Spend too much to protect too little (no. 14 in our list of IP mistakes)

Focus on the effect you wish your IP to have, not on the IP itself.

On many occasions during IP strategy training courses I have given, I have suggested that patent strategists learn how to play the Chinese game of Go.  Go is a well-known game of strategy in the East, just as Chess is in the West.  The mindset needed to win the game of Go is similar to the mindset needed to win in IP strategy.  You want to claim as much space of value as possible with the smallest number of resources prudent for the effort.

A common mistake in IP strategy that is also common among novice players in the game of Go is to dedicate too many resources to protect too little space unnecessarily well.  This mistake is hard to diagnose.  Who can say how much protection an invention or idea needs until a court puts it to the test, at which time no one is likely to fault you for being overly strong at that point?

Still, spending too much to protect too little can limit your freedom of operation and put you at risk of infringing IP obtained by other entities in space you left open.

Let’s look at patents to illustrate.

Expanding your scope of protection for the money starts at the invention review process.  First, you want to determine whether you actually need the right to enforce exclusivity against others for given inventions, or whether you just need to maintain freedom of operation.  So for example, if freedom of operation is all you need, you may achieve that globally at a fraction of the cost by using a defensive publication, and then use the money saved to protect other inventions.  Instead of patenting an entire system of technology, you can often just patent key components that you would be able and willing to defend in court, and then look at defensive publications and trade secrets to cover the rest.

Next, consider psychological as well as logical defences.  I have observed that patent practitioners tend to overly focus on the logical side of their IP protection and under leverage the psychological side.

Here is an example.

If you work in a fast moving industry, and let’s suppose you have ten patentable inventions to protect, then you may be able to achieve the same result of keeping competitors at bay with one patent and ten defensive publications that you could achieve with ten patents if you consider the psychology of your competitors.  Provided your organization has a reputation for enforcing the patents it has, and provided you sometimes have patent applications filed for inventions disclosed in defensive publications, then your competitors will be left guessing for 18 months whether or not there is a patent behind any of the defensive publications you had published.  How willing are they to take the risk?  By the time 18 months goes by, this of course being the time period that patent offices keep patent applications secret, you may already be on to the next level of technology.

Remember that with any IP strategy, you should focus on the effect you wish your IP to have, not on the IP itself.  Then ask how much IP and what kind you really need to achieve a desired effect.  The less IP expenditure you need to make to achieve a desired effect in one area, the more resources you may have left to secure and defend IP claiming more IP territory.

(This is number 14 in our list of IP mistakes and how to avoid them.)

[Image credit: oblivionz]

7 Comments on “Spend too much to protect too little (no. 14 in our list of IP mistakes)

  1. Pingback: 33 (make that 41) intellectual property mistakes and how to avoid them

  2. Very interesting to read I agree, however, we have seen in practice, specially when it comes to large multinationals, senior management acting in an opposite way, sometimes they just register and protect their marks or patents, even though it is much cost effective not to, but they think that protecting their dignity and image is also of value, i have often heard the following from senior management and in board rooms:
    ” If you exposed your hand, your rivals may not just eat your hand but all your arm”
    I have also noticed, in some cases that, infringers also play on the psycho of their victim, they first try with an asset of small value, and start to evaluate the reaction of the victim, to have a clear picture on which mechanics the victim works, and accordingly being able to predict when it comes to the big thing…

    I think that this point should also be put into consideration, specially in large corporation where saving is not the first priority.

    • Hi Shaheen,

      Thanks – yes, sometimes it can also depend upon how success is measured. Measurement was a parallel issue for the US Air Force in the 1990s which has a nice parallel. When given the mission to shut the lights out in Baghdad during the Gulf War, the original measure for success was to figure out where the power plants were and base success on the number of those destroyed. Looking at it more thoughtfully, the Air Force could accomplish the objective of shutting out the lights in Baghdad by destroying a handful of power plants, not all of them. That meant that all those aircraft that would have been needed to target the other power plants could be used to target something else. This type of measurement system based on the effects instead of actions is much closer to the strategic ideal of “The master does nothing (most power plants are left untouched), yet leave nothing undone (the lights are shut out). Even after that experience, the idea has not really caught on, and it can also be misapplied, as it was 12 years later, from a liberation scenario where it works, to an occupation scenario where it does not. Likewise with patents and marks, that total count ease easy to measure, easy to benchmark, and so count lingers as a measure of choice even when it is not particularly useful.

      Regarding the infringers, they are following a standard strategic principle of “Provoke Your Adversary’s Reaction” which involves testing an adversary’s response to a small action before committing to a large action. It’s no different in principle to probing a defensive perimeter in a military situation. One counter to this is another strategic principle of “Make an Example Out of Another,” which can actually be pretty popular among any Type A senior managers. This involves showing that you are not an easy target with your response to one infringer with the intent to deter others from trying to do the same. Another counter is to “Kick Away the Ladder After the Ascent” which can mean to underreact until you infringer is well invested in his infringed position and then pursue legal action when it is too expensive for him to back out. It all depends upon the situation. The key is to understand these principles so that you can use them with deliberation.

  3. I admire many of the views submitted below and the perspectives given would help articulate the meaning of IP strategy at different phases of development of a business. Some at start up would benefit from steps approach below listed, some later aspire to ICM or Intellectual Asset Management. For my part I humbly submit:”IP Strategy is the essential component of an overall business Strategy that is designed to (a) enable and maximize enterprise (and brand) value through the aligment of Board objectives with a clear approach to commercial exploitation and positioning of the business’ intangible assets and (b) drives a concerted business, legal & regulatory/compliance effort to implement protection & enforcement strategies that enhance the business and the brand”

    • Thanks Christian – ultimately to leverage one type of IP asset with another to produce a better (and less expensive) result than possible with only one type alone…

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