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ABSTRACT

This paper reviews the process of using a main corporate business plan to define secondary business plans for an Intellectual Property (IP) legal team or “IP Group”.

Many times, corporate business planners simply provide a list of goals with no further definition. Because these planners often set these goals by departments, they overlook the needs of groups that are involved with multiple departments such as the IP Group.

IP leaders must develop techniques to derive tangible projects from these company goals. This becomes an ongoing process because, as most of us know, plans tend to change as customer needs shift and a new fiscal year begins.

Every company will experience the changes induced by a variety of external and internal factors between planning cycles. This is a fact.

In this paper, we will review ways to minimize impromptu shifts (often called scope-creep) by adopting solid project planning techniques.

This information is useful for any enterprise who has a good business plan but wants to extract goals from it that are related to IP requirements.

INTRODUCTION

As part of the business planning process, there is usually a section created in the final plan document showing a well-organized list of projects whose successful completion is essential to meet the overall company goals in the upcoming fiscal period.

Many of these projects are often related to meeting new customer requirements, increasing sales, controlling inventory, financing, building departments, setting up new processes, streamlining existing processes, designing new products, and creating new services.

A careful review of projects and aims tells a lot about a company, especially if the company has prioritized their work plans. Using this information to set up an IP Portfolio Strategy is often the best place to start for companies who have no other IP in house than their trademarked “name on their back”.

Please note that starting any project plan without putting customer requirements near the top of the list has a high risk of failure.

When an IP Group develops a plan, realize that are many methodologies available, but starting any project plan without putting customer requirements near the top of the list has a high risk of receiving a minimal return on investment.

Rapid deployment is essential. Get your team going on the things that will allow people to move quickly while always keeping the customer in prime focus.

Don’t waste resources, but rather focus them and pull toward a common goal. Of course, these items are a lot easier to talk about than do. Let’s get started.

INDENTIFYING PROJECTS

When an IP Group begins picking apart a business plan to find pertinent projects there are many areas of potential confusion. This is because most companies define their business plans to address things affecting profit and loss, not reducing the long-term risks that are important to IP Groups.

To perform a quick take on developing a first IP Portfolio, obtaining two documents is essential.  One is the Project List mentioned above and the other is a current “Product/Service Revenue Contribution List”.

Better yet, if the business plan holds information about the expected revenue contributions of new products/services planned for the coming year, be sure to get a copy of that as well.

Next, take the project list and divide it into three sections, one for product-related projects, one for service-related projects, and one for projects that improve the company’s internal operations.

Then take the product and service revenue information, combine them into one list, and sort the data by decreasing revenue as predicted in the next fiscal year.

ORGANIZING AN ANALYSIS

At this point you must meet with Sales & Marketing (or their executive) and show the life cycle position for each of the products and services on the revenue contribution list.

Code all products/services that are new (no established sales yet) the same to flag that they are in the “Introduction” stage of their life cycle for next year.

Figure out a weighting factor for each important life cycle stage for each of the products/services. Do this by using a scale corresponding to at least four of the standard phases:  Introduction, Growth, Maturity, and Decline.

Code each phase with a corresponding weighting factor with a result like “8-6-3-1”.  The allocation of the weights will depend on your company’s view of IP. The IP Group needs to get a good handle on this, possibly with an inter-departmental team.

At this point you will need to confer with company executive management as to the importance of each life cycle from the angle of solely considering IP.

Most executives understand how much time it takes to set up an IP portfolio, especially in patents and often choose to weigh very heavily in the areas of introduction and growth and may suggest a weight series like “10-8-3-1” for the life cycle phases.

GRAPHICAL REPORTING

Next, create a pie chart. Arrange it to illustrate each of the products/services in the Revenue Contribution List to show how the revenue contributions compare.

These charts normally either come out as “clumpy” with groups of products having similar revenue contributions or evenly distributed with each having about the same revenue contribution.

In the case of clumpy groups on the chart, distribute each to a group 1, 2, 3, Etc. (not more than 5 groups). Apply a weighting factor to each general revenue level with the highest weighting factor applied to those in the largest revenue group and the lowest weighting factor in the smallest revenue group.

If the report has split the revenue estimates evenly between all the products/services, give them all the same weighting factor, say a 2.

WRAPPPING UP

The final analysis step is to multiply the life cycle factor for each product/service times the corresponding revenue factor and sort them by descending numerical result. The product/service table then becomes a priority list that provides a value that shows which product/service to consider first when making determinations about IP.

In other words, start at the top and work your way down the list. For the product/service at the top of the chart, look at any technology that makes this product/service better than what the competition offers.

A competitive analysis focused on industry peers is well-known to most departmental groups. However, there are situations where you may have to seek out someone who is close to the product, either on the Sales side or the Product Development side of the business to get answers.

Once you have documented the competitive advantage reasoning, an IP expert will be able to provide advice as to what type of IP coverage is most important for effective IP protection. Areas involved should include patent, trademark, copyright, and trade secret protections.

Once you make the IP protection determination for each product & service on the list, it becomes an internal decision as to how much budget to distribute to each entry.

Sometimes there is only enough budget to provide for the first 2 or 3 items on the list. Then the IP portfolio creation begins on those items. At other times (especially with lower cost copyrights) there may be enough budget to address all the items at once.

PORTFOLIO PLAN

From the decisions above, create a portfolio plan that includes the areas of coverage, extent of IP used, and time needed to get each item into the portfolio. It is normal for the structure of an IP portfolio to vary widely from company to company.

For example, a market research company may seek trademark protection for each of its main “top running” services and copyright protection for its most popular analysis reports.

A computer design company may obtain patent protection for its newest products and copyright protection for its administration manuals and diagnostic formats.

An accounting company may patent its customer profiling process, trademark the names of its two largest service offerings, and copyright each standard P&L statement.

This approach is highly effective whether you have no IP portfolio or need to pare down and re-focus an existing IP portfolio.

LIMITATIONS

The most important concept to remember is that budget restrictions will limit IP protection. Therefore, the IP Group should concentrate coverage on areas that are most critical to protecting revenue and controlling competitors where needed most.

There are few things that waste more resources than an ill-conceived IP portfolio (legal expenses can easily get out of control). Just its maintenance charges can weigh down an organization and divert attention from where a company needs protection the most.

Keep in mind that a large IP investment is not purely a tangible asset and therefore not “something you just have to have”. Often, a small IP portfolio can be quite adequate to protect a business.

Further, a company may outsource the ongoing maintenance of a small, well-focused IP portfolio, and update it on an annual basis. The company then focuses on basic coordination of portfolio updates using an outside service with each new business plan draft.

PROCESS FOCUS

Below is a diagram of the process areas that take part in setting up a project focused patent portfolio that provides the best benefit for an enterprise. The information previously covered involves active participation in the areas shown on the diagram.

Of course, if IP issues expand enough to require the participation of more groups, the process interactions will increase accordingly.

• Project Backlog
• Sales and Marketing
• Product Revenue List
• Product Development

CONCLUSION

A company can best achieve building a first IP portfolio plan from a business plan using an organized process that they may repeat in every planning cycle. The IP Group should always work from a master project list and keep it updated.

Assign someone to keep track of each product and where it is in its life cycle. Phase out support for IP related to products that are nearing the end of their life cycle. Keep new products high on the IP submittal list and then give the most resources to them.