Comment: Top Five Tips for Better IP Budgeting in 2015
by Jon-James Kirtland, CPA Global*
Corporations and their outside counsel know it is important to manage intellectual property (IP) portfolios well, but accurately forecasting the costs needed to make that happen is notoriously difficult. Budgeting for IP costs is always hard because of the complexities involved. For example, patent owners will generally make applications in several markets where they wish to protect their invention and restrict competitors. Each market may have different fees, requirements, prosecution times, time to grant, and ongoing renewal or maintenance costs. Indeed, there are so many variable factors that, at times, it seems the only certainty in IP budgeting is the very uncertainty of it all.
Better IP budgeting comes from addressing the uncertainty and complexity of IP costs head-on with smart planning, strategic thinking and due diligence – helped by the clever use of technology. Both corporations and law firms can improve their IP budgeting accuracy and increase the speed and efficiency of the process by following these five tips.
Top Five Tips for Better IP Budgeting in 2015
1. Align a company’s IP filing strategy with its business strategy. Ask: Is this invention core to the company’s main strategic direction, likely to lead to continuing patent applications, or is it a one-off of secondary importance?
2. Organise inventions with a tiered approach. Not all patents are created equal – some are more important to a business than others. A ranking system should be developed that helps facilitate decisions on which inventions warrant the costs of patent filing, prosecution, maintenance and enforcement. This will provide a good way of prioritising which ones make the cut, based on available budget.
3. The Regional/National Phase in PCT Process is pivotal. The critical phase in a Patent Cooperation Treaty (PCT) application is when the application reaches its Regional/National Phase. The direction the patent takes beyond this point will significantly impact budgets. This phase should be watched closely for all open applications.
4. Review granted and pending applications periodically. Optimising an IP portfolio doesn’t end at the point of grant. Granted and pending applications should be reviewed periodically in the context of continued commercial relevance to the company’s products and those of competitors. Patents that are under-utilised can potentially be licensed to generate additional revenue streams, while other patents or applications might end up being dropped.
5. Leverage technology to optimise accuracy, speed and efficiency of IP budgeting. Where possible, technology should be used to automate the IP forecasting and budgeting processes. The right technology tools provide instant and accurate forecasts of total patent costs worldwide using advance modelling and a combination of forecasting methods, such as tapping into a global network of patent attorney firms to source live cost information rather than relying purely on historical information. In this way, the technology tools can generate estimated costs for patent filings based on diverse scenarios.
With IP activity continuing to expand throughout the world, the challenge of forecasting costs is likely to become increasingly demanding as even more variables come into play. IP professionals should use these five points as their compass to guide them through the unpredictable international waters of IP budgeting.
* Jon-James Kirtland is an expert in IP budgeting, having been heavily involved in the development of IP Forecaster, the IP budgeting software from CPA Global, a leading intellectual property (IP) management and software specialist. Jon-James can be reached at email@example.com.