Invigorating your portfolio: a summary

Invigorating your portfolio: a summary

IP relevance, portfolio value, managing the patent process, interacting with IP offices, the impact of COVID-19 on counterfeiting and how the pandemic is affecting working practices: these were just a few of the topics discussed over 3 days at the third annual summit hosted by Kilburn & Strode and Berkeley Center for Law & Technology this week.

Titled “Invigorating your Portfolio: Optimize IP assets, reduce risk and increase value”, the summit was held virtually over three days, with a mix of keynote presentations, panel discussions and open Q&A. Participants included in-house counsel, US and European attorneys and IP office representatives.

Is your IP relevant?

The big question posed on the first day was: how do you demonstrate the value of your IP portfolio? Key to achieving this is ensuring the portfolio is relevant (to products and revenue streams, both yours and those of competitors) and ensuring executive attention. The two aims ultimately go together: CEOs and CFOs are likely to focus on relevance when evaluating the strength of an IP portfolio.

That represents a change compared to a few years ago, when companies prioritised the number of granted patents in a race towards what one attorney dubbed “mutually assured destruction”. Today, many businesses are focusing more on patent quality. “Imagine if most of your portfolio is irrelevant – the cost impact on the company is unacceptable,” said Tuesday’s keynote speaker, an in-house counsel from a semiconductor company. “Irrelevant patent portfolios give executives a false sense of security and are becoming a major corporate risk,” he added.

So how do you ensure your portfolio is relevant? In summary: pay attention to the patenting process, being prepared to change it if necessary; constantly analyse innovation; test for value and relevance; be prepared to abandon; and get executive buy-in, and more generally buy-in at all levels. One way to assess relevance is to measure how much revenue each patent generates in each jurisdiction: the results may surprise you. Moreover, they can be plotted in tables or graphs that are easily understandable by executives who may not speak IP jargon.

Focusing on relevance also means being prepared to cull patents. Bloated portfolios may be the result of legacy filings, overly complex portfolios, indulgence of inventors with clever ideas that are not actually relevant to the business, poor review and prosecution processes, or simply ego. But making tough decisions can free up resources. As one panellist from a high-tech company said: “We looked at our portfolio and cut $500,000 in maintenance fees. That was money we could spend on new filings!”

Another lesson is the importance of communication: you are unlikely to get executive attention with legalistic explanations and pages of complex data. Instead, focus your arguments on terms that executives will understand and use analogies (such as comparing patents to real estate). Summarise arguments and use simple charts or graphics so that executives can grasp the key points in the limited time they have available. And take advantage of impromptu meetings to enthuse them about patents.

Interacting with patent offices

Day 2 brought the practical aspect of what we learned on Day 1. Building an effective portfolio, particularly for start-ups and spin-outs, requires an IP strategy that extends throughout the product life cycle, from the conception of the idea through the value proposition and growth up to exit. Too often, the IP plan is only focused on the beginning of that long process, but to be effective it needs to be modified, tailored and adapted as the business evolves.

At a macro level, this means having a plan that provides for a general health-check, as well as addressing specific issues (such as chain of title), costs, potential due diligence issues and freedom-to-operate. It starts with identifying the IP (which may not just be patents) and auditing it regularly – at least twice a year. “Consider it like an annual management appraisal of your portfolio,” said Wednesday’s keynote speaker, who works for a company that invests in IP-based businesses.

Regular review of the portfolio helps when you plan the budget, decide whether or not to pursue or postpone key steps in the prosecution process, and assess whether to abandon rights. None of these decisions is simple, but understanding processes, acquiring knowledge where it is available and building up relevant data will all be indispensable.

Even if you have trusted outside counsel, understanding the nuances of how patent offices work will put you at a big advantage. For example, in-house IP managers should know what data is publicly available and how to keep track of it, what guidelines the examiners follow and any changes in practice, and how you can interact with them – for example when to speak to an examiner directly, when you can delay decisions (if necessary for budget reasons) and when and how to file third-party observations. “Don’t be afraid to run the show!” as one panellist said.

Technology is dramatically changing the patent prosecution process. For example, the USPTO recently introduced new AI-based systems that assign incoming applications to the most appropriate examiner, allocate time for examination based on the number of claims and complexity, and evaluate examiner performance. Meanwhile, a range of companies are developing AI-based tools using open patent data that can identify examiner trends, assess portfolios, review patent documents and even search prior art. “If you are not already using examiner analytics tools, you need to be. Clients should demand it,” said one US attorney.

Further such tools are being developed. One of the five goals in the EPO’s Strategic Plan 2023 is to build a European patent system and network with a global impact, by cooperating with national offices and international partners. Much of this cooperation is likely to involve development and sharing of new tools and technologies: patent applicants are likely to expect greater information, better platforms and improved communication, such as improved videoconferencing.

The new normal

Our new normal, with all its changes, cannot of course be ignored when focusing on IP relevance. Some of these changes in interaction with IP offices are the result of the shifts we have seen in work patterns this year, with many people working from home and communicating via tools such as Zoom and Microsoft Teams. The USPTO was already well-placed with some 90% of its examiners working at least partly remotely even before the lockdown. Other offices, including the EPO and EUIPO, have invested heavily in remote working or hybrid working to ensure the safety of employees and comply with government regulations. In November, the EPO said that oral proceedings will be held by videoconference until September 2021.

In the trademark sphere discussed on Day 3, Offices have also responded to the real threat of misinformation and counterfeits, particularly in the pharmaceutical and medical device sectors. The USPTO set up a COVID-19 Response Resource Center which includes a section on trademarks, counterfeiting and fraud. It also published joint statements with the EUIPO and JPO earlier this year, and has introduced a prioritised examination programme for trademarks related to COVID-19. This programme can provide a two-month advance for no additional fee: 218 petitions have been filed so far and 125 of them granted. Parties can also apply for Accelerated Case Resolution (ACR) at the TTAB, which provides a streamlined process and a decision within 50 days of the hearing.

At the EUIPO, this year has seen new initiatives to promote mediation and conciliation, including the launch of assisted negotiation and expert determination in July this year in response to the COVID-19 crisis. The former provides coaching for SMEs or individuals who may not be familiar with the trademark prosecution process, while the latter offers a binding or non-binding determination of a specific issue in order to help negotiations move forward.

All the EUIPO’s mediation services are available to applicants at no additional cost: it has so far handled 32 mediations and 85 conciliations. The Office has also set up a co-mediation mechanism with the Shanghai Commercial Mediation Centre, for disputes involving Chinese parties, and is considering a similar agreement with a mediation centre in Singapore.

While science promises to beat the pandemic with the development of vaccines and treatments, these are also likely to raise new IP issues as counterfeiters seek to exploit brands and product names. For example, when it became apparent that remdesivir was being studied as a treatment for COVID-19, counterfeiters were quick to produce fake hand sanitiser and tablets using the remdesivir name (even though remdesivir is an international non-proprietary name rather than a trademark and the drug was still undergoing clinical trials for treating COVID-19). Some speculators even filed trademark applications and domain names incorporating remdesivir, which Gilead (the company that developed the drug) had to oppose.

More information; more access

Invigorating your portfolio requires a focus on relevance, strategy, planning and data. As one in-house counsel from a biopharmaceutical company said at this week’s event: “We all want more information; information is power!”.

The “democratisation of IP” is making more data, especially patent data, more and more widely available. National offices, as well as commercial providers, are playing their part in this by introducing new tools and services. The result will be more data sharing, improved portfolio management and – ultimately – better-informed decision making. That promises to deliver a fertile environment for innovation and creativity as we emerge from the challenges of 2020.

Please contact your usual Kilburn & Strode advisor if you have any questions.

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