THE EVOLUTION OF IP STRATEGY

September 21, 2016

HOW IP STRATEGY IS EVOLVING

History of IP Strategy Part 2 (Part 1)

Facilitating the New IP Strategy Mindset

For Part 1 of our series on the History of IP Strategy, the focus was on the historical events that have helped shape the discipline of IP Strategy. IP Strategy was defined as “a field in which practitioners develop actionable operating plans for managing Intellectual Property Assets, to enable businesses to meet their commercial objectives including increasing market share, improving profit margins, deterring competition and ultimately maximising enterprise value and shareholder wealth.”

Beginning in the 90s, a cultural shift started to take shape and the focus on IP evolved from a “create and protect” mindset to a “create, procure, and leverage” one. This is when the practice of aligning IP with broader business objectives to ensure IP portfolios served the greater vision of the organisation made its way onto the agendas of business leaders and occasionally even entered the boardroom.

Part 2 of the History of IP Strategy reflects on the fact that the educational and market evangelism phases of IP strategy are now largely over. Most companies in most significant economies, including their investors and advisors, are aware of IP and recognise that it matters. They have adopted the mindset that IP is important and needs to be thought of strategically, so how does an IP Strategist support this?

Important Skills of an IP Strategist

An IP Strategist has a broad set of commercial skills (to understand the business goals of the client), an ability to get to grips with the market and competitive environment in which the organisation operates, has sufficient technical understanding of the products or services on which the company relies to create revenue, and finally an in-depth knowledge of the different types of Intellectual Property Assets and the specific IPAs of the company and how these can support “improving profit margins, deterring competition and ultimately maximising enterprise value and shareholder wealth”.

In addition, an IP Strategist must grapple with other environmental factors including the significant increase in the rate of patents being filed – which coincides with the global rate of innovation, emergence of major new innovation economies (e.g. China) onto the World scene – with ensuing FTO challenges, the explosion of digital software-based technologies and of course legislative developments including BEPS from the OECD, AIA, the UPC in Europe and finally case law.

History of IP Strategy Timeline of events

History of IP Strategy Timeline of events

Data Mining and Data Analysis Necessary for Developing IP Strategies

The graphic above takes the timeline from Part 1 and adds the USPTO patent filing data for the past 35 years plus the IP analysis software companies that have come to exist within that timeframe. This illustrates the explosion in the size of just the US patent dataset. This is further compounded when you consider the increases in filings in Europe and of course a huge step change in filing in Asia, in particular in China. In Part 1, Moore’s Law is referenced to highlight the impact the rate of innovation has on IP strategy. Just looking at the patent dimension, as more innovation takes place, more patents are being filed, the more patents that are filed, the more data that needs to be studied. Analysing this data provides insights and understanding around a technology’s trajectory, the behaviours of competitors, the rate at which they are innovating and so on. This is an important part of the history of IP strategy because a lot of what an IP strategist does, and the value they bring, revolves around accurate data analysis across a wide range of very large data sources. Compute power, machine learning, AI, cloud based SAAS solutions are all arriving and evolving in sync with the demand for IP strategy as a service.

Mining this massive amount of information requires tools and data analysis skills. It is interesting to note that Rivette, one of the authors of Rembrandts in the Attic was also the founder of Aurigin Systems, Inc., an IP analysis platform he founded in 1992 as SmartPatents, Inc. Not much actually became of Aurigin Systems as a stand-alone business. The company filed for bankruptcy in 2002 and was acquired by Information Holdings, which was then purchased by Thomson Reuters in 2004, creating one of the dominant players in the IP tool space.  Today there are a lot of IP management software tools available (items in green on the timeline represent just a few of them) and the evolution of the cloud has created a market for online platforms and dashboards that are more accessible, cost efficient and easier to use by non-IP professionals.

IP Platforms and the Business and Technical Skills Needed to Use Them

But how do you know what to look for?  Here, the human dimension and experience are needed to frame the business context and questions, and then drive the tools to draw out the responses and conclusions on which business decisions can be made. For example, a company looking to acquire a key piece of technology may use patent searching to find companies active in the field, or those who have the strongest innovative position in the sector. A company may be concerned about IP risk from competitors and wish to benchmark their portfolios to determine the strength of their defensive shield, or cross-licensing fire power.

These platforms are very effective for quantitative analysis, but there is a need for professionals who provide value through qualitative analysis in conjunction with quantitative analysis. They understand how to use these tools, which tools would work best for each situation, have a deep knowledge of data analysis techniques, a strong business acumen to know how to apply the data, and deep technical comprehension to fully understand how the information within the patent data correlates with other datasets (e.g. market, product, financial).

IP strategists know the questions to explore when running reports and they know how to apply the data to make decisions that will have a positive financial impact on the business. For example, in regards to valuing IP, an unbiased qualitative analysis of the IP being evaluated is necessary for effective decision making for all parties involved. The use of valuation methods will involve assumptions requiring an element of expert judgement and the valuation methodology selected will be context sensitive.  That is why IP tools find it so hard to “value” individual patents.

Today, the need for IP Strategy is widely accepted. Companies are embracing this actively, building teams and resources to implement IP Strategies and Operating plans and occasionally looking for external advisors who can provide experiences from a wide range of industry sectors and historical engagements to assist them, or ensure their own approach represents “best practise”.  The tools available to support their work are developing rapidly and “automating” tasks that previously would have required huge manpower and time. Given the ever increasing datasets involved, this development is essential to make the IP Strategy function feasible and effective.

What is the future for IP Strategy?

Looking forward, the rate of innovation, the coming together of players from different industries; automotive and high tech actors in Autonomous Vehicles, and consumer electronics, aviation and flight control actors in the Drone market for example; and the ever evolving tech landscape will require more and more sophisticated IP Strategies to be developed to support new and evolving business models.

On the IP tools side, we see closer collaborations between IP Strategy Service providers with the developers and providers of these SAAS solutions, to ensure their clients maximise their ROI and business outcomes. We also see more of the IP Consulting workflow being embedded and supported within SAAS platforms to ultimately provide an IP toolkit which provides in-depth visibility and control of a company’s Intellectual Property Assets as well as provide real-time reporting and insight into key business questions…but which ones matter will be determined by experienced team members and advisors in their ongoing objective to improve profit margins, deter competition and ultimately maximise enterprise value and shareholder wealth.

 

Learn more about our THE EVOLUTION OF IP STRATEGY service and how it can help your business
Find out more

Get In Touch

We believe your right to privacy is important and are committed to protecting your personal data. You can find about how we process the data you provide in our Privacy Policy