Patent strategic review – filing and acquisition strategy

It’s not uncommon that early in a new client relationship, we will be called in to have a look at the IP strategy for particularly important products to that client.  Part of our analysis of that product includes an assessment of the intellectual property rights protecting or related the relevant products.

We often choose to undergo this assessment of intellectual property protection around important products as an early step with new clients.  We do so because of the strategic principle that while a company cannot influence how vulnerable the competition’s IP position is, they do have an important say in how vulnerable their own position is.  It is important to shore up vulnerabilities in the defense as a first step toward building an IP position to advance the business.  The analysis also allows our client to understand where exactly the product’s power comes from, how much of that is associated with IP, and how much relates to other strengths inherent in the business.

In the case at hand, we discovered that that most of the technology integrated in the product (not yet launched on the market) was based on a specific core patent, which carried dependencies on a number of internal patents existing in the client’s portfolio. We also discovered that there was the possibility to further protect the product by adding one additional utility patent, which was not taken into consideration before by management.  We recommended this step immediately given the inherent vulnerability of patent positions dependent upon only one or a few patents.

We continued our activities with a Freedom to Operate (FTO) analysis, which was meant to assess whether the named company was free to engage in commercial activities on the market (not infringing or subject to infringements from outside parties). Because the analysis revealed no FTO restrictions, we directed our efforts towards creating a strategy for patent filling that would build up the patent position and start to reduce the dependencies on any given one patent.  We also sought to strengthen the alignment of the patents with important trademarks.

Together with the company’s management, we determined the rationale behind IP strategies for target markets and standardized it into a specific process, similar to the one below:

  • Tier 1 – Always file patents and trademarks in these countries (if engaged in direct or indirect commercialization efforts).
  • Tier 2 – Second tier countries – File patents or trademarks in accord with the existing or expected activities of competitors, inclusive of competitor dominated markets, or countries important for the future development either because of research or commercial activities.
  • Tier 3 – Countries to be considered on an ad hoc basis (countries potentially important because of research or commercial activities).

We then set in place a filling system that allowed the company to find and acquire patents in their target markets in optimal conditions where it strategically made sense for the current owners to support the acquisitions.

After our initial collaboration, we continued to offer advice, as needed, for management on a number of issues. The core of this work involved strengthening IP operations so that the company could succeed in the market on its terms, and not terms dictated by competitive IP activity.  After a while, we were asked to conduct an educational program on patent filling procedures targeted to the legal and management department. The training was meant to describe the patent filling process from a business strategy point-of-view, and pinpoint different opportunities and restriction that would be used by an internal team to shape the patent filling and acquisition strategy for alternative products in the future.

The course included four sessions on issues such as: the invention capture and disclosure systems, types of applications, practices on how to choose target countries depending on the strategic focus, practical advantages of choosing different application systems, key dates, patent prosecution (alternative during the process), patent maintenance, periodic portfolio reviews and litigation strategies.

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