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Managing Patents in the Information Technology Department

~Andy Gibbs, Excerpt Essentials of Patents (John Wiley)

Intellectual property management “tools” are the software solutions used to create, search, manage, license, or analyze IP – or more specifically, inventions and patents. Most Fortune 100 companies have, over the recent past, created home grown solutions designed to meet their immediate requirements. The process of creating in-house software is expensive, time consuming, and generally a poor use of programmer’s time.

As dedicated software publishers continue to stream out new solutions designed on the latest operating systems, continued investment in in-house legacy system upgrades returns a diminishing ROI. More importantly, the competitive advantage could easily be lost to faster, more flexible third party solutions. The IT manager therefore, should have a working knowledge of patent management systems in order to assess the “make vs. buy” decisions within the enterprise.

Why should the CTO or IT manager care about patents?
The functional titles that will be worn by the new generation of IT manager will include protector of the organization’s digital and intellectual property, and creator of new intellectual property. In fact, smart IT managers will soon find themselves being called on to select, install, and maintain an emerging new breed of software: intellectual property and asset management solutions, or IPAMs.

Types of IPAM Systems

What is an IPAM system? It is an enterprise-level software solution for managing intellectual property. Intellectual Property and Asset Management (IPAM) systems are in their early adolescent phase of development and are experiencing the same trying metamorphosis period that integrated accounting systems went through a quarter of a century ago. An integrated accounting system could mean anything from time-shared access to your centralized database stored on a third-party mainframe to small, fairly customized accounting applications that would allow the accounting department to tie issued invoices to purchase orders and accounts receivable history.

When more than 90 percent of a corporation’s share value was attributable to tangible assets, accounting systems were critical management tools. Today, when intangible assets contribute more than 80 percent of the shareholder worth in technology-driven companies, it only makes sense to manage those intangible assets with the same vigor.

IPAM: Intellectual Property and Asset Management System

The word management, when used in relation to intellectual property, usually means money. It makes sense that such a management solution keeps track of maintenance fees and licensing payments, royalty payments or valuation. Many of these management tasks have historically been outsourced to intellectual property management companies.

One critical value component to managing intellectual property is the timely payment of periodic maintenance fees to keep each patent or trademark in force.
Serious solutions are meant for large numbers of patents acquired domestically and/or abroad, allowing also patent or trademark database searching, tracking transaction histories, or any number of other function-specific add-on or plug-in modules.

While full integration within an IPAM solution is not quite here, certain functional modules developed and supported by emerging publishers can certainly be integrated to help companies reduce the maintenance fees currently being paid to outside firms and realize some level of increased efficiency within the organization.
System Modules

Although it is impossible to predict what future functionality will find its way into an IPAM system, I can at least give a quick listing of the functionality, as a standalone product or as part of an integrated IPAM solution. This list may provide a starting point to begin your assessment:

  1. Patent search engine
  2. Trademark search engine
  3. Patent analytics/patent mapping and visualization tools
  4. Trademark mapping or analysis tools
  5. Licensing royalty/annuity tracking systems
  6. Intellectual property maintenance fees payment scheduling
  7. Legal docketing system
  8. Electronic patent or trademark filing system
  9. Portal services
  10. Web-distributed application: patent work flow
  11. Knowledge management/IA: user knowledge base/transaction recording
  12. Patent, trademark, or intangible asset valuation analysis
  13. Web-distributed application: patent drawing system
  14. Technical journal/nonpatent database search or meta search modules
  15. Patent/technology licensing module
  16. Applications that may use a client/server configuration

 

 

Using this short list, the IT and IP managers can engage in a comprehensive internal audit on in-place tools, as well as needed tools – and the ROI analysis that accompanies future IPAM investments.

Patents Changing the IT Landscape

It is vitally important that IT managers become patent proficient. Patents may be a foreign concept to many IT managers in non-technical businesses such as multilevel marketing and commodity manufacturers, but they loom large as a business tool that could lead to a changing landscape of the industry sector or business type. Together with proper legal and business counsel, the IT manager can begin crafting a patent software policy.

Offense/Defense

Corporate counsel can advise IT managers of the legal nuances of software patents. From a business perspective, software patents help to establish either a defensive or offensive patent posture of a company.

A defensive posture is one in which the IT manager takes care to search, then has the corporate patent counsel search, for issued patents related to the software programs that the IT manager is planning on developing.

This defensive posture may include searching patents related to Website features, if the IT manager is attempting to develop a unique way customers can conduct e-commerce transactions.

Making the entire programming department more aware of software patents will not only help a company avoid possible patent infringement issues, but software patents that teach various solutions can often spur on the development of the next evolution of software functionality.

An offensive posture is one in which the IT manager determines that a new program may indeed be novel, functional, and not obvious, and therefore elects to obtain a patent on it. When the IT manager believes that a certain program could be awarded a patent, the PQM Team must convene and determine the potential benefit the program could bring to the company.

IT managers should keep in mind not only that company processes or software products may qualify for patent protection, but also that even inventive processes arbitrarily developed (such as the use of advertising logos and a screen saver) may become important and valuable additions to the company’s intellectual property portfolio.

A final consideration is the added value that a patent may have as a defensive tool. If your company has a valuable software patent, in the event that a company claims infringement on its patent, you have created a bargaining chip for licensing negotiations, in addition to the other obvious patent ownership benefits we’ve already discussed.

Internet Access to Corporate Licensable Technology

Because Website development often falls under the purview of the IT department, it may be the IT department that drives the initiative. Although someone other than the IT manager will make the determination to promote licensable technology via the Web, there are a few things the IT manager can bring to the discussion:

Marketing and promotion.

It is true that the Internet can be an incredibly cost-effective marketing channel through which to promote licensable technology, but the fact remains that unless that Website is properly promoted, listed, and placed well in the major search engines, it will do little good in getting the technology in front of interested licensees.

Listing the technology on Websites that are already getting very high traffic – Websites designed specifically to promote licensing intellectual property.
Listing on commercial tech transfer Web sites can be advantageous, but it sometimes involves a contract that provides the Web site owner with a commission or transaction fee of up to $50,000 if a patent is licensed through that brokerage, so review the fine print.

  • Obtaining a branded front end to a technology transfer Web site that is seeing high traffic numbers.
  • Make versus Buy. Given the pros and cons of building a corporate patent licensing Web site versus having a tech transfer host build and maintain the system.