Tony and I are very excited to share the IAM Magazine (Intellectual Asset Management) article we co-authored earlier this year: “Welcoming the Innovator’s Dilemma to Patent Committees”. This article was previously only available to subscribers to IAM Magazine, but our agreement with the publication now allows us to share the article for free on our websites two months after publication.
The article grew out of a blog post that I originally wrote for the Patinformatics blog (Thank you, Tony, for helping nurture/edit the earlier blog post, and also for co-authoring the IAM article). The article includes significant new material including: background information on patent committees, an illustration of the invention scorecard, and examples of disruptive technologies. In addition, Tony showed how to engage senior management in IP strategy by using concepts of portfolio management (risk and diversification).
CEOs can benefit from the powerful insight that patent committees are an influential (and under-appreciated) resource allocation function. A common CEO challenge is translating strategies into operational implementations. Patent committees can solve this challenge. Through a very simple solution framework (what we dub the “3 P’s”), patent committees can act as a powerful “lever” that translates strategy into implementation. The two paragraphs below illustrate some of our thinking on this topic from the article:
We recommend broadening the purpose of a patent committee to think of patents as an insurance policy covering a disruptive technology. Our observation is that leading companies allocate very little of the overall patent budget for disruptive technology inventions, typically less than 5%. (By contrast, small start-up companies allocate nearly their entire patent/R&D budgets to disruptive technologies. And patent decisions are made by individuals instead of a large patent committee.) Large companies prefer to allocate most of their patent budgets to sustaining technologies.
Our opinion is that the traditional purpose of patent committees in large companies is too narrow; protecting against only existing competitors blinds a company to the greater threat of new entrants. However, patents on sustaining technologies are practically useless against a new entrant/competitor using a disruptive technology. As such, the patent budget for disruptive technologies should increase to at least 10% to 20%.
We hope all of you enjoy the full article and we look forward to comments and questions, either through the comments section, or by contacting us personally.
Peter Kim is a Principal at Irvine Pointe Advisory, LLC, an IP Strategy consulting firm. He has over a decade of industry experience with two publicly-traded IP licensing companies and two venture-backed patent monetization startups. He was Director of IP Strategy at Rambus (RMBS), responsible for driving future licensing revenue growth through strategic semiconductor patent acquisitions. Peter also worked for Acacia Research, IPVALUE Management, and Walker Digital. He is a co-inventor on 17 U.S. patents — including 2 patents sold to Groupon, and 12 patents sold to IGT.