Patents are standard operating procedure for many small businesses, especially those that are engaged in innovative business strategies.
Without effective patent enforcement, the company's proprietary practices and other protected assets would be vulnerable to theft and exploitation in the marketplace.
Given the importance of patents, it's surprising how lax some companies are in the area of patent portfolio management. Once a patent has been secured, it is documented, stored and forgotten – even when the patent plays a pivotal role in the organization's business model. When combined with patents' constantly changing value (both strategically and monetarily), small business owners have a stake in creating a robust patent management program.
- Assess strategic value. Patents have value. But if you don't regularly evaluate your patent portfolio, it's easy to forget about the value of the intellectual property you already own. Annual portfolio reviews are a good time to consider whether it's possible to further monetize existing patents or to leverage them for additional short-term benefits for the business.
- Track competitors. Annual patent reviews also create opportunities to evaluate patents that have been filed by the competition and to compare them against your portfolio. The U.S. Patent and Trademark Office (USPTO) maintains an online patent database you can use to review approved patents that have been filed by competitors. In some instances, a competitor review process can be the spark that's needed to inspire new innovation in your organization.
- Update valuations. Patent valuations are a constantly moving target. A patent that had a high value last year may have experienced devaluation based on the state of technology or the approval of new patents. On the other hand, changing industry conditions may have increased the value of a patent that has been dormant in your portfolio. Either way, annual portfolio revaluation is essential for companies that are meticulous about accurate balance sheets and have an eye toward selling IP assets in the near future.
- Conversion assessments. Companies that periodically review their portfolios consistently extract higher returns from their patents because they know when it's the right time to convert patents into liquid assets. There is nothing more discouraging than realizing that you could have received a higher sales price for a patent if you had reviewed your portfolio on a more consistent basis. During the review process, flag patents that have no strategic value for your company and execute a plan to convert those patents to cash as quickly as possible.