What is the future of IP management for law firms?

Historically, IP management was labor intensive and required the manual focus and attention of IP professionals around the world. However with the explosive increase of IP data and changes in patent systems and laws, IP professionals can no longer have the luxury of spending the time on such manual work.  With this reality and the emergence of tools and solutions aimed at streamlining IP management processes and reducing the need for human interaction, we ask – What is the future of IP management?

INTRODUCTION

IP professionals face a far more uncertain world today than in the past.  Filings are at an all-time high.  According to the World Intellectual Property Organization (WIPO) statistics database, more than 2.6 million patents were filed globally across more than 160 patent offices in 2014.  This number has increased every year since 2009 and there is almost three times the level of filing activity since 1990.  The sheer scale and volume of filing and competitor patent activity increasingly challenges IP departments that are already overstretched.

The landscape in which IP professionals work is becoming increasingly complex amidst fluctuating policies in different territories, and new developments such as the European Union unitary patent scheme. As well as issues and legislation that impacts the validity of new and historic patents.  As business continues to globalize, IP professionals need to understand the changing environment for the benefit of their own IP in other countries, as well as their competitors.

Automation, outsourcing and IP management software (IPMS) now helps IP departments and legal firms to manage their IP portfolio more efficiently. As these solutions become more sophisticated, IP professionals are afforded the time to consider IP portfolios at a strategic level, asking questions such as: “What is the value of this IP to me and in which countries?”; “How do I ensure my company is effectively protected?”; “What is missing from my IP portfolio?”.

These are some of the questions that IP professionals need to answer to ensure their companies grow and succeed.

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A VISION OF THE FUTURE OF IP MANAGEMENT

The breadth and scale of information now available to IP departments was previously unimaginable and using this information to drive insight remains challenging.  The most progressive organizations will use insight from their own IP portfolio and the portfolio of others to drive the entire shape and direction of their business.  The role of the future IP professional will be less about reactively protecting the innovation that a company creates, and more about using their unique insight to shape future product and service development, geographical expansion and even the future direction of research and development.

In the four key phases of IP management – creation, protection, management and optimization – new technology, automation, data availability and collaboration are combining to shape IP management strategy.

IP CREATION

The future of IP creation is about leaner, faster, more informed innovation.  Companies will face questions not only about what to develop, but how.  As businesses globalize, the commoditization of research and development continues to grow, requiring businesses to innovate on demand and bring in resources as required to solve technical or innovation issues.  In this environment, companies need to understand where the best opportunities lie for investment, effectively making the best-possible future bets.  This insight can be gained from a deeper and more holistic understanding of both a company’s internal IP portfolio and, more importantly, the competitive landscape.

Companies now have access to more than 100 million patents in more than 150 countries, with the computing and storage capacity to interrogate this data available on demand.  Technologies such as cloud computing and Machine Learning, alongside easily available large data sets, enable insight to be generated quickly and at little cost.  This facilitates a radical new way of understanding what is protected and, more importantly, what is not.  Combining this data with sources of information such as company growth, country economic performance, or even feeds of news and information can help generate insight that shapes future portfolio creation.

This will drive better decisions, not only on where innovation should be targeted, but on how it should be completed.  Third party companies have amassed hundreds of thousands of crowd sourced experts to help businesses increase the volume and velocity of innovation.  This can transform how companies build value, effectively enabling them to innovate more efficiently and to decide which forms of IP rights will support their portfolio most effectively and quickly.  In an environment where up to 85% of a company’s value is based around its IP, this will lead to companies focussing on improving shareholder value through strategic innovation and acquisition, coupled with strong IP protection.

IP PROTECTION

Automation is already transforming the way IP protection takes place, providing companies with a far greater level of transparency and simplicity in capturing, nurturing and protecting ideas.  In the future filing will become significantly more automated and correspondence will be docketed automatically, with APIs available for patent and trademark offices, enabling businesses to reduce administrative activities and focus on strategy.  This will also drastically reduce the amount of human input, reducing errors.  In US Patent and Trademark Office data, for example, there are more than 800 different spellings of ‘International Business Machines’ in patent grants.  Automation will ensure this becomes a thing of the past.

Further, big data will also help to drive detailed insight into IP protection.  Companies and law firms are beginning to embrace prosecution metrics to provide insights into attorney performance and prosecution efficiency. Currently, the largest proportion of IP budget is spent on filing and prosecution, so the ability to remove filing with a low probability of success or commercial impact and increase higher probability filing will help to ensure more successful use of budgets, reducing cost, including ongoing R&D costs and focussing the company on where success is most likely to be achieved including: new products; technology; business strategy.

IP MANAGEMENT

Today, more advanced companies are starting to identify how much revenue an IP portfolio generates for an organization, demonstrating the return on investment.

Fewer companies are able to identify the most important IP within an organization, or to offer counsel on where the next generation of IP should focus. Understanding the value of IP and using it to make informed business decisions is central to the future of IP management.  IP professionals should instantly be able to assess a portfolio to understand and maximize value.  On a micro scale this will lead to more informed decisions on issues: such as whether to retain patents when they are due for renewal; whether licensing or sale is the preferable option; which geographies and targets offer the best opportunities for IP exploitation.  All of this delivers a clearer understanding of the return on investment of innovation taking place within a company, providing future budget justification.

When this information is combined with competitor portfolios and other external data, it can provide an overview to help shape future company.  If limited research and development funding is available, then IP professionals should be providing insight into where it is best spent.  If emerging markets offer a lucrative new opportunity, then what is the filing environment and where are the opportunities?  Insights such as these can transform an IP operation or the advice of external counsel.  Changing IP from a reactive role (responding to company demands) to a proactive role helps to shape a number of aspects of wider business strategy.

IP OPTIMIZATION

IP is already on occasion one of the key drivers of mergers and acquisitions.  The rush for the right IP assets will drive more strategic acquisitions in the future.  Having visibility and clarity over another company’s IP assets means being able to fully understand the value of IP to the business.  With global big data sets on patents now available, including commercial data and company performance, businesses will be able to understand the likely value of an IP portfolio, what the cost of acquisition should be, alongside how it fits into a company’s current portfolio.

Finally, better transparency over the value of a company’s patents can drive more accurate market valuations for companies.  IP professionals who can clearly identify the value of their patents, will be able to demonstrate this to the stock market and potentially create additional shareholder value.

CONCLUSION

The future of IP management is exciting; it is about closer alignment with the wider organization with the help of technology to reach that wide in a timely fashion.  IP professionals have a unique opportunity to offer businesses a wider and more complete overview of company value than ever before, driven by the availability of new big data sets and competitive intelligence, thereby moving the focus from cost to value.

The argument for IP professionals to be an integral part of more strategic business planning and development processes has never been stronger. The insight that can now be derived from properly analyzed IP data – combined with external market information – can drive a more complete and granular overview of a company’s position in a market, geographic region or both.  IP professionals have always been important to a business, but they now have a unique opportunity to extend their reach beyond the IP department, shaping boardroom strategy with insight that only they can provide.