Plan for the Chief Intellectual Property Officer


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Blueprint for managing a technology company's intellectual property -- John Storella

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Plan for the Chief Intellectual Property Officer

  1. 1. Plan for the Chief Intellectual Property Officer Creating Company Value through Strategic Use of IP John Storella Intellectual Property Services for Innovators in Biotechnology
  2. 2. Plan for the Chief Intellectual Property Officer Creating Company Value through Strategic Use of IP I. Be proactive Because he who hesitates is lost! II. Patent Committee Purpose: To have a body to make strategic decisions regarding intellectual property A. Set up a Patent Committee 1. Membership: Persons who have a stake in, and can meaningfully contribute to, decisions regarding intellectual property: CEO, CTO/CSO, VP of R&D, Chief IP Officer 2. B. Convene Patent Committee monthly 1. C. Consider also: CFO, GC, VP of S&M, outside patent counsel Make decisions on strategic IP issues Develop a reasoned IP budget 1. Patent Budget  2. FTO Budget  D. Spend money building the portfolio until the next dollar spent would create more value if spent elsewhere Spend enough to perform initial searches on each product and a semiannual update Create IP savvy among employees 1. Present periodically about IP issues to raise awareness: Reporting inventions, maintaining confidentiality, record keeping Intellectual Property Services for Innovators in Biotechnology
  3. 3. Plan for the Chief IP Officer E. Page 2 Make core forms available to Company 1. Employee invention and confidentiality, assignments, invention disclosure forms, third-party confidentiality agreements III. Exclusivity Strategy Purpose: To advance an IP portfolio that provides meaningful exclusionary power in the Company’s markets A. Identify Company’s technologies 1. Meet periodically with Patent Committee and technology groups to uncover new technologies and solicit invention disclosures B. Evaluate technology value in context of business 1. Identify customers, markets and products 2. Identify Company’s competitive advantages embodied in technology, software, brands, designs 3. Assign a relative value to each item of IP  Protects product features that provide competitive advantage (1) Excludes competitors from market (2) Excludes competitors from attract product features   C. Monetization potential Usefulness as a bargaining chip with competitors Patent Strategy 1. File early (first to file – use provisional) 2. Breadth of filing reflects location and size of markets and competitor locations 3. Accelerated examination of important patent applications Intellectual Property Services for Innovators in Biotechnology
  4. 4. Plan for the Chief IP Officer Page 3 4. Portfolio, as a whole, consistent with budget and marginal value of next application D. Trade Secret Strategy 1. Maintain as trade secret any technology that is easy to design around and difficult to patent broadly E. Publication Strategy 1. 2. F. File patent application before public disclosure Publish material to prevent patenting by others Brand Strategy 1. File trademark applications that cover brands of high-value  Company name  Major product lines  Major products G. Continually and iteratively reevaluate exclusivity strategy in view of evolving business goals 1. At first, file frequently to cover technologies 2. Later, be brutal in abandoning applications or pruning patent families that no longer contribute to business value and/or can no longer be supported by the patent budget IV. Enforcement Strategy Purpose: To police the Company’s IP to protect value A. Identify competitors that are significantly cutting into market share 1. Determine whether and when to assert IP through licensing or lawsuit, weighing cost, distraction and chance of success Intellectual Property Services for Innovators in Biotechnology
  5. 5. Plan for the Chief IP Officer Page 4 B. Identify third parties that can expand the market for your Company’s IP 1. Out-license your Company’s IP to the third parties on reasonable terms V. Freedom to Operate Strategy Purpose: To anticipate and neutralize, in a cost-effective way, third-party IP barriers to entry A. Clear products and services as they pass through gates: 1. Concept, feasibility, development, production 2. Continually reformulate FTO searches in view of changing product developments B. Perform FTO analysis 1. Divide the product or process up into functional components or steps 2. Perform FTO on each component or step to identify any third-party IP that poses a barrier to entry 3. Tier third-party IP according to its relative threat level   Pending patent applications that, if issued, would require further analysis – keep on watch list  C. Issued patents that requires further analysis Patents in technology area to avoid Develop a cost-effective neutralization strategy 1. 2. D. Design around/license/prepare for litigation (not infringed or invalid) Challenge third-party applications or patents where feasible Periodically update FTO searches Intellectual Property Services for Innovators in Biotechnology
  6. 6. Plan for the Chief IP Officer E. VI. Page 5 Recognize other barriers, such as single suppliers, label licenses Licensing Strategy Purpose: To obtain licenses under terms that maintain a healthy gross profit and to license patents useful against competitors A. Exclusive licenses are part of the exclusivity strategy 1. Be opportunistic in acquiring third-party IP (through license or purchase) that will give the Company a competitive advantage B. Non-exclusive licenses are part of the FTO strategy 1. Take necessary licenses when you commit to product development Royalty burden comes off the top line, so it must be small enough for a healthy gross profit C. VII. Competitor Strategy Purpose: To identify Competitor’s strengths, opportunities and threats in the IP arena A. Identify main competitors in your markets B. Consider their product offerings 1. Coordinate your exclusivity and enforcement strategies to create barriers to entry into your markets, whether or not competitors use technologies that you are using in your products C. Analyze their patent portfolios 1. Coordinate your FTO strategies to neutralize their roadblocks 2. File patent applications to competitor’s technology as a deterrent/bargaining chip 3. Challenge their patents if necessary  US, Outside US Intellectual Property Services for Innovators in Biotechnology
  7. 7. Plan for the Chief IP Officer Page 6 VIII. Investor Strategy Purpose: To manage investors’ perceptions of Company’s IP position for funding events A. Prepare for diligence by identifying and addressing all areas at which investors will look 1. Patent Portfolio  2. Freedom to Operate  B. IX. Have explanations ready for all freedom to operate issues Anticipate weaknesses and be prepared to address them 1. C. Have a story about what scope of claims you expect that make the portfolio attractive Investors don’t like surprises Coordinate timing of IP activities with financing events Administration A. IP Control 1. 2. Invention Agreements 3. Chain of title (Assignments) 4. B. Confidentiality Bayh-Dole compliance IP Management and document control 1. Docketing 2. Annuities 3. Secure documents Intellectual Property Services for Innovators in Biotechnology
  8. 8. Plan for the Chief IP Officer C. License management 1. D. Royalties, milestones Outside Counsel 1. Invoices 2. Expectations management Intellectual Property Services for Innovators in Biotechnology Page 7