Patent Portfolio as Business Strategy

Introduction:

A patent portfolio is a compilation of patents are owned by a sole entity such as an individual or business. The patents may be related or unrelated. Patent applications may also be regarded as included in the patent portfolio. The monetary benefits of a patent portfolio include the market monopoly position for the portfolio holder and revenue from licensing the intellectual property. Non-monetary profits include deliberate advantages like first mover incentives and guard against opponent portfolio holders. Constituting a patent portfolio may also be used to encourage investors because patents have fixed lifespan i.e 20 years hence the value of a corporation's portfolio can be a considerable portion of the by and large cost of the business.

It differs from company to company. When a patent portfolio being developed for a large company, the strategies would be different and if the patent portfolio being developed for a new company or startups then strategies would be different.

Patent Portfolio:

Patent lawyers with technological and legal expertise increase the value of the customer's patent portfolio by building up a solid patent strategy. Patent proprietors utilize effective portfolio management for the usage of beneficial plans of action over the globe. Because of strong patent enforcement activities, technology organizations and inventors can forestall patent infringement by outsiders.

Patent experts lead regular patent audits in a proactive way to guarantee satisfactory patent protection for existing products, alongside standard audits of potential infringement situations via freedom-to-operate studies. Moreover, the patent audit covers the intermittent audit of pertinent arrangements of the patent licensing agreements and business contracts. The most important patent resources are commonly evolved by innovative organizations that position their research-driven innovations in front of the occasions across different technology areas, such as, semiconductors, telecommunication, Internet of Things (IoT), robotics, automobiles, material science, polymers, agrochemicals, software, mobile applications, artificial intelligence (AI), machine learning (ML), drones, life sciences, biotechnology, pharmaceuticals, healthcare, consumer electronics, and Standard Essential Patents.

Developing an IP strategy:

To develop a business with a patent portfolio, we should develop the IP strategy efficiently with the help of the below steps.

• Assess your company's IP assets and prioritize

• Know your competitors

• Identify, what's the rapidity of innovation and chances for enlargement

• Determine the finest technique to guard your IP

• Develop a plan, set goals, and implement

• Get help from other advisors or consultant in the relevant field

Companies should strategically define their intellectual property rights in the market and defend their territory. The result of this is a competitive advantage that generates income, gives longevity to the business, and enhances its brand reputation. Generally, Banks and investors are aware of the valuation of patents and are attracted by startups that take care of Patent protection. Without proper protection of a patent, competitors can easily copy inventions, designs, or exploit a brand name that resembles "your" company name.

Also, Companies can use Patents both as Sword and as Shield. Companies can attack competitors that copy their technology and with registered trademarks can attack competitors that imitate their brand name. Companies can also defend against attacks. Indeed, competitors can be discouraged to enforce their IP rights against "your" company since they know you could in turn do the same.

Patent Strategy:

A patent strategy is a branch of an overall intellectual property (IP) strategy. It's generally the essential part of such a strategy for technology-based companies. The IP strategy must follow the company's Research & Development strategy which in turn should follow its overall business strategy.

The main deliberation is the rights that you will achieve with granted patents. A patent will not give you a positive right to exploit your patented technology, but rather the right to exclude others from doing it. Third-party knowledge is essential since the patent is not only beneficial as weapons to be brought out and applied when necessary. They may be beneficial simply to exhibit value in your business. The business strategy of a company that is likely to be interested in patents perhaps be expressed more widely as the usage of novel technology to get a benefit in the market place.

Steps involving to develop a patent portfolio:

1. Firstly to understanding the objective of the company, whether the company is defensive or offensive.

2. If the company is defensive then the main focus is on litigation and blocks the other competitors in the same domain.

3. If the company strategy is offensive then the company mostly depends upon monetizing patent towards increased revenue or asserting market position through injunctions.

4. The business strategy can be put in place by way of regular due diligence which could be achieved by a constant and regular market watch.

5. Stockholders because of this should develop a framework for creating the patent portfolio, having a plan, and implement the same.

Reasons for building a patent portfolio:

• Enforce against a competitor

• To increase the valuation of the company by increasing commercial strength and financial value

• To deter a patent infringement lawsuit.

• Increase leveraging power over a strategic partner- Merger and acquisitions

• Attract investors or buyers

• Patent rights can be sold or licensed thus collecting royalties also the company can make cross-licensing agreements

Benefits of Patent Portfolio:

• A strategically developed patent portfolio helps to create value by generating revenue and minimizing costs.

• For many organizations, patents may be used for nurturing Research & Development efforts and dissemination of technology.

• A well-developed patent portfolio contributes as a defensive tool and lends a favorable edge to corporate negotiations.

  • For eg: Whenever a deal or transaction is happening in a patent-sensitive company to another buyer or purchaser and if the seller company has a rich & strong patent portfolio then in such a case seller company easily has the edge in negotiating the business deal with that purchaser or buyer.

• It may become a source of revenue resulting from licenses or sales.

• Also, it boosts and broadens the market position of the company; it helps to reach the company's widespread customer base.

• Large companies often procure and maintain a large patent estate. They may use their patents for generating large revenues by way of out-licensing.

Conclusion:

Each and every business is different, and any company that makes use of patents devises its strategy. Hence, the patent portfolio can be used as a business strategy effectively to add valuation to the company, and also various benefits could be avail to the business. Building a strong patent portfolio is now essential for every business especially for technological organizations.

Also, having a strong patent portfolio decides the market position of that organization also it will be helpful for startups while negotiating a contract with a large company hence in every company patent portfolio management is considered as key for the development and success of that organization in the future.

Know more about, patents law in India, see the video below -