Common Afflictions of University Patent Portfolios

King crumblingA man goes to the doctor for a check up. The doctor suspects diabetes and asks the man to bring a urine sample the next time he visits. The man shows up with quite a large sample, much more than one might think needed for a urine test. Nevertheless the lab technicians do their work and the doctor tells the man at the next appointment that he is fine and he does not have diabetes. The man is very happy and calls his wife from the doctor’s office to give her the good news. “Good news honey, tell the kids and your parents and my cousin, none of us have diabetes!”. Sometimes, in a large sample size it is possible to see things that affect a whole group.

We manage the intellectual property and patent prosecution strategies for innovators ranging from publicly traded companies to universities. It is one of the things that we perfected over decades of generating and managing economically significant patent portfolios. We are the doctors, so to speak. Time to time we look at samples of patents belonging to specific companies, technology classifications, specific verticals, and alike to identify trends. Different patent holders have different patent prosecution habits that sometimes seem to be aligned with the role that the intellectual property plays in their own businesses, and sometimes they are not aligned at all. There are a few things that we notice when we look at the patent portfolios originated from the universities. There is no rule that applies to every single university but there are definitely trends that one can spot quickly.


Trend #1 — Not making use of continuation applications to steer portfolios over time.

Universities tend not to file many continuation applications, and instead let patent applications issue out. When the only patent application in the family issues, the prosecution is closed, and there is no ability to file continuation applications. We see that there aren’t many patent families with open prosecution in the portfolios of universities. This is very significant, and very much counter to the best practices in patent portfolio management.

Generally patents have richer specifications than just what is covered by the initial set of claims. No matter how thoughtfully the initial claims are drafted, it is impossible to predict the full extent of the priori art the examiner relies on and therefore the initial claims in a patent family usually do not survive. Therefore the patent that issues from the first filing may have claims that are less than what the inventor could have claimed. Each specification houses more inventions than what is covered in the first set of claims, and perhaps even more than the second and subsequent claim sets. If the invention has legs, in other words if there is the possibility of an economically significant claim to issue, then the right strategy is to file continuation applications and seek out those claims. It is our experience that a vast majority of patents with valuable claims are those that have resulted from subsequent continuation applications, not the initial application in the family. Universities often do not file continuations and end up leaving money on the table, so to speak, by letting unclaimed inventions to revert to public domain once a patent issues and prosecution closes.

We can speculate that the reason the universities do not file as many continuation applications is because the inventions they patent relate to very early stage research and it is simply very difficult to know what will become economically important down the road. Obviously there is a non-trivial cost of keeping patent prosecution open for every single patent family, and the technology transfer offices operate on tight budgets. It may also be the case that the universities do not consider patent licensing an important goal, at least not as important as showing that they generate a certain number of new patent families per year, and that they keep the faculty happy by filing patent applications on their favorite research topics. After all, university trustees rarely ask their tech transfer offices how many patents they have that read on current products after all. In addition, the tight patent prosecution budgets may mean that every continuation they file reduces the number of new patent families a university can file each year, making some faculty less than thrilled. No matter what the reasons are, universities do not claim all the significant inventions they could.

Assuming this is a problem that the universities themselves would recognize and like to remedy, there are a few things that one might consider. Firstly, not all patent families need to be kept open. There are many inventions where even if a commercial product practices the claims, it would be very difficult to detect it. They would not be the top choice for maintaining open prosecution. Neither are the inventions that can be circumvented easily because they represent an implementation variant without a compelling advantage. These represent ‘one-of-many’ solutions to a problem, and even if a patent is infringed, the infringer simply can adopt a different solution to avoid infringing. This is especially true for software configurable inventions where a simple software upgrade can leave the invention stranded. No need to keep those patent families open either. These days all software inventions are suspect, and they may never have very strong enforcement strength again. Perhaps those are not high priority either. Moreover there are often patents that relate to technologies that are predictably un-scalable. In other words, they will never represent a large economic value even if infringed. These can be difficult to judge, but you know it when you see it. There are also inventions that relate to stop-gap solutions while the industry is working on a more permanent solution. Those inventions will not be on the market for long. So they may not be good candidates for continuation applications either. Summary of it all is that one can limit the number of patent families where prosecution ought to be kept open through continuation applications to say 15%-20% of the portfolio.


Trend #2 — Not enough attention to portfolio pruning as a way of containing cost.

There is a cost associated with filing continuation applications, naturally. If a university is filing continuation applications for some slice of the portfolio, then is there a way to do this without increasing cost? This brings up the second affliction of university patent portfolios. Not pruning.

Universities engage in very early stage research, which is speculative by its nature, and therefore many patent applications are filed on technologies that do not turn out to have significant economic value later on. This is a very good recipe for accumulating patents with little or no value. Even though the research may shift to another direction later and the faculty as well as the industry may move to alternative solutions, the originally filed patent applications live. They not only live, but they continue to cost money in patent prosecution, in staff time, and they become dead weight in the portfolio. Moreover they continue to cost thousands of dollars in needless maintenance fees after issuance. In the industry, many companies that practice thoughtful portfolio strategies prune their portfolios regularly. It is a good practice to know what you have and why you have it. If you can’t say why you have it any more, then you should strongly consider letting the patent go. By regularly pruning the dead weight in their patent portfolios, universities can offset the cost of additional continuation applications, and make room for those continuation applications that will be the money patents eventually. Most universities do not practice this strategy, however.


Trend #3 — Not making use of dispassionate advise from outside parties.

Finally, agency problems may affect the way the universities manage their portfolios, including the selection of patent families for continuation applications as well as for pruning. Technology transfer offices may find it important to keep certain faculty members happy for various reasons, for example. We are all people and we have relationships to maintain and a desire to avoid conflicts when possible. Universities are no different than any other organization. It can help to enlist the help of outside resources, such as experts who understand the best practices in patent portfolio management, to make dispassionate recommendations on the portfolio. It gives technology transfer offices a sanity check on what they already know, and point out things that they don’t know.

It is not possible to make suggestions that can be a prescription for every affliction of the university patent portfolios, but we mentioned some of the trends that are easy to discern and some solutions that are easy to grasp. Ultimately, there is plenty that can be done to assure that a university is getting the most out of its patent portfolio within the limits of its budget. We have recently seen some universities start to monetize their patent portfolios more seriously, and this may be a trend that will continue. If that were the case, it would be a very good investment management strategy for technology transfer offices to revisit their patent prosecution strategies and gauge whether there is room for improvement.


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