Monday, December 10, 2007

Preparing for the USPTO Rule Changes

The new U.S. Patent and Trademark Office (USPTO) rules for Continuations and Claims (published on August 21, 2007, and currently enjoined pending legal challenge), has caused perhaps the greatest level of consternation in recent memory of rules changes implemented by the USPTO. In addition to the Continuations and Claims rules, the USPTO has also proposed new requirements related to Information Disclosure Statements (IDS), which will cause material changes to the patent practices of applicants and their representatives.

With the admirable goal of reduced work volume and pendency backlogs, and increased examination quality, the barrage of new rules have the practical effect of shifting many tasks traditionally conducted by the USPTO to the applicant (or their representative) and to dramatically increase the management complexity of pending application dockets.

While the final implementation of these rules remains uncertain, many IP owners have taken the opportunity to understand the underlying principles of the rules, and assess how management of their patent prosecution operations can be improved. The new rules are particularly intensive in their demands to cross-reference application-related information. Not surprisingly the IP department’s IAM systems are being challenged to provide the capabilities needed for data and workflow support implicated by the new rules.

At Anaqua we have worked closely with our clients to develop a comprehensive approach to providing the systems support needed to meet the various components of the new USPTO rules—and more importantly to improve the efficiency and effectiveness of patent operations in a new paradigm of application disclosure requirements. In this edition of IAM Perspectives, I provide an overview of some of the ways our clients are using Anaqua’s Integrated IAM Solution to meet and exceed their increased prosecution management demands.

Continuing Applications and RCE Limit

Under the new rules, applicants will be limited to two (2) continuing applications (continuations and continuation-in-part applications), and to a single (1) request for continued examination (RCE), in any application family (unless an exception argument for justification is presented.) In determining which families will be subject to the limitations, an application family includes: original application, continuations, CIPs and RCEs; divisional applications are not subject to the limitation, as they would not contain patentably indistinct claims.

To manage the limit on pending applications, our clients are increasingly relying on Anaqua’s ability to manage the application family through the Create Application and Family Tree view tools. Anaqua’s application creation process automates the process for creating a patent family, including the requirement to define the related application type, all action dates and related correspondences.

Anaqua’s Family Tree view provides a graphical representation of the entire patent family, including the ability to easily navigate between related applications. The Family Tree includes important application information including application number, file date, priority date, and status. In addition, users can also easily run Anaqua’s standard patent family tree report or create a custom report that meets the desired requirements.

The “5/25” Claims Limit

The new rules also impose a limit on the number of claims in a patent application. An application may include up to five (5) independent claims and up to twenty five (25) dependent claims (the “5/25 rule”). If an application does not comply with the 5/25 rule, the applicant must submit an Examination Support Document (ESD), a considerably burdensome disclosure process which will likely motivate applicants to work within the rule except in the most necessary situations.

Anaqua provides a number of features which help automate and proactively manage the 5/25 rule. First, claim count fields for both independent and dependent claims are available, which allow case managers to enter the number of application claims (as well as capture actual claim language, if desired).

To provide automated compliance with the 5/25 rule, the Anaqua Law Engine has been enhanced to automatically monitor the claim number fields, and flag those applications in which the 5/25 rule has been violated. The notifications of these violations can be sent via email or the Anaqua calendaring feature to the appropriate case manager. Also, where an ESD is required, the Law Engine automatically dockets the tasks and associated reminders, including appropriate task manager assignments.

From a reporting perspective, our clients are using Anaqua’s standard and ad hoc reporting toolset to review their application portfolios. Anaqua’s standard claims report provides a listing of all applications and their independent and dependent claim counts. These reports can be reviewed and shared amongst the IP team to ensure rule compliance.

Co-Pending Applications

A critical aspect of the 5/25 rule is its applicability to co-pending applications. The rule is triggered if multiple applications exist which contain at least one patentably indistinct claim between them. In this case, the 5/25 rule will be counted across the related application family. Thus, if at least one claim in a first application and at least one claim in a second application are patentably indistinct, all the claims in both applications are summed to determine if the combined applications exceed the 5/25 rule.

In aiding the examiner’s 5/25 claim count, applicants must identify all commonly owned applications and patents that, (1) have at least one common inventor, and (2) were filed (or claim a priority date) within two months of a filing (or claimed priority date). With regard to the claimed filing or priority date, applicants must be cognizant of the actual filing date and the priority date of both the application being prosecuted, and the commonly owned applications and patents. The identification must be made in a separate filing paper.

In working with our clients, we are finding that the biggest challenge of the co-pending application requirement is the ability to survey applications being handled by different outside counsel. For many of our clients, assignment of drafting and prosecution work is determined by the combination of subject matter and work load. It is common for separate but similar subject matter to be assigned across a group of qualified firms, and therefore causing challenges to identify cases to which the rule would apply.

Within Anaqua, our clients are first relying on the identification of applications with common inventors. Through the standard and ad hoc reporting tools, our clients are able to generate inventor reports which identify applications falling within the purview of the rule. In addition, filed and priority date filters can be applied to focus on only those application which would fit the reporting requirements. In some instances, our clients are using the review process for not only USPTO compliance, but also to reconsider more cost effective assignment of cases to outside counsel.

Also providing substantial benefit, are Anaqua’s Classification tools, such as the IP Review Module. Using technology and UPC classification schemes, Anaqua users are able to easily group and organize related applications, thereby more readily reviewing the portfolio for the possibility of meeting the co-pending rule.

Finally, our clients are relying on Anaqua’s collaboration capabilities to enlist their outside counsel to be more closely involved in reviewing the portfolio for co-pendency issues. Through Anaqua’s security model and access controls, clients are able to allow outside counsel to access and review their assigned application cases.

Retroactive Applicability of New Rules

One important aspect of the new USPTO rules is its retroactive applicability date. Under the rule, applications which have not received a First Action on the Merits on or before the November 1, 2007, effective date will be required to comply with the rules, or file an Examination Support Document (ESD).

To help clients better review their portfolios, Anaqua has leveraged its ability to provide filters to both its Find screens, and standard and ad hoc reports. The reports allow all pending US applications to be reviewed which are not yet “allowed”, and compare whether the rule(s) apply. The report will run with a +/- 2 month window, to compare the filing and priority dates between applications. In addition, many of our clients have also developed their own custom reports which meet the specific requirements of their operations.

Information Disclosure Statements (IDS)

While still pending final publication, the USPTO is expected to promulgate an extensive set of new rules related to the submission of Information Disclosure Statements (IDS). The objective of the rules changes are to improve the efficiency and timeliness of examination by requiring applicants to take a more proactive role in both limiting the amount of disclosure materials and advising examiners as to the relevancy of such disclosures. While the USPTO’s research found that upward of 85% of applications would likely not be materially affected by the changes, the consensus amongst most patent practitioners is that the new IDS requirements will cause substantial adjustment to how the IDS requirements are met.

The new IDS filing rules, as proposed, will include (among other requirements) that an IDS be filed before a First Office Action on the merits, and that the IDS be limited to twenty (20) material, non-duplicative references, with each reference no more than twenty-five (25) pages. For IDS filings after the First Office Action, or which exceed the number or page limits, applicants will be required to provide detailed explanation as to the relevance.

The practical effect is that applicants and their representatives will be more formally accountable for the content and materiality of the references provided in an IDS.

Anaqua provides a number of features to aid with the management of IDS filings, documentation and related references. Each application record in the system allows for the listing of Related Art including applications, patents and non-patent materials. These Related Art references include descriptive information concerning their materiality to the application and other supporting explanation. Importantly, the references will be archived for future reference. Analysis documents, such as a patentability or technology review can also be archived as part of the reference as an electronic Document within the application record.

Another important feature is the Anaqua Law Engine. The Law Engine provides automated docketing of IDS related tasks and reminders, including assignment to appropriate case managers and/or outside counsel. The IDS ensures that the IDS is filed timely (prior to the First Office Action).

For IDS forms and supporting materials, Anaqua provides an electronic Documents repository which allows both PTO filing templates and related Office documents to be stored within the record. The documents can be locked and shared amongst the responsible team.


While the status of the new USPTO rules remain uncertainty, IP Owners and their outside counsel are well advised to proactively assess how their patent operations—and particularly their patent information systems—will support compliance with the rule changes. Anaqua has worked closely with both its clients and leading practitioners to develop a comprehensive approach meeting the USPTO requirements.

Wednesday, September 19, 2007

Planning and Budgeting for an IAM System Implementation

As companies plan for next year’s IAM software deployments, many are challenged with preparing an accurate and adequate budget to ensure project success. While software license fees and other IT costs are obvious budget line items, we have found that organizations often fail to comprehensively address all aspects of a project. It is all too easy to underestimate the financial and human resources required for success. For many IAM teams, the selection and implementation of an IAM solution will be the most complex and expensive IT project they have been directly involved with in their careers to date. And unfortunately IP software vendors have typically done a poor job of working with their clients to create project plans, work estimates and budgets that are accurate and reliable. The result is that in the later stages of a project clients find themselves severely dissatisfied with depleted budgets and incomplete work.

Based on our discussions with leading IP-owning companies, we have identified a set of common considerations that can help guide planning and budgeting for a successful IAM system deployment. In this edition of Anaqua IAM Perspectives, I discuss the key areas that should be included when creating an accurate and reliable IAM solution budget.

Planning, Planning, Planning—and then More Planning

We have found that often the most commonly overlooked area of the IAM project is the planning phase. While most clients understand the need to document basic requirements, project plans and timelines, we find that stakeholder buy-in and change management factors are often underestimated or ignored. A comprehensive planning phase should focus on ensuring that all stakeholders—those who will be heavy users of the system and have strong ideas about how the system is setup—feel that they are directly involved from the very beginning of the project. Failure to secure the input and buy-in from all stakeholders can be a death knell for any large software project and particularly for IAM systems where stakeholders will often be required to make substantial changes to their current processes.

In working with our clients, we find that 20-30% of the budget should be allocated to planning. To address stakeholder concerns, the planning activities will include intensive work sessions with all key stakeholder groups to collect information and input about their IAM processes and expected functionality. Working from these requirements, a “gap” analysis identifies the focus areas for business configuration and any development work required. A collaborative prioritization process helps to set expectations as to what will and will not be delivered, with a detailed description of the final solution.

Fitting Your Operations—Business Configuration

In evaluating alternatives for their IAM solution, companies are becoming wise to the need for a system that has the flexibility to fit their particular IP business operations. The “docketing system” implementations of the late-90’s or early-2000 lacked workflow, data reporting tools and other needed system features. While many of the old docketing system vendors are touting their new “web based” technology upgrades, these new systems do not necessarily mean that the flexibility issues have been addressed—companies are well served to understand the true business configuration capabilities of the different offerings.

The 80/20 rule should guide the budgeting for business configuration of the IAM system. That is, although a significant part of the system needs are common among all organizations, it should be expected that 80% of the value in the new IAM system will be gained from the 20% of the system specifically configured to the client’s operations. This will include areas such as configuring workflow, prosecution rules, notifications, contacts, etc.

Garbage In / Garbage Out – Data Conversion

The old adage “garbage in / garbage out” is highly applicable to an IAM project. Low quality of the data – including bibliographic data, family data and docket tasks—can be the source of very significant risk because ultimately the new system will only be as good as the underlying data. It is common for companies to have accumulated data issues through business acquisitions, differences in staff practices and old systems which were initially installed with poor data. Often we find that migrating to a new system involves not a single data source, but the combination of multiple data sources and data types. For many companies the risk of low quality data in their current systems is a key factor motivating the new IAM system deployment.

We have found that most companies underestimate the effort required to convert data from their legacy systems. A key consideration is whether data will be migrated through an automated program, or if it is more cost-effective to setup the new IAM system using manual data entry. Companies also should consider if more in-depth data integrity checking is required by checking legal status databases.

Build It and They Will Come – Or Will They? – Training and Education

New system projects are ultimately only successful if they are embraced and used. The significant financial and resource investment in implementing the best IAM system possible will not provide the desired Return on Investment if users are unable to easily use the new tools in their work. While being “user friendly” is an important design consideration, with business applications it is important to understand that it is unlikely that the advanced system capabilities will be properly used unless extensive training and education opportunities are provided. In addition, proper training is critical to ensure that data entry and data output are consistent and high quality.

For organizations implementing IAM systems, we find that their training and education budget should allow for a multi-tier approach which supports all stakeholder groups in their adoption of the new system. For core users, we often work with clients to develop train-the-trainer programs which enable a continuing capability for the client to teach users how to use the system. While vendors may provides baseline documentation, sufficient work should be allocated to creating comprehensive documentation that is customized to the client’s specific work policies and procedures.

Experience Matters – Having a Proven Implementation Approach

While a system’s features and functions drive the product selection, the capabilities of the vendor to successfully implement the solution should not be a secondary consideration. For most companies, their new IAM system will be replacing an existing IP docketing application—or a set of multiple IP applications—that over the years has become complicated, confusing and temperamental. The integration of these systems to create a single, unified IP environment is often a driving force behind the new IAM system, as well as the ability for the new IAM system to interface to other legal, financial and business management systems. While the license fee cost is a key budget factor, the initial implementation costs and ongoing vendor support costs are generally several factors greater in total cost during the lifetime of the system.

Unfortunately, many companies have found that their “vendor of choice” lacks the skills and experience necessary to convert from the old IP system to the new IAM solution. The result is not only budget overruns, but often more costly, the project suffers from the lost productivity caused by delayed new system rollout, system errors and additional staff time. Companies should actively scrutinize the vendors to fully understand their implementation approach, and the experience of their clients in working with the vendor. Finding similarly situated references and talking to them about their experience with the vendor is critical, including open and frank discussion about challenged projects. Vendors should be able to offer their experiences in managing implementations through the various risk points and advising the client on how to avoid project pitfalls.


The planning and budget process for new IAM systems requires that project champions be as realistic as possible when requesting the required funding. An IAM system presents a new strategic opportunity to substantially impact the business, going well beyond the old “docketing system” solutions. While each company’s situation presents a different and unique set of issues, companies can benefit by thinking through and considering all aspects of the project.

Fortunately, we’re here to help. Based on our experience, Anaqua can provide assistance in developing business plans for IAM implementations and ensure your planning and budget process are accurate and complete.

Sunday, June 17, 2007

CIP Forum 2007

The Center for Intellectual Property at Chalmers University of Technology held its biannual CIP Forum on May 20-23 in Gothenburg, Sweden. CIP’s Intellectual Capital Management program is building a strong reputation as a center for IAM thought leadership, and the conference certainly reinforced this. The Forum attracted more than 500 delegates, including many of the world’s leading voices in IAM, with strong representation from practicing business and R&D professionals.

The buzz at CIP was around Open Innovation and how IAM can drive value directly to the business—particularly from European organizations, which clearly embrace the principal that IAM is much more then a legal function. This sentiment, however, was not limited to the European delegates. Marshall Phelps, SVP of Intellectual Property at Microsoft, and Ruud Peters, CEO, Philips Intellectual Property & Standards, each presented forward looking views of IAM and its impact on business value. They acknowledged it is necessary to ensure Intangible Assets are legally protected, but this is not sufficient to drive innovation and achieve strategic goals. They went on to state that the real value opportunity is derived by integrating IAM into the innovation process and core business strategy. This sentiment was reinforced by many other presenters who offered a valuable selection of topics on how companies can use IAM to drive business impact.

As a European based conference, it was interesting to find that European companies and thought leaders seem very active and bought-in to the ideals of strategic, business-focused IAM, in many regards more so than US companies. This was reinforced in several ways:

  1. First, in Europe, the opportunity is business-driven IAM – not legal-driven IP. This is a very critical difference, perhaps attributable to the fact that in Europe responsibility for IP decisions traditionally spans multiple business functions, rather than being predominately under the purview of attorneys.
  2. Secondly, we heard less about “patents”, “litigation”, or “damages”, and much more about proactively managing intellectual assets to drive business value. Several speakers announced the end of the era of looking for underutilized IP to license as this was a distraction from developing an IAM core competency in driving innovation and new product development.
  3. Thirdly, the concept of Open Innovation was very widespread – almost every presentation had some angle on the importance of collaborating with partners, suppliers, customers and competitors to increase innovation.

Many Anaqua clients are trying to elevate IAM to a much more strategic, business driven discipline, often involving Open Innovation. The premise is that Intellectual Asset Managment delivers value in two ways:

  1. increases revenue through higher prices for “premium”, IP-protected features, from the ability to sell more units due to a unique feature, or because you can identify and develop entirely new products
  2. improves manufacturing processes with unique innovations and know-how, resulting in higher quality products at reduced cost.

The result of either (1) or (2) is higher margins. If deployment of IAM best practices enables you to increase profitability and growth, it is possible to achieve hundreds of millions or even billions in financial impact.

If IAM is really business aligned, the goal must be to create competitive advantage from innovative products and features and IAM resources should be aligned with this objective.

Friday, February 2, 2007

Portfolio Management

A central tenet of IAM is the ability to create, manage and leverage intellectual assets, and thereby drive tangible corporate value— “tangible value from intangible assets”. As an IAM tool, Portfolio Management (PM) provides a structured approach to understanding a collection of intellectual assets — whether one’s own or a third party’s — and provides the informational basis for the range of asset management activities pursued by companies.

In this edition of Anaqua Perspectives, we discuss IP Portfolio Management (PM) as one of the cornerstones of an IAM program. Most importantly, PM is not limited to certain assets types — such as patents — but applies equally to all intellectual assets including trademarks, domain names, copyrights and trade secrets. We encourage organizations to think of PM as a critical tool to be used across all intellectual asset types.

In working with our clients, we find that while no two organizations define PM in exactly the same terms, for the most successful companies, a set of common approaches and tools drive effective, value-added PM.

First, we consistently find that the best PM practitioners institute a well-structured categorization scheme that enables assets to be classified according to key business characteristics. By assigning each asset to categories, the value context is instantiated in the portfolio, thereby creating the basis for IAM business intelligence (BI). With a categorized portfolio, IAM decisions can be made with a more complete understanding of their business impact. To efficiently categorize the portfolio, the process should be integrated into key steps in the broader IAM process and workflow. For example, categories can be assigned or updated during invention disclosure, the patent review board meeting, foreign filing deadline and annual maintenance review. Automation of these workflows substantially improves the effectiveness of the categorization process.

The categorization scheme should reflect the multiple dimensions of IAM, and allow both hierarchical and unlimited many-to-many assignment to assets. We find that the following types of categories are common among best practice organizations:

  • business organizations / business units
  • budget / cost center codes
  • products / brands
  • projects (e.g., R&D project, marketing project, business development project)
  • technologies
  • keywords
  • SIC codes / industry segments
  • standards
  • licensing status
  • UPC / IPC codes
  • Trademark classes

A second key PM practice amongst IAM leaders is the use of online, collaborative IP projects. In the patent area, these include such activities as offensive reviews, freedom to operate projects and competitive intelligence analyses. Similarly, in the trademark area, these projects include brand reviews, broader mark availability and anti-counterfeiting projects. As a distributed process, PM involves multiple functional areas, business units, geographies, and increasingly, multiple outside parties such as partners and professional service providers. With technical advances in web based tools, a company is able to centrally manage IP projects in a virtual environment, and establish a resource for institutional knowledge of PM activities. We find that best practice companies are able to leverage their IP Project capabilities to better share information and reduce work effort or redundancies often experienced in highly distributed organizations.

To best support PM, the IP project management approach should provide a comprehensive, yet flexible process that can be configured to meet an organization’s PM objectives. In developing their IP Projects, best practice companies consider the following critical features:

  • Linkage between projects and assets
  • Abundant data fields
  • Electronic document management
  • Document retention policy
  • Workflow management
  • Task and activity assignment
  • Contact management (internal / external resources)
  • Asset level analysis / review
  • Categorization
  • Robust project level security

A third best practice for PM is the use of searching and analysis tools to extract IAM business intelligence. In our discussions with leading companies, we find that reporting is often cited as the most critical factor in achieving PM objectives. This includes both internal asset analysis, as well as third party intellectual property rights (IPRs). The use of searching and analysis tools cover a range of purposes including freedom-to-operate (including both patent and trademark availability), competitive landscape / intelligence and operational performance metrics. Of particular note, we are increasingly finding that PM initiatives are driven in part by regulatory compliance related to Sarbanes-Oxley, FASB rules and other assurance related considerations.

In establishing their capabilities for PM searching and analysis, forward looking companies are implementing tools that meet the following requirements:

  • Internal and third party asset data
  • Derived operational workflow metrics
  • Comprehensive text searching
  • Availability of pre-formatted reports
  • Ad Hoc reporting building
  • Export to EXCEL
  • Interoperability with “best of breed” BI tools
  • Access to public and vendor data services

IP Portfolio Management (PM) is a key component in enterprise Intellectual Asset Management. As we work with our clients, we find that implementing successful PM requires consideration of key strategy, process and technology factors.