This is Part 6 of a 8 step series on how SME’s can strategically manage IP during economic events: Outside Counsel & IP advisors
The key to successfully managing strategic IP prosecution during economic challenges relies on an understanding of “value adds” counsel and IP advisors may add in reshaping a strategy due to external changes in the IP environment.
During economic downtime it is not uncommon for ventures to look at reducing patent budgets, which trickle down to abandonment and divestitures. Why? Organizations facing liquidity issues often sell IP, or fully abandon their IP. With cash flow becoming a challenge for some firms, the IP on the open market may only increase with the possibility of lower pricing to come for some portfolios. For companies facing bankruptcy and potential liquidation of assets there is the real threat that the assets will be sold at a high discount, leaving Freedom to Operate control in the hands of competitive ventures or larger market players with the capital to acquire assets for future market control. Firms with available capital to acquire and hold can now move to increase or restructure their future IP positions for a fraction of the cost. In either case, the result may be a competitive shift in patent or other Freedom to Operate positions.
As the market changes, data driven IP trends can be an invaluable source of competitive market intelligence. In practice this means engaging outside advisors (counsel, IP analysts) to help identify upcoming trends that can be capitalized on, but also tracking of any portfolio changes from key competitors or IP owners.
Working to reduce costs, outside counsel can be an ally in working out various prosecution plans with regard to delaying or deferring patent office extensions for non-core IP, and prioritizing core IP that is necessary for continued operations of the business. Much like was outlined in the IP Budgeting discussion (Step 2), taking an approach that lays out the portfolio spend over a timeline and mapping out various options will provide the ability for an IP team to proactively make prosecution decisions in parallel with budget change requests.
If material changes are made, should include having counsel assess IP obligations from contracts as changes to the portfolio are made will ensure (both for your organization as well as companies that have obligations to your organization).
Seek to answer the following questions:
- For our business and our existing IP plans, what can be delayed and deferred using traditional patent office extensions, and what are critical decisions to consider that may prompt loss of rights?
- What other IP obligations do we need to consider?
- How can we be creative with our IP prosecution plans (resourcing, budget)?
A useful patent strategy still needs to have real market applicable patents that can be used to at least defend, license, or enforce. In-prosecution repositioning will build on the IP audit (Step 1) and budgeting (Step 2) outcomes. This may be mixed with IP operational updates (Step 3) while building a business relevant portfolio (Step 4) that respects and leverages contractual obligations (step 5) that may change over time. Next, an approach that leverages external advisors to help assess changes in the external IP environment using IP intelligence lays the groundwork to update a prosecution strategy based on budget and business requirements.