The patent strategy of most companies is dominated by the assumption that the size of a patent portfolio reflects its strength for providing a competitive edge or protection against IP risks.
However, maintaining a large patent portfolio requires a great financial investment that only increases as the patents in the portfolio mature, as maintaining them entails great additional costs.
The question that arises then, is – should a company invest more in maintaining the portfolio size or should it invest in filing more patents for cutting-edge technologies? Or both?
We at Amdocs believe that this dilemma, currently being faced by many patent holders, can be solved by measuring the quality rather than the quantity of patents.
And, to do so, we have developed a unique methodology and supporting tools that enable us to measure the strength of each patent in our portfolio and the aggregated strength of the entire portfolio overall.
Using this unique methodology, we know how to maximize our investments, applying resources only to patents that increase the strength of our portfolio as we also forgo investment in “old” patents that no longer bring value.
Want to know how we do this? Read on!
What’s in a patent?
You might be surprised to know that a patent isn’t only about protecting your latest and greatest inventions. We are all at least generally familiar with the basic purpose of a patent – to legally protect an inventor with the exclusive rights to make, use, and sell their invention (but for a limited number of years, not forever, just in case you didn’t know).
As such, it’s clear that patents represent a valuable business asset in providing this protection, lending an organization an important competitive edge.
But, it’s a little bit more complicated (and interesting) than that. Namely, patents are not just about proactively protecting inventions. Rather, patents can also provide a strategic defense for sales and R&D, protecting them against IP threats.
In this case, the role of the patent is not necessarily to protect a certain invention, but to ensure freedom to operate.
Let’s take a closer look.
On the offense
An offensive patent strategy is one where a company proactively makes numerous patent submissions for cutting edge technologies that are expected to bring value to the industry (as based on competitive intelligence and market research).
So, whenever someone is interested in using these technologies, a license is required as are royalties to be paid to the patent owner. For, without a license the patent owner may take legal action to protect the invention and collect the relevant damages fees.
This strategy frequently entails expensive legal processes that often result in reciprocal lawsuits.
A defensive patent strategy on the other hand, is one that is designed to use patents to protect the company from the risk of being sued by competitors or patent trolls, i.e. from companies that follow the offensive approach.
At Amdocs, the first and foremost purpose of our patents program is making sure that the company has a powerful arsenal of patents to provide the broadest freedom to operate. Therefore, in recent years we have been investing tremendous efforts and resources into creating a robust patent portfolio.
With more than 500 granted patents in the US alone and more than 300 pending, our patent portfolio not only represents the innovative spirit of the company but also the broad extent of our freedom to operate.
A new approach to the defensive patent strategy
Many patent power houses are recently realizing that as the size of their patent portfolio increases, and as their patents mature, the cost of maintaining the entire portfolio, or at least a substantial portion of it, increases dramatically.
Although, since the patent budget does not necessarily increase to accommodate this increase in cost, companies are left with having to choose between investing in new filings or investing in sustaining the existing portfolio. And, it should be noted that maintaining an old patent is four times more expensive than filing a new patent.
To allocate resources wisely among old patents and new ones, patent power houses are now breaking away from the approach that dictates quantity as the single measure of a patent portfolio’s power. Instead the focus is shifting to being able to measure the value of a certain patent as well as of the entire portfolio.
Quantifying the quality of our patents
At Amdocs, we decided to make a similar shift and accordingly we identified and defined a unique set of value parameters, that enables us to measure each dollar we spend on our patents portfolio against the value it brings with regards to the freedom to operate.
These parameters include:
- Impact on industry: whether the invention is relevant to the business of specific companies that may pose a potential IP threat (for new patents), or if specific companies are already infringing on an existing patent (for existing patents).
- Uniqueness: is this an invention that uniquely addresses a need, and for which there is no alternative solution that is more cost effective, more efficient, or is easily replicable.
- Domain: to which domain the invention relates to and what is the maturity of the technology in that domain, i.e. is this an invention in an emerging domain that is important and relevant to the industry, such as AI, blockchain, omni-monetization, IoT, edge computing, and 5G.
- Ability to prove infringement: for if we can’t know and prove that someone is using our patent, its value is likely to be lower.
We score these and other parameters and then arrive at the Amdocs Patent Protection Index (APPPI), the ‘tool’ that supports our quantitative analysis of value.
Based on the scoring of this index we can then look at all the existing patents in our portfolio to determine whether it is worth investing the larger sums to maintain them.
We also leverage this index to evaluate new inventions that are candidates for patent filing, to determine the value they will add to the portfolio – and, of course, to the company.
Aligning to business strategy
By leveraging the unique Amdocs Patent Protection Index, we are aligning inventors, inventions, and patent investments with the Amdocs business and growth strategy.
So, if someone within Amdocs comes to us with an invention that they feel is patent-worthy, we evaluate it based on the parameters mentioned earlier, among others. Then, based on the score it receives we either go ahead and file or we go back to the inventor and present the quantifiable reasons why we cannot go ahead with the filing.
Moreover, we can even provide guidance as to which kind of inventions do align with our business and – as a consequence – our patent strategy.
By looking at patents from the perspective of value vs. quantity and by analyzing the value of patents throughout their lifecycle and as based on multiple parameters, we are finding that for many reasons there are patents that wind up becoming irrelevant to our growth strategy and may – therefore – need to get “thrown away,” so to speak.
In closing, as we see the move from numbers to value in the domain of patents and the portfolio strategies of companies – at Amdocs, we believe that it’s not just about changing mindset. Although, this change is probably one of the hardest.
The key to success with this evolution is to be able to assign a rating to value so that an organization can then prioritize the often expensive, yet wholly strategic business of patents.
If you want to hear more about the Amdocs Patent Protection Index or about our overall patents strategy , I invite you to reach out to me at: Eyal.Felstaine@amdocs.com