The COVID-19 pandemic reshaped the business world, forcing a rethink of intellectual property (IP) strategy. With the AI revolution underway, enterprises are racing to launch AI-driven products.

The AI patenting boom is set to eclipse other breakthrough innovations of the century, such as 5G. Patent activity generally follows the hype curve and AI is quickly climbing to the highest levels of buzz.

Companies often oscillate between aggressive patenting and neglect, risking coverage gaps.

In this rapidly changing innovation landscape, agility in IP allocation isn’t just smart – it’s survival. As you move to dominate emerging opportunities, your patent portfolio should be laser-focused on your business strategy over the next several years.

Enterprises otherwise face the risk of missed opportunities in emerging technologies, inefficient resource utilization and reduced competitiveness. To top it all, patents are expensive to get and maintain. Hence, strategic patent portfolio creation demands informed use of the IP budget.

Here are five ways to effectively use your IP budget and thrive in the dynamic business environment.

1. Understanding the Patent Landscape

Companies often oscillate between aggressive patenting and neglect, risking coverage gaps. The first step in effective IP budget allocation involves evaluating their patent coverage to identify areas of under and over-patenting.

Identifying the gaps is crucial to helping you take the necessary steps to ensure the right amount of coverage commensurate with the opportunity in that space.

Enterprises can utilize patent management software that offers one-click patent portfolio views with several filters.

To perform this assessment effectively, enterprises can get a patent landscape study conducted. For instance, such studies can offer white space analysis (areas with fewer patents), suggesting opportunities for innovation or market entry with a reduced risk of patent infringement.

Additionally, enterprises can utilize patent management software that offers one-click patent portfolio views with several filters. For instance, looking at patents around a particular product line, technology, geography and more.

2. Thinking Long-Term

Effective patent portfolio management is more than safeguarding immediate inventions – it’s a foresighted strategy that aligns with your business goals and adapts to market evolutions.

Patents offer a 20-year protection window, making it essential to consider their long-term relevance to current and emerging market trends.

Building a patent portfolio takes time. Patents take years to issue and without purchasing patents, you must dedicate effort overtime to organically build your patent position.

3. Knowing the Purpose of Patent Portfolio

Understanding the ‘why’ behind crafting a patent portfolio is pivotal to preventing finding yourself short on essential patents or sitting on a pile of patents offering low or no value. A great patent portfolio protects your most strategic products that will drive revenue years into the future.

A clear purpose steers resources, focuses efforts and unites the team.

Whether you’re developing a defensive portfolio, aiming for acquisition, asserting patents or licensing them, clarifying your purpose provides strategic focus. This ensures you select ideas that are not only promising but also align with your business goals.

Engaging innovators is vital to a patent program’s success; otherwise, even a well-crafted strategy may fail. Here’s the approach:

Educate: Show them why patents matter.

Motivate: Use incentives to spark interest.

Simplify: Make disclosures easy and intuitive.

A clear purpose steers resources, focuses efforts and unites the team.

4. Selecting Promising Ideas

Zeroing in on ideas with high adoption potential, patentability and business value requires rigorous screening by various stakeholders. At the time of invention, no one knows if the idea you pursue protection upon will be pivotal. Stakeholders can help with the educated guesswork.

A platform that unites inventors, managers and patent attorneys for real-time collaboration and idea refinement is crucial. The patent process can intimidate, but a simple tool does not impede engagement.

Additionally, data-driven insights such as the likelihood of allowance, expected time to allowance and comprehensive cost estimates for patenting are key for informed IP budget allocation.

5. Pruning Your Portfolio

Holding onto irrelevant patents drains budgets and hampers the development of more pertinent ones. Some applications stall at the patent office racking up costs with little likelihood of gaining an issued patent.

Companies often channel their patent budgets into seemingly promising ideas, only to face market indifference, stalled development or mistimed entry. Patents protecting non-strategic innovation drains budget away from innovation more aligned with business success.

If unchecked, patent budgets balloon. Patent maintenance fees, demanded thrice in 20 years by the United States Patent and Trademark Office (USPTO) and totaling around US$10,000 per patent, can consume a significant chunk of these budgets.

Knowing how your patents map to your successful product and where your competitors are with their effort provides situational awareness of the value of your patent portfolio.

Realigning your portfolio with the current IP landscape is crucial in these situations. This might mean pulling out from patent applications in non-performing regions or product lines.

Whether you’re doing an in-house analysis or hiring consultants for a landscape study, the goal is to reinvest resources for better returns. Knowing how your patents map to your successful product and where your competitors are with their effort provides situational awareness of the value of your patent portfolio.

Start by listing all your patents and deeply understanding each of them. Group them into families and business categories before you rank them based on objective measures and other criteria. Shed the low-priority, low-value patents and applications.

Trim patents that don’t align with your objectives. Unsurprisingly, over 85,000 patent applications were withdrawn or abandoned in the United States alone in 2023. No garden will thrive without pulling out the weeds.

Parting Thoughts

Patents are more than just legal documents; they reflect your company’s innovative spirit and strategic foresight. The choices you make today in allocating your IP budget will echo through the corridors of your industry tomorrow.

It’s not only about avoiding the pitfalls of over-patenting or underutilizing resources; it’s about seizing opportunities in emerging technologies and staying ahead in a competitive market.