The Invention Strategy and why it fails

The patent process at most companies is comfortingly familar. Engineers, scientists, and product development experts in one part of the company come up with ideas and submit them to a patent review board. The patent review board selects which ideas will be forwarded to the legal department for patenting. It is an organic process, driven from the bottom up and generally unadulterated by strategic concepts.

Experience shows that patent review boards, made up of technical experts, technical managers, and product managers invariably measure the value of any inventions based on its benefits to product commercialization and/or technical merits. The typical selection process is dominated by the view that the value of a patent lies in the value of the invention to the company’s own product development and marketing plans. The result of this is that the strategy for inventions - the R&D strategy - becomes the strategy for patents. 

The Invention Strategy is a strategy for inventions: what is needed is a strategy for patents.

A Strategy for Patents

It is obvious that the business value of any patent portfolio depends on what patents are actually in the portfolio. Ideally, a company's patent portfolio should be a well-focused reflection of the strategic business goals of the company. In reality, however, when the patent portfolios of many large companies are studied, the reflection is an altogether different one. In study after study, there is a remarkable similarity in the make-up of most patent portfolios. The fact of the matter is that many patent portfolios are filled with obsolete or "junk" patents - or  patents on productivity-enhancing technologies that have little value outside of the specific circumstances of the company. 

For all too many organizations, patenting is a horribly expensive and indefensibly inefficient activity.  Patent engineering is aimed at improving efficiencies, lowering costs, and focusing effort on patents of intrinsic or strategic value.

* O'Shaughnessy, James P. "Strategy for the Times: Intellectual Property Can Drive Corporate Profitability" from the book "Technology Licensing" edited by Parr, Russell and Sullivan, Patrick, John Wiley & Sons, 1996, p. 147-150

"80% of the patents in most portfolios lack the ability to alter either the calculus or dynamics of the marketplace" [...] and "cover technology that has little if any intrinsic value."*

­ O'Shaughnessy, James P. "Strategy for the Times: Intellectual Property Can Drive Corporate Profitability"

" 'Good companies use only 20 percent of their patents,' said Sam Khoury, the president of Inavisis International, a consulting firm that appraises patents, trademarks and related corporate assets. 'Badly run companies use only 10 percent.' "

Patent Donations are Novel Corporate Gift, The New York Times, November 17, 2002

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