Are You Managing Your Patent Portfolio Strategically?

How many times have you found yourself scrutinizing your budget for opportunities to save money, control costs, and optimize productivity?
Posted on
March 20, 2020
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How many times have you found yourself scrutinizing your budget for opportunities to save money, control costs, and optimize productivity? You might find a way to save $100 on travel or $15 on office supplies, because you can easily evaluate the cost/benefit analysis of these expenses.

When it comes to your legal costs, do you find yourself making decisions with very little ability to articulate the benefits you’re obtaining? In terms of your patent portfolio, can you articulate the specific objectives of your portfolio? Or do you just assume you are “protecting” your inventions, because your outside counsel tells you what everyone else is doing, without a clear understanding of what “protecting” really means?

There are various aspects to patent strategy, but the first one you should tackle is establishing objectives for your patent portfolio (a topic for another day). Once you know your objectives, you can implement a systematic approach for ranking your existing and new patent assets according to those objectives.


Your patent portfolio objectives will be unique to your company—your leadership, technology, industry, competitors, resources, and philosophy. For example, a founder-funded startup company introducing a breakthrough technology in a highly competitive industry will probably have a very different portfolio approach than an established public company operating across a breadth of service segments. Medical device companies are different from software companies, and both of those are different from pharmaceutical companies.


While you will need to customize the approach you take to fit your specific situation, you can use the following matrix as a starting point. This matrix outlines four cross-sections that every company can consider:

  • Internal Technical Factors: Do the technical features align with our business model?
  • External Technical Factors: Do the technical features support a competitive advantage?
  • Internal Legal Factors: How efficiently can we obtain a patent that aligns with our technology roadmap?
  • External Legal Factors: How can patent assets be leveraged and successful would it be?

Each of these factors can and should be analyzed more deeply in order to make them meaningful to your overall business strategy. For example, you will want to define your business model components, which might include: revenue goals, customer acquisition, industry leadership, investor relations, innovation culture, and so forth. The way you define your overall business strategy will drive how you create a ranking system to help you quantify each portfolio asset relative to the others.


Then, after you have relative rankings for your assets, you can evaluate the distribution of those assets. Depending on your company and industry, you will probably find your distribution follows a bell curve or variation thereof, similar to the blue curve in the following graph. Otherwise, if you find your asset rankings deviate substantially from a bell curve, then you can evaluate whether: 1) you have properly identified your business strategy, 2) your ranking system accurately reflects your portfolio assets, and 3) your company strategy and portfolio assets should be consistent with industry benchmarks.


Finally, after you settle on a proper asset ranking framework, you can define asset management procedures to manage the assets based on their rankings. For example, if you use a ranking system with designations of A, B, and C, then you can identify default goals and actions for each designation. This will facilitate thoughtful, coordinated management of your portfolio as a whole. The types of actions you might define for different asset rankings might include:

  • Preparation and prosecution budgets
  • Specification scope constraints
  • Independent and dependent claim quantities
  • Embodiment focus or breadth
  • Prosecution goals
  • Foreign filing candidates
  • Acceleration program participation

A predetermined action plan based on asset rankings will also facility useful resource allocation planning and budget forecasting. Specifically, you can rationally allocate more substantial resources to your higher ranked cases and fewer or less substantial resources to your lower ranked cases, as shown in the green curve in the graph above.

I would love to hear other ways you manage your patent portfolio strategy. If you would like more information on a sample ranking framework, contact me and I would be happy to provide further insight.

[This post was originally published February 2, 2018, on LinkedIn by Jeff Holman.]


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Legal Disclaimer: This general information does not establish a legal relationship with any attorneys or law firm without a written and signed legal representation engagement agreement.

Jeff Holman
Jeff Holman draws from a broad background that spans law, engineering, and business. He is driven to deploy strategic business initiatives that create enterprise value and establish operational efficiencies.

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