Four stages of patent programs

In general, corporate patent programs don’t get the love they deserve. Questions around who owns the function, what the strategy should be, which resources should be applied, and how value will be measured (or even observed) often hinders momentum and investment for a program. Throw in the long cycle time in moving from idea to application to grant and it’s not entirely difficult to see why companies tend to lose patience and, thus, lose focus on fully developing their program as a core business competency.

Of course, the list of reasons why it makes sense to continually invest in and enhance your patent portfolio is long. Beyond the core benefits of risk mitigation, protection for your products and services, and hedging potential futures; a strategic portfolio also provides negotiating leverage with partners, opens potential revenue streams, and serves as a signal about how your firm values innovation.

Our work has shown that there are generally four approaches to how firms manage their patent program. These are:

1.     Stage 1 // Do nothing: This approach is just as it sounds. There is no organised process or structure for patent development. This isn’t to say firms in this stage don’t have patents. It’s very possible that a savvy engineer, perhaps with patent experience at another firm, raised a good idea and was directed to outside Counsel. By and large, though, patent development is not a competency being invested in.

2.     Stage 2 // Fundamental: This approach starts to introduce basic processes for patent development. A governance structure forms, and some level of strategy exists --- typically to help guide prioritization and filing decisions. The primary focus is on the capture of ideas, features, or other novel concepts resulting from products that are heading towards commercialization. Firms employing this approach usually have one employee, or a small number of resources, dedicated to the program.

3.     Stage 3 // Intentional: This is where programs really start to get interesting with firms bringing together strategy, process, people, and insights to continuously develop patent assets that are tied to different near and long-term horizons. In this approach there is generally a dedicated group of internal patent counsel and strategists that work across the company to generate patent assets through regular business reviews and creation activities. The group also functions to foster a community of inventors who understand, support, and contribute to portfolio development. Senior stakeholders are actively involved as champions for the program and in recognizing the contributions of inventors.

4.     Stage 4 // Sustainable: In this approach, the patent development function becomes formalized in how the firm operates. That is, moving from ideas to applications is less of a pull from the group of counsel and strategists, and more a push from the organization. This “culture of IP” typically creates a higher volume of potentially patentable concepts, thereby allowing for greater selectivity in which assets a firm chooses to pursue. There is harmony across strategy, people, and processes, thus allowing a firm to maximise the value of their patent development efforts.

Moving between stages is entirely feasible and we generally expect to see a progression as the firm and its role in the market evolves. The key, of course, is first understanding where you are so you can start to plan out the activities and investments to move you to where you want to be.

Which stage is your firm currently in? Is this where you want to (or should) be?