State of Innovation

Patents and Innovation Economics

Want to Get More for Your Patent Dollar? Fire Your Patent Review Committee

Most companies that generate enough patents to justify an in-house patent counsel have a Patent Review Committee. The Patent Review Committee determines if an invention described in an “Invention Disclosure Form” is worthy of obtaining patent protection. The committee is usually made up of a business/marketing person, one or more technical people, and one or more patent attorneys. An inventor usually makes a short presentation to the committee based on the Invention Disclosure Form. Here are the top five reasons why Patent Review Committees result in second rate patent portfolios, hurt innovation, and increase legal costs.

1. Patent Review Committees are looking in a rear view mirror.

The Patent Review Committee process forces engineers and scientists to determine when they have developed an invention. Then they are forced to fill out an excoriating invention disclosure form, which in most companies is 5-7 pages long. As a result, the engineers usually have to wait for a break from their regular work before they have to the time to complete the form. This can delay the process for months particularly if the engineer is on a high priority design project. Generally the engineer’s manager does not consider filling out an invention disclosure form a priority. The invention disclosure form is then forwarded to the Patent Review Committee. The committee usually meets monthly or less often. By the time the committee approves the invention as being worthy of patent protection it has been three to nine months since the conception of the invention.  If can take another 3-6 months before a patent application is filed.  In addition, most engineers and scientists are not trained in patent law and poor at determining what is patentable. Having a business person on the committee is an attempt to provide some business insight into patent process, but the initial screening is done by the engineers. Looking in a rear view mirror is a poor way to build a patent portfolio.

2. Patent Review Committees exclude patent attorneys from the development process.

This system seperates the inventing process from the patenting process much like the old product development process divided development from manufacturing. Designers, in the old development process, created the product and then threw it over the wall to the manufacturing group to produce it. This resulted in products that were hard to manufacture. Here the product is developed and then the intellectual property is throw over the wall to the patent department to obtain protection. Patent attorneys often have insight into alternative designs, designs that are more protectable, and can stimulate the development group to consider alternative designs. Patent attorneys are engineers that often have seen a much wider range of designs than engineers working on the product because of the number of patents they review. Companies rarely exploit this insight.

3. Patent Review Committees fail to align the patent portfolio with the company’s business goals.

The engineers who file invention disclosures are not aware of your company’s existing patent portfolio, your competitors’ patent portfolios, your company’s patent portfolio goals, or your company’s long range product plans.  Commonly, most of the people on the Patent Review Committee are not aware of these issues either.  It is impossible for this process to end up with a coordinated patent portfolio strategy.  If you want the maximum return on your money invested in patents, you need a patent portfolio strategy.

4. Patent Review Committees result in patents on trivial inventions.

Inventors immersed in the technology of the company, with little interest in the company’s wider business issues, often dominate these committees.  People higher up in the organization usually consider these committees not worth their time.  When an inventor presents his invention to the committee he is most likely to present an invention that is directed to an interesting technical idea.  The committee will reinforce this behavior, since it is dominated by highly technical people who are less concerned about the company’s business issues.  As a result, the inventions most likely to be approved by the committee revolve around the technical details of the company’s products.  Few of the inventions that are patented by the company will be directed to the company’s strategic marketing, or patent portfolio concerns.

5. Patent Review Committees increase the likelihood that products will infringe other companies’ patents.

Your in-house patent attorneys are most likely to know where the potential patent minefields are in your market space.  Patent Review Committees ensure that these patent attorneys will not know about the direction a new product development effort until it is extremely expensive to redesign the product.  The common response to this concern is that the legal department encourages the company not to search for potentially problematic patents.  The purpose of this policy is to avoid being hit with “willful infringement” damages that can be three times the actual damages in a patent infringement case.  This policy of purposeful ignorance is common in many large companies.  Perhaps this is why many large companies are trying to emasculate the damage awards in patent cases under the guise of patent reform.

Conclusion

If you want to maximize the return on your investment in patents, eliminate your Patent Review Committee.  Instead, develop a just-in-time patent process that involves the patent attorneys in the product development process from the beginning.  Align your patent portfolio goals with the company’s long-term technology and marketing plans.  This will result in a patent portfolio that provides your company with a strategic asset.

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September 1, 2009 - Posted by | -How to, Innovation, Patents, Uncategorized | , , , , , , , , , ,

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