Beyond counting: The measures that drive IP strategy

2nd March 2015

Once upon a time, pretty much the only way a business would manage its patent portfolio, if it did so at all, was by counting patents. How many patents it had was the only measure.

These days, in an environment where intangibles account for 70% of enterprise value, this approach is clearly inadequate. Imagine if a business reviewed its property portfolio in this way – simply counting properties, with no regard for purpose, type, location, value, potential risks and so on. The measure would add almost no value in terms of the meaningful insight that enables mindful decision making.

Simply counting patents is equally without merit – it takes no account of quality, or the value and risk associated with a portfolio, or of how well a patent portfolio supports overall business strategy.

Fortunately the increasing availability of IP business analytics is enabling businesses to take a far more strategic view – delivering real insight that links patent data with business critical issues like innovation, and enabling IP strategies that align closely with corporate goals.

These new, more sophisticated measures include:

  • Analytics that align a patent portfolio to business divisions or product lines: This, for instance, provides the opportunity to make informed strategic decions based on a clear view of of the pace and focus of innovation across the business.
  • Analytics that combine financial data with patent data to deliver richer insight: For example, combining patent and R&D data enables novel assessment of the return on R&D spend – again enabling informed decisions around future R&D investment and strategy.
  • Competitive intelligence that compares a company’s patent activity with comparable companies: To understand how a competitors’ innovation focus may have shifted, or if the pace of innovation in a particular sector has changed – a comparison between Schneider, Siemens and ABB’s process automation patenting offers a good example here.
  • Patent portfolio assessment in context: For instance comparing the territorial coverage of Boeing and Thales highlights the difference between a US and European-centric approach and raises questions about how they will respond to declining defence budgets, and the increased focus on dual-use technologies in defence.
  • Risk management that considers IP litigation: IP analytics can provide an immediate view of risk based on the quantity, likelihood, severity and type of litigation in a chosen sector – a relative view of the IP risks facing, say, Microsoft and SAP can be generated quite easily, and can help to shape strategic decisions around IP risk management.

There is no doubt that IP strategy is now crucial to corporate success. A company with a well implemented and managed IP strategy is able to react and respond to new challenges and opportunities more quickly and more effectively. Accessible, instant business intelligence will be vital to enabling such a strategic and business orientated view of IP.

For more information, including visualisations related to each of the examples cited here, read our latest Cipher Case Study.

Category: Publications