does beg the question: Is it ever a good thing to file applications for or acquire large numbers of patents?
So far, throughout this series, we’ve established the IBM revolutionized the way corporations monetize their patents by filing for them by the tens of thousands. Of course, we also know that filing and maintaining a single patent family can cost hundreds of thousands of dollars over the life of those patents.
In our last Penny Wise and Pound Foolish article, we investigated corporations that spent years building massive patent portfolios for the purpose of licensing programs. IBM led the way through the nineties, eventually amassing over 22,000 patents within the decade. Of course, with up to $1 billion in revenue each year solely from licensing deals, IBM definitely makes a case for piling up the patents like poker chips.
Unless you’ve been living under a rock, you’ve heard of the latest craze in the world of toys—the fidget spinner, a gadget that looks like a tiny ceiling fan and reportedly alleviates feelings of anxiety or restlessness in its users.
The typical enterprise organization can hold thousands of patents, with dozens added each year. This intellectual property has the power to produce revenue for the company, create barriers to entry for competitors, and mitigate risks from other patent holders. Of course, patents also give the holder a temporary monopoly, during which time they can overtake competitors and gain tremendous market share.
Here’s a newsflash: patents are pretty expensive. Because they are granted on a country by country basis, there are different maintenance and filing fees required by each country in which you’re attempting to obtain a patent. A 2003 study from the United States General Accounting Office reported that the lifetime cost for a small company to file and maintain a patent in the United States (and in 9 other major industrial countries) ranged from US$170,000 to US$340,000 in 2002 Dollars. That’s about $220,000 to $440,000 in 2013 Dollars. It’s also important to note that these figures apply to small companies—which usually pay about half the filing fees that large companies pay.
Product development is an expensive venture. On one side, there are the costs of researching the market and developing the solutions; on the other, there are the costs of protecting those innovations through obtaining patents.
My previous article showed how expensive patents are – from $220,000 to $440,000 to file and maintain a patent in the United States and 9 other major industrial countries. I also discussed one experiment that showed that data driven patent analytics could predict manually determined patent maintenance fee payment decisions over 70% of the time while dramatically reducing the time and cost to conduct the manual review. In this current article I describe best practice Patent Maintenance Fee Payment Decision Processes.
IPVision has worked with many companies to implement evidence-based data driven processes for the cost-effective evaluation and management of patents. The specific processes that are adopted differ somewhat in the details because companies differ in their culture and structure and because of their differing industry technology and competitive environments.
Although the specific processes differ there are core components in each of these programs. The following is a step-by-step compendium of the best practices I have seen.