Your R&D (Research & Development) team invests significant time, money, and effort creating new systems. These systems often contain valuable inventions that provide a competitive advantage, attract investors, and increase company valuation.
Your entire R&D investment is wasted if you don’t have a strategy to build a patent portfolio that protects your critical inventions.
Patents protect the inventions produced by your R&D activities. A well-designed patent portfolio is a carefully chosen collection of patent assets that support your business goals and objectives.
Failing to protect your most valuable inventions with a patent portfolio means that your R&D team is working for your competitors. Without patent protection for your critical inventions, your competitors are free to use your inventions to compete against you without having to invest any time, money, or resources.
Don’t let this happen to your tech company.
Over the past 25 years working with hundreds of technology companies, we have developed a strategy for designing patent portfolios that protect your R&D investment. Our strategy:
When you implement this strategy, your company will build a patent portfolio that provides a competitive advantage, attracts investors, and increases company valuation. This protects your inventions and lets you decide whether to allow others to use those inventions.
Here’s a summary of the 3-step strategy that has created dozens of high-value patent portfolios.
The first step in building a valuable patent portfolio is to identify all of your company’s inventions. You can’t take steps to protect or evaluate your inventions if you don’t identify them in the first place.
Improve your company’s chances for success by encouraging innovative ideas and creating a steady flow of new inventions from your team. You can do this by training your team members how to identify inventions. Some techniques for identifying inventions include invention mining, invention contests, and fun brainstorming sessions.
It’s also important to provide a simple system for your team members to submit their inventions. Company leaders are often surprised by the gold nuggets of innovation hidden within the minds of their team members. You need a system to identify these valuable innovations.
In one example, our client in the communication industry had a large team of developers and engineers. But the company only had one patent after being in business for five years. Using our system, we quickly identified 11 inventions that their team members had created but didn’t realize they were inventions. By implementing several invention mining activities and brainstorming sessions, we identified another six inventions that had not been identified.
After evaluating those 17 inventions using the process discussed below, the company filed five patent applications to protect the most valuable inventions. This was the start of building a valuable patent portfolio that protects their R&D investment.
To create a high-value patent portfolio, it’s important to properly evaluate and prioritize all of the inventions identified by your team. I’ve seen too many companies ignore this crucial step and end up spending time and money preparing patent applications for mediocre inventions. The strength and quality of your patent portfolio depends on a thorough evaluation of all inventions.
The first step in evaluating your team’s inventions is creating an invention evaluation committee that includes people who perform different roles in the company. People with a diversity of roles will have unique perspectives regarding the potential value of an invention, the cost to develop and produce the invention, and whether the invention is consistent with the company’s goals.
When we help companies create an invention evaluation committee, we typically include people from the following groups: executive, engineering/technical, sales, marketing, and customer service.
After creating the invention evaluation committee, the company defines invention evaluation criteria that is consistent with the company’s goals, growth plans, and other factors. Example invention evaluation criteria may include:
The evaluation criteria is applied to each invention to prioritize the inventions that have the highest value to the company. By carefully evaluating your inventions with respect to your company goals and objectives, you are designing a valuable patent portfolio that protects your critical assets.
When working with one of our clients that designs and builds data storage systems, their goal was to build a valuable portfolio of patent assets to support their planned initial public offering (IPO). The client was going to be competing with some large, well-established companies in their industry. For this client, the evaluation process focused on inventions that provided a competitive advantage as well as inventions that could be asserted against competitors, if necessary.
The client designed and built a patent portfolio that included 42 assets at the time of filing for their IPO. This portfolio supported a very successful IPO for the company because they had strategically designed a high-value patent portfolio that gave them a powerful position in their industry.
To protect your R&D investment, you must build a patent portfolio that includes your most valuable inventions. Protecting the wrong inventions is a waste of time and money. Patents covering the wrong inventions are dangerous because they give you a false sense of security. For example, a patent portfolio with a large number of patents may seem valuable, but if those patents have minimal value, they are not likely to provide the protection and value you anticipate.
As you build your patent portfolio, it’s important to include inventions that cover four key categories:
Patents covering these four categories will collectively provide a barrier to entry for competitors and broadly protect your R&D investment.
These four categories are important because protecting core technology and must-have product features provide a competitive advantage by preventing others from using those inventions in competing products. You can significantly increase the value of your patent portfolio by protecting future inventions, such as inventions that will be essential in the future systems. Your team can develop these future inventions by looking at current industry trends and creating solutions to problems that will likely result from those trends.
Defensive inventions can be valuable by protecting against aggressive competitors. Patents covering defensive inventions reduce the likelihood of litigation and provide a cross-licensing opportunity if litigation occurs.
You have worked hard to assemble a team of talented people who create innovative products and give your company an advantage in the marketplace. Protect that investment in your team by protecting your core technology, critical must-have features, future inventions, and defensive inventions.
Here are two examples of clients we worked with to protect large R&D investments by adding significant assets to their patent portfolio.
In one example, an automotive manufacturer wanted to expand into a new area related to autonomous vehicles. They were aware of several significant competitors and they were hiring a team of developers and scientists with advanced degrees. To protect their substantial R&D expense and defend against competitors, this client knew a well-designed patent portfolio was critical.
We assisted the client in cultivating inventions developed throughout their team, evaluating those inventions, and protecting the inventions with the highest value to the company. Over the course of several years, we expanded the size of their patent portfolio by more than 300 patent assets (issued patents and pending patent applications).
In another example, a client that makes inventory management systems was launching into a new online market. The new market included a large, well-established competitor. This client understood the importance of a strong patent portfolio to protect their competitive advantage and fend off the well-established competitor.
We worked with the client to protect all of their important inventions that secured their proprietary technology and must-have features that the competitor might want to copy. That client increased their patent portfolio by more than 500 patent assets, which provided strong protection against the competitor. Those patent assets protected the R&D investment in the new online systems and significantly increased the valuation of the company.
In many countries, it takes 2-3 years from filing a patent application to issuance of the patent. You can’t build a patent portfolio overnight unless you purchase patents that have already issued.
So, you need to get started designing your patent portfolio today.
My team and I have helped many companies implement the 3-step system described in this article. Those companies have valuable and expanding patent portfolios.
This system will work for your company too.
If you have an R&D department, I encourage you to schedule a free strategy call with me as soon as possible. During our strategy call, we will discuss your current situation and identify your most important next steps to protect your R&D investment.
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