How to Launch A Patent Portfolio: 7 Strategic Steps

We’ve previously discussed the various reasons to consider seeking patent protection and the value of patent applications.

Building a patent portfolio is a valuable and essential investment for any tech company: a comprehensive portfolio can help your company expand and diversify revenue streams while developing meaningful protection for core intellectual property (IP) assets.

What constitutes an effective patent portfolio development strategy will depend on your company’s individual needs. Large companies with significant resources can easily hire scores of patent attorneys and fund an exhaustive, high-volume patent program.

But if you’re a startup with limited capital, you need an efficient and cost-effective strategy focusing on quality patents that are aligned with your business objectives.

What Are the Goals of a Strategic Patent Portfolio?

When we help our clients develop a strategic patent portfolio, we’re thinking beyond simply protecting a specific invention. Here’s a quick summary of some of the long-term goals of a strategic patent portfolio:

1. Obtain Comprehensive, Exclusive Coverage

You can protect a broad class of products and services by covering the current invention and future/alternate embodiments.

You can also protect all the different aspects of your product or service. For instance, there might be a software component, an electrical component, manufacturing aspects, and so on.

2. Generate Revenue

Because patents help you exclude competing products, you can gain access to licensing and cross-licensing opportunities, or sell your technology at higher profit margins.

3. Gain Negotiating Leverage

In the face of competitive obstacles, you can suggest cross-licensing or a partnership as alternatives to going through the costly patent litigation process.

4. Build Up Defensive Measures

Your patent applications serve as a public record of your exclusive rights, which could deter competitors from encroaching on your turf.

How to Launch a Strategic Patent Portfolio

So you want to launch your patent portfolio — but you’ve never run a patent program before and don’t really know where to begin.

Get started on building an effective strategy that’s well-aligned with your business objectives by following the steps below.

1. Identify Your Business Goals

Your business goals will guide your patent portfolio strategy in the long run by determining which benefits of patent protection your company has the most reason to value.

To identify what your business needs, ask yourself if you’re looking to:

• Protect your business’s core technology
• Increase revenue streams through licensing
• Maximize your profit margins
• Block specific competitors from a field of use
• Reduce the risk of being sued by competitors

A clear statement of your business goals will inform several important aspects of your patent strategy, such as:

• The geographic scope of your filings
• The technical scope of your patent disclosures

For example, if you’re primarily developing a patent portfolio for defensive reasons, you wouldn’t typically need to direct significant resources towards pursuing foreign patent protection. 

2. Set a Budget

If you’re not prepared for the financial commitment, filing patent applications can quickly drain your limited resources.

Companies often look at their patent budget as a percentage of their research and development (R&D) budget. Relative to other companies, “IP-centric” or high-tech businesses who consider their patents a core asset will typically commit a higher percentage of their R&D budget towards patent protection.

When you’re launching a portfolio, you can set a budget by estimating the number of patent applications you plan to file over the first year or so, and then multiply that by the approximate cost of a typical patent application. 

3. Complete an IDR for Each Valuable Idea

Next, you should compile a list of ideas you may want to patent, and then complete invention disclosure records (IDRs) for each of those ideas. IDRs document your employees’ company-related innovations, and can be used to establish your company’s ownership over its IP.

The list that you compiled, together with the IDRs that you draft, comprise an initial pool of innovations that you can potentially protect through your patent program. 

4. Sort the IDRs According to Priority

Typically, only the most valuable IDRs become patent applications. To determine if the innovation outlined in an IDR is commercially viable or otherwise worth protecting, ask yourself the following questions:

• Which of these ideas are best aligned with your business goals?
• Which ideas are “mature” and which are half-baked?
  • Is the product under development? 
  • If yes, what’s the timeline for completing development?
• Which embodiments are most likely to be competitive in the market?
• Which ideas are most likely to be patentable?
  • How much prior art exists for the invention?
• Which ideas are competitors most likely pursuing?
• If a patent is issued, how difficult would it be to enforce?
  • If a competitor infringes your patent, would you be able to find out easily?
• Would trade secret protection be a better option?

5. Identify Any Filing Deadlines

Are you planning to disclose any of your ideas outside the company soon? For example, you may have an upcoming product launch or a fast-approaching public presentation.

In these cases, you may want to protect your IP by securing an early filing date, even if it’s simply by filing a provisional patent application.

The best practice is to file patent applications before any type of public disclosure, public use, or commercial activity (e.g., sales or offers to potential customers). Although some countries offer a 1-year “grace period” that allows you to file patent applications within one year of a public disclosure, you should never rely on that as a strategy. That’s because utilizing the grace period in the U.S. incurs additional risks, and other important jurisdictions (for example, Europe) don’t recognize the U.S. grace period. 

6. Estimate Your Filing Costs

To ensure you’re staying within budget, you’ll want to estimate the cost of each patent application you plan to file.

For one, does a provisional or non-provisional application make more sense at this time? Provisional applications involve lower filing fees and fewer formalities, but will not mature into an issued patent without a non-provisional application being filed within 12 months.

For another, will your invention benefit from international patent protection? If your technology is relevant to a foreign market, you’ll want to take reasonable steps to protect your IP. But keep in mind that you’ll need to budget an additional $30,000–$50,000 per country over the life of the patent.

7. Create a Filing Calendar

Using the budget, order of priority, and filing deadlines you established earlier, build a filing calendar to keep track of all important dates related to your patent portfolio.

If you’ve partnered with a strong patent lawyer, they can help you to develop and execute your patent strategy on schedule.

Figuring Our Your Filing Costs and Deadlines

Building a comprehensive, cost-effective patent portfolio is an important foundation for ensuring long-term business growth.

Still struggling to get your patent portfolio moving forward? To help you establish a budget and timeline, we’ve put together a free infographic detailing the cost of each stage of the patent process. Download it now!