Intellectual property portfolio management

August 2016  |  10QUESTIONS  |  INTELLECTUAL PROPERTY

financierworldwide.com

FW speaks to Nicola Baker-Munton, founder and chief executive of Stratagem IPM, about intellectual property portfolio management.

FW: Why is it important for companies to adopt robust intellectual property (IP) portfolio management practices in today’s market? In your experience, do companies need to improve their efforts in this area?

Baker-Munton: We live in an increasingly globalised market and, while this provides many opportunities for small businesses, it does present challenges in achieving a robust IP strategy. With even the newest businesses capable of achieving a truly global presence, it is possible for IP protection to lag considerably behind market presence. For businesses that are new or have limited funding, it is essential that they ensure actions taken early on do not hamper their ability to maximise IP protection in the future. Although a patent should normally only be granted to a single invention, there is no requirement that it should disclose only a single invention. It is therefore prudent to expend a little more time and effort ensuring that all aspects of the invention that are known are included in an initial patent filing. A further aspect that is often overlooked is that additional related inventions, relevant data and further embodiments can be captured in one or more further priority filings within the first year. A single international application can then be filed making a priority claim from each of the applications filed within the first year. This means that the first filing can be made in a timely fashion, rather than being delayed while relevant data is generated and further embodiments are fleshed out. The use of the international application to delay decisions about, and costs in relation to, the geographical scope of protection can be key to many firms’ IP strategies. Once the international application enters national and regional phases, it can be split into any number of divisional applications ensuring that all key elements of the product are suitably protected. Preventing prosecution from closing in key territories by the filing of further divisional applications allows applicants to target the activities of key competitors in addition to protecting their own interests.

FW: Could you outline the main challenges facing companies that are looking to generate value from their IP assets and strengthen their portfolio?

Baker-Munton: Registration for IP protection has been shown to hold steady during times of financial uncertainty as companies look to innovate in order to maintain a competitive advantage. With Brexit looming companies must balance the need to innovate with costs pressures and budgetary constraints. This is compounded by rising patent filings in most technological areas and the corresponding risk of third-party litigation for IP infringement. In order to generate value from an IP portfolio it is essential that a company establishes freedom to operate in addition to investing in its IP portfolio. This can be a costly exercise but is expected by investors and lenders, where IP is to be used as security, and is essential before a company can warrant in commercial agreements that its products and technology do not infringe third-party IP rights.

FW: What techniques do IP portfolio managers bring to the table that help organisations place a value on their IP assets?

Baker-Munton: The key to effective portfolio management, whether undertaken by in-house or external IP managers, is to ensure the IP is mapped to the products and services. Also, understanding the costs of each element of IP to the business and how it protects, supports and leverages licensing or partnering deals, provides PR or competitive advantage, and enables effective decision making on where the greatest value-add can be realised. The aim should be to obtain a full return on the investment in IP, especially expensively registered IP such as patents, designs and trademarks, and this should be the goal of any IP manager.

FW: To what extent can outsourcing IP portfolio management to a third party assist in developing an effective IP strategy?

Baker-Munton: Outsourcing IP portfolio management to a third party is definitely a good commercial strategy, but care needs to be taken when choosing your external partner. The third party needs to have a great commercial awareness and track record in providing sound business advice. They need to be willing to put the time and effort into really understanding their client’s business, its plans, goals and values, its competitors and available funding to manage the portfolio in an effective manner. This is why recommendation or referral of an external IP management company is extremely valuable.

FW: Is it fair to say that third-party IP portfolio managers are, generally-speaking, more experienced and in possession of a greater degree of commercial awareness?

Baker-Munton: An attorney working for a range of clients will be able to use his or her experience gained from working with these other companies to the benefit of the client. Attorneys are constantly learning and adapting their advice based on this experience and changes in law and practice. Certainly the breadth of commercial experience may not be available from an in-house IP specialist, or at least that experience will begin to age if they do not make themselves active in discussing strategies with other in-house specialists. Another advantage if difficult decisions need to be made is that the external attorney will not have the emotional connection with the technology and innovators of the company. As a consequence, a commercially-minded external attorney is more able to assess whether protecting a new idea will add value to the company’s business plan. These are hard decisions to make if there is personal involvement in the innovation. It is also more cost effective to use an external IP management company as the breadth of technical, legal and commercial experience means the tasks can be completed more efficiently, often to a higher quality because of the greater knowledge – for example, the client may only need to meet with its attorney once a month or once a quarter with brief commercial update calls in between, depending on the number of IP issues, and at those meetings all decisions until the next meeting may be made and implemented by the external resource with no further distraction on management. Moreover, the resource can be scaled up or down as the company’s needs change at times of due diligence or other critical phases.

FW: How would you characterise the role that analytics and competitive analysis play in assessing threats to a company’s IP portfolio? To what extent do these tools give a company a commercial advantage in the marketplace?

Baker-Munton: Analytics and competitive analysis play a crucial role, not only in assessing threats to a company’s existing IP portfolio, but also in shaping a company’s future IP portfolio. The analysis can involve patent landscaping, monitoring patent filings and activities of competitors, as well as identifying new competitors entering the field. This analysis is something that needs to be updated on an ongoing basis rather than being a one-off exercise. Such analysis gives companies a commercial advantage, for example, by enabling companies to identify out-licensing, acquisition or partnership opportunities.

FW: For companies involved in litigation proceedings, what steps should be taken to mitigate risk and protect IP assets?

Baker-Munton: For companies already involved in litigation, they can take out what is known as after the event insurance (ATE) to cover the risk of a single piece of litigation or parallel litigations relating to the same patent or patent family. ATE insurance covers the legal costs that a party will be liable for, should the litigation be unsuccessful. This can include the policyholder’s own legal costs, as well as the costs that the policyholder may be ordered to pay to the opponent if the litigation is unsuccessful in a ‘loser pays costs’ jurisdiction. However, it is advisable to resolve a dispute before taking court action and if all such efforts fail and court is the only option, then the more traditional IP insurance products can be taken out before any litigation is contemplated to mitigate risk and protect IP assets.

FW: Could you outline the types of IP disputes that can arise, and some of the mechanisms available for resolving them?

Baker-Munton: IP disputes can arise if someone is using a proprietary product, method, trademark, copyright or design that has legal protection without the property owner’s permission. Often the most successful and cheapest way to resolve a dispute is to simply talk to the other company and agree on mutually beneficial terms to use or not use the IP. If this does not work, there are more formal mediation and alternative dispute resolution services which can be used to settle the dispute which are still cheaper than litigation.

FW: Have there been any recent, high-profile litigation cases involving IP infringement issues which have caught your attention? What lessons can parties learn from the outcome of these cases and what impact might they had on the wider IP landscape?

Baker-Munton: Following the popularity of children’s ride-on suitcases, a failed appeal action – PMS International Limited vs. Magmatic Limited – concerning a Community (EU) Registered Design by the proprietors of the ‘Trunki’ suitcase caught an unusual level of media attention for intellectual property rights in the UK. The court considered the greyscale CAD representation provided “a distinct contrast in colour between the wheels… the strap… and the rest of the suitcase” and this was fundamental in assessing the overall impression and ultimately a finding of non-infringement. Combining CAD and line drawings is not permitted and in light of this judgement, if an applicant seeks to protect a general shape, line drawings may offer more robust protection. From a UK perspective, it will become considerably cheaper from October to file multiple designs; up to 10 designs will cost just £70, whereas previously it was £420 for 10. This will provide opportunities to include more design variation with line drawings at a lower cost. The proportion of CAD-based applications currently filed, at around 40 percent of applications in UK, may fall as a result.

FW: How do you foresee IP portfolio management strategies developing in the years to come, given that many companies now need to achieve more with less?

Baker-Munton: IP portfolio management strategies should be designed to be applicable whether the company is in times of plenty or not, and should always account for both extremes. Companies should always be able to identify their core IP and recognise which parts of their portfolio are being maintained for other commercial reasons, such as blocking competitors or to generate revenues through licensing. When companies have to work with a reduced budget, maintenance of the core IP which is fundamental to the commercial activities of the company must take precedence. Ideally, an IP strategy should involve robust protection for core innovations, and extending that protection geographically or chronologically by filing applications for improvements. Protection should take place in various formats; registered trademarks, registered designs and utility models, where available, are cheaper to file than patent applications and provide a very useful layer of protection.

Nicola Baker-Munton, EPA, CPA is the founder and chief executive officer of Stratagem IPM. She is a Chartered UK Patent Attorney, European Patent Attorney and an Accredited Mediator, with a joint honours degree in biology and biochemistry. During her nine years as an industrial practitioner and four years in the private sector, Ms Baker-Munton recognised the need for much greater assistance with management of intellectual property earlier in the development of technologies, and advice and assistance with commercialisation throughout the technology/product lifecycle, thus founded Stratagem in 1999 to meet this need. She can be contacted on +44 (0)1223 550 740 or by email: nicola.baker-munton@stratagemipm.co.uk.

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Nicola Baker-Munton

Stratagem IPM