Growth-stage and middle-market companies in highly competitive market segments such as aerospace, transportation, technology, industrial systems and communications need to aggressively innovate in order to stay competitive.

Firms that yesterday were engaged in one business segment now find themselves competing on multiple emerging fronts, especially as the advent of the Internet of Things (IoT) and Near-Field Communications (NFC) now make it possible for nearly any device to become intelligent and interconnected.

As a result, industries such as automotive, aerospace, transportation, industrial automation and electronics are experiencing a rapid shift as specifiers increasingly view intelligent components as part of a comprehensive smart system, and the integrators of those smart systems now wield enormous power. At the same time, components that are not part of the smart environment have become commoditized so that the market is rapidly bifurcating, placing longstanding players in a challenging position.

In the midst of this shift, innovative enterprises need to grasp and wring maximum impact out of their intellectual property (IP) portfolio. IP can often represent the greatest potential new value to a company’s growth, market position, operational resilience and overall enterprise value.

The challenge facing most firms is that IP has historically been viewed as a passive set of assets encompassing patents, trademarks and other ‘paper’ recognition that is filed for, secured, occasionally defended, but otherwise stored away.

In reality, IP is far more powerful as an active, strategy-driven resource that is at the heart of the firm’s competitive strategy. To understand this further, let’s explore a set of fifteen questions we can use to assess a firm’s readiness to identify and exploit its IP capabilities:


Middle-Market Intellectual Property Strategy Self-Assessment Questions

How many of the following IP components are actively discussed in your firm’s business plan or current operating strategy?

  • Patents
  • Trademarks
  • Copyrights
  • Design rights
  • Contracts
  • Trade secrets
  • Market position
  • Business reputation
  • Brand equity
  • Customer loyalty
  • Business relationships
  • Proprietary business processes
  • Market research data and knowledge

2. How many of these IP components are given a financial value and are measured or evaluated on at least a quarterly basis?

For example, some firms use the Net Promoter Score (NPS) as a management tool to quantitatively evaluate and measure the value and strength of customer loyalty as a business asset.

3. Which of the following strategic objectives are active business priorities being addressed by ownership or the executive leadership team this year?

  • Protecting and enhancing existing product offerings
  • Development of new product lines based on existing technologies
  • Development of new product lines based on emerging technologies
  • Licensing of technologies or innovations from other firms
  • Licensing of technologies or innovations to other firms
  • Strengthening brand position and market competitiveness
  • Defending against commoditization and price competition in the market
  • Responding to the threats posed by consolidation and M&A in our market
  • Preparing for a transition of ownership or for a transition to public markets
  • Evaluating the value and potential of product and technology portfolios in order to potentially buy, license or sell various components

4. Have you performed an intellectual property inventory in order to formally identify, list, quantify and manage your IP assets?

5. Does your research and development (R&D) program presently incorporate any or all of the following components:

  • Our researchers/engineers are encouraged to describe new innovations in a formal process that we can use to chart and identify emerging IP.
  • Our researchers/engineers are trained in the procedures for documenting emerging innovations for IP purposes.
  • Our researchers/engineers have formal agreements with the company that address inventorship strategy, IP ownership and licensing rights with the firm.
  • Our researchers/engineers meet regularly (at least 4-6 times annually) for working sessions on IP strategy.
  • Our research/engineering department includes a formally established Innovation Development Team or group that leads our IP efforts within R&D.
  • Our researchers/engineers receive ongoing training and continuing education around IP strategy and identification.
  • Our researchers/engineers participate in a formal invention or information disclosure process.
  • Our researchers/engineers are experienced in IP valuation and licensing and/or are supported by an executive or consultant who performs this function.

6. Is there an identified member of the company’s executive team (i.e. a C-level executive) whose formal professional responsibilities include serving as a liaison for IP strategy and development?

7. Has the firm performed an audit of all contracts and are they managed through a centralized contract management program?

These would include contracts with suppliers, vendors, partners, customers, licensing entities, employers, researchers, etc.

8. Does the company clearly identify all employees who are parties to intellectual property and implement appropriate legal and technological safeguards to protect against the loss of these assets through these personnel?

This applies not only to patentable developments but also to brand assets, customer lists, proprietary processes etc.

9. Is the firm currently engaged in a formal competitive analysis or competitive intelligence program on an ongoing basis?

These initiatives typically include market research, digital competitive tracking, customer feedback on competitor perceptions, etc.

10. Has the company retained outside IP counsel to perform a comprehensive landscape and whitespace analysis within the last two years?

11. Have efforts been pursued to place a formal financial value on the firm’s IP assets and have any been licensed or sold in the last three years or is licensing or sale of IP assets a business strategy of interest to the firm’s leadership/ownership going forward?

12. How does the company assess and manage risk in its business and operations, and is IP comprehensively addressed as part of the risk management strategy?

13. Does the company maintain a structured portfolio management program for tracking and strategically leveraging its IP assets?

14. Which of the following software applications or database technologies are currently utilized either by the enterprise or on its behalf by counsel, to manage IP activities and operations?

  • IP Portfolio Management
  • Competitive Intelligence
  • Brand Asset Monitoring
  • Information Disclosure
  • Docket Management
  • Document Management
  • Patent Tracking
  • Trademark Tracking
  • Renewal Management
  • Contract Management
  • Knowledge Management

15. What is the current status of your IP counsel and consulting activities?

  • We maintain a full-time In-House Counsel dedicated specifically to IP (i.e. a Chief Intellectual Property Officer)
  • We maintain a full-time In-House Counsel who manages our overall legal responsibilities, one of which is IP.
  • We maintain a full-time In-House Counsel who regularly retains third-party firms and outside attorneys to assist with IP matters.
  • We maintain a part-time In-House Counsel who makes decisions relating to IP strategy, including when to bring in outside counsel or consultants.
  • We’ve worked with intellectual property (IP) or intangible asset (IA) consultants to evaluate and manage our portfolio.
  • We’ve worked with intellectual property (IP) or intangible asset (IA) consultants to place a value on part or all of our portfolio.
  • We work with business attorneys on an as-needed or project/base/matter basis only.
  • Working with regular IP counsel or consultants is a new concept for us.

Key Takeaways from the IP Self-Assessment

There are some essential and notable points embedded within the questions we just reviewed. For product-driven technology enterprises as well as other innovation-based businesses, five of these essential takeaways include the following:

  • Scope: IP assets encompass far more than what we commonly think it does. The firm’s intellectual property includes not only patents and trademarks but also brand equity, customer loyalty, proprietary processes and more. This means that IP strategy needs to consider each of these components as well.
  • Strategy: IP strategy represents enormous value to the enterprise, but this value is often dramatically untapped or underleveraged. That’s why it’s essential that IP strategy be directly ‘baked into’ the company’s overall business strategy, its go-to-market strategy and its product development strategy.
  • Leadership: IP requires leadership, and leadership begins with a dedicated or appointed executive team member who serves as the IP strategy liaison. In addition, key line executives in areas such as engineering, product development, marketing and more need to become educated and engaged fully in understanding and working with IP as a strategic asset.
  • Process: IP development and management should be directly addressed across key business processes including those in engineering/R&D but also in many other areas of the enterprise. Sales contracts, employee recruitment and retention, asset valuation for financial decision-making and risk management for investors or insurers are all impacted directly by effective IP management processes.
  • Tools & Teams: IP assets need to be regularly identified, evaluated, audited, tracked, reviewed and protected. This requires the right tools for the job, some of which include software applications and databases, as well as a team consisting of legal, technical, financial and strategic counsel to ensure that IP assets are managed proactively and effectively to drive business value.

With these five essential takeaways in mind, CEOs can become conversant with the overall value that IP strategy can play in business strategy and direction. IP-aligned enterprises are more valuable, more resilient to market forces, and more successful during periods of market transition or marketplace innovation.

The time to begin assessing and developing your IP strategy is today so that your enterprise can identify and exploit the value of your IP across the different components of your growth and direction tomorrow.

-Michael Dilworth 

This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. The opinions expressed in this article are those of the author only and are not necessarily shared by Dilworth IP, its other attorneys, agents, or staff, or its clients.