Prosecuting, maintaining, and litigating a single patent as a separate entity will not give a company or an individual a greater revenue or competitive advantage than by maintaining a collection of patents and deciding based on this collection, different research and marketing strategies. Hence, a patent portfolio comes up into the picture which means a collection of all the patents possessed by a company or an individual. These possessed patents can include applications as well as granted patents.
The portfolio can be built based on a particular product a company manufactures or a technology domain that is applied to various kinds of products or solutions of the company and will also consider the company’s market strategy.
Patent portfolio development strategies will be different for large-scale companies and small-scale/startup companies having limited revenue. The large-scale companies can appoint patent lawyers to develop these strategies and generally focus on achieving a strong predominant position in the specific technology area and uses offensive strategy to get large licensing revenue, whereas, the small-scale companies will need well-organized and cost-effective strategies to focus on obtaining quality patents and generating a valuable patent portfolio for acquisition or investments.
Patent portfolio management is a process a company adopts to stay ahead in the market by keeping a regular check on the patents a company holds and maintaining a coordination between the patenting strategy and their business strategy increasing the business revenue of the company. The patent portfolio management includes different strategies to generate an effective and targeted portfolio such as identifying the patents that are less valuable, and taking decisions to prune or abandon those patents, taking decisions on offensive or defensive strategies, licensing, mergers, or many other transactions related to patent portfolio.
To build an effective patent portfolio, the qualitative study and reviewing the patents a company holds in terms of legal status of the patent applications, technology relevance, competitor advancement etc. is performed to understand the relevant strengths and weaknesses of each patent of the portfolio is known as patent portfolio analysis. In addition to reviewing a single patent, the analysis would include how a particular patent in the portfolio will interact with the other patents in the portfolio. Through this analysis companies could apply multiple strategies i.e. keeping effective patents and pruning weaker patents, to generate a targeted portfolio then to put effort on a huge set of portfolio which would not generate a effective revenue/ profit margin.
A strong patent portfolio does not mean quantity of patents, it is related to the quality of patents which safeguards the entire product line by including all the new elements and improvements in form of stronger claim scope and focusing on divisional or continuation filing activities keeping in mind future scope too. A strong portfolio is built by always looking that the competitor’s advancement/ research activities working in similar domains as yours and act offensively or defensively through that. A strong patent portfolio helps in getting
There are ten key principles of a great patent portfolio:
The company must make decisions on what strategy should it implement for its patents which at least includes target requirements and investment available, and may also include licensing income, and specific financial returns on R&D, creating hindrances for competitors by not letting them commence patent lawsuits or stopping them from taking R&D initiatives.
The strategy chosen for a good patent portfolio should be dependent on the company’s corporate strategy/ company business objective.
The average investments in patents should be about 1% of the amount invested in R&D, but would depend upon the specific requirement of the company, rapid technology change, revolutionary discoveries, new companies and new industries, consumer sales, patent litigations from competitors, and an enterprising patent strategy implemented by the organization
The companies should maintain a stability between the quality and quantity of the patents in the portfolio, where the good quality of patents in one scenario can be judged based on claims that are clearly supported in the written description or in another scenario based on the ranking of patents and companies should understand the relative quality of its portfolio. However, the quality approach will require a huge investment and some of the patents will contribute to quantity to support the good set of patents.
The patent portfolio should be balanced geographically such as patent protection should also apply in the main market of a certain technology or should be applied in the location from where the company received the majority of reviews that would also help the company distributers. The decision should be based on the cost for obtaining a patent in a different geography, the enforceability of patent where a certain type of countries does not enforce a certain type of patents i.e., software patents are not enforceable in Asian countries.
The time balance between the R&D activities and patenting activities should be balanced by the company in early stages of its life to be competitively ahead of other competitors. However, in case of investment as a problem in early life of company some strategy can be implemented by focusing on major technical contributions, smartly using continuation of applications, and applying application in form of PCT or European patent to delay the national filing investments.
Management of portfolio should be an ongoing process in which holes in portfolio have to be identified and strategic actions should be taken such as preparing and presenting your patent applications yourself and looking for good set of patents granted to the competitors and buying them.
Some patents in the portfolio will be having high value and some might be having low value, therefore this should be determined on priority and repeatedly so that time and cost investment on the high valued patents can be increased and low valued patents can be sold out or abandoned.
Patent strategy should follow the decided corporate strategy and it can be measured through different criteria’s,
Splitting the responsibility of patents and patenting activities management internal to the organization
Strategies for management of the patent portfolio are different for different companies such as Samsung holds approx. 200000 patent assets geographically and the majority of patents are filed in Korea (which is the parent location), then US, Europe, China & Japan. These patents relate to smartphones, smart TVs, and memory devices. Below are the charts from Xlscout, showing filing trend and the jurisdiction wise patent coverage for Samsung.
Further, as majority of filings are in Korea the next chart below shows filing trend for the same.
The company has faced large number of lawsuits in the only US since the past 5-6 years and as the US market is a huge one, the US fillings have increased since 2009 as can be seen in below chart of filing trend by US, the increase in fillings from 2009. This helps the company in additional revenue and helping the distributors in litigation defense.
The patent portfolio of Samsung is one of the strongest one in terms of quantity and quality and to stay ahead of the competitors such as apple, the patent portfolio covers a full semiconductor supply chain. Further, to advance its technology, Samsung saw an opportunity to set up a patent cross-licensing agreement with Qualcomm till 2023 for mobile devices and infrastructure equipment. Although acquisitions are part of Samsung’s strategy, the majority of Samsung’s portfolio is built by itself and only around 6.4% is captured through acquisitions.
Patent portfolio value plays a significant role and helps the industry to boost its financial growth by knowing the monetary value of each of the patent the company hold. The value of the patent portfolio is dependent upon multiple parameters as below:
TTC Approach – We at TTC follow the 5-step approach while preparing a patent portfolio analysis report.
We at TT Consultants provide the service of patent portfolio optimization where we assist our clients in patent filing and maintenance decisions by looking deeper into both demerits and merits of a patent set. It includes extracting a patent set corresponding to the technology of interest followed by ranking of patents and then mapping high-priority patents to end products. We use automation in identifying best patents in the portfolio and then, identifying the possible first pass infringing products against each of those patents.
The tool used in Patent Portfolio Analysis is:
PATDIGGER (Our proprietary automated tool) which is a used to locate licensees and helps in automatically ranking patents against set competitors into various categories such as Gold, Silver & Bronze where Gold indicates patents having high chances of infringement and bronze indicate low chances.
The freedom to operate search can be done at different stages before product commercialization.
Analysis of products of target company – Web Crawling and Web scrapping competitor’s website to extract product data/ features and ingestion of product data into the system. Product clustering using human inputs into multiple technology domains.
Formulating queries on patent databases and extracted a list of patents of the client portfolio and cluster all the patents into multiple technology domains.
Compare the products technology domain with the patents technology domain to identify the overlapping technology areas.
Identify top patents having a likelihood of getting infringed by the given competitor(s) using the proprietary Automated Tool (PATDIGGER) followed by manual analysis. PATDIGGER identifies Gold and Silver Patents corresponding to the defined Targets and helps to identify top patents that can be useful in preparing evidence of use.
………………Column Break………………The parameters used by PATDIGGER are mentioned below:
Further, manually analyzing and ranking the sorted list prepared from the PATDIGGER according to the Claim Scope, Ease of design, Infringement Likelihood, Validity Check, Standard Essential Patents etc., to prepare an excel sheet with a list of patents with a high potential of being infringed.
Based on the patent ranking, the top-most patents having higher chances of infringement are selected for search.
The most important part is to identify the infringing products of the target competitors. With the team of experts, we perform detailed Infringement search on top ranked patents and prepare high quality evidence of use claim charts by taking into account the revenue generated by the product and earliest launch date of the product.
For more details or demo please get in touch with TT Consultants to perform Patent Portfolio Assessment to identify your hidden gems.
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