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Every patent department must regularly review maintenance costs

Patent department must regularly review maintenance costs

Patent Department: The most commonly used tactic for an intellectual property department to save money in our experience is triaging maintenance assessment. As the maintenance payment window approaches for each patent, it is essential to consider whether the patent should be kept alive. Regular maintenance review is a common practice, but for companies that have not previously implemented this strategy, 
 
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A full review of patent portfolio information communications, identifying which patents to declare, can be a proactive solution to a one-time inflow of money savings. A judicious and meticulous assessment of which patents to keep and which patents to delete is the hallmark of a strong patent program.

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 A common question we hear is, "How should our company decide which patents to keep and which patents to give up?" There are three main areas to focus on. The first is to identify patents with too limited claims. Often patent claims are so constricted during prosecution that by the time they are issued, they have lost their breadth and do not cover the main aspects of the original invention. 
 
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The second area to consider for abandonment is layoffs within the patent portfolio. Many tech companies will find themselves holding some essentially duplicate patents. For example, a family of five patents may have three key patents, as well as two patents covering, in all respects, very similar aspects of the invention. 

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These two patents could be abandoned without losing much (or already present) of the value of the patent family. The third main area of ​​focus is non-core patents. The information communications patent portfolio of a growing technology company can begin to acquire patents for technologies that are not at the core of their business. This can be for various reasons, including a change in business strategy or the acquisition of patents through a merger or acquisition. In all three of these areas, patents could be filed for surrender, reducing existing costs.

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Consider a hypothetically growing technology company with a modest patent portfolio of 50 US patents. A review of their patent applications can reveal more than 10 patent applications that are narrow, redundant or non-core. For patents approaching the first maintenance period early in life, giving up for a small entity would save $ 6,300 over the life of the patent, and this company would save $ 63,000 if it gave up all 10 identified patents. 

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If the company has more than 500 employees, which many growing technology companies do, they will no longer qualify for small entity status, in which case the cost savings will double to $ 12,600 over the life of the patent and $ 126,000 saved on all 10 patents. These kinds of savings can be directly invested in newer and stronger applications, and no time and cost savings have been taken into account from the ongoing management of the patents throughout their lifetime.

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 However, when conducting a maintenance review, always be judicious about which patents to keep. One thing to consider carefully is the possibility of indirect effects that an asset exit can have on the business as a whole. For example, as your business grows, it will naturally hit the market. This can result in some patent applications being less relevant and therefore becoming ideal candidates to leave. However, keeping a select few can be beneficial because of potential licensing opportunities down the road, or to be ready if the business is down. 

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In addition, our clients have found that the discipline of applying an emotionless assessment under the constraint that they must always preserve something for an undefined future can be very helpful in discovering the true value and quality of any asset being maintained, which is what is important to any IP portfolio value and quality. When wondering whether or not to keep a particular patent, we usually recommend making a mistake on the keep side.

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An important data point in the course of the revision is to keep track of the cost savings on maintenance costs that are maintained each year over the potential life of the patents. By producing a detailed report of maintenance cost savings for the money decision makers, you demonstrate the tax responsibility of your department and convince them to add any lower costs to future budgets.

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