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.