Guest book review: Patent Management

Gustavo Schötz, Professor at the Intellectual Property Center, Universidad Austral, Argentina, and consultant at Schötz & Viascán, kindly reviews Patent Management – Protecting Intellectual Property and Innovation for us:

We have before us "Patent Management – Protecting Intellectual Property and Innovation", the first English edition of the "Patentmanagement", published in German in four editions, including frequent updates. 

Legal advisors often find that there seems to be a language barrier with managers of various organizations (their clients), when decisions must be made regarding the registration of patents and other intellectual property rights (IPR), or when legal action must be taken for infringements. Even more so when the fillings or procedures are cross-border and the costs increase. Although globally active organizations have already assimilated the strategic use of intellectual property, there is still a lack of understanding of the who, why, what, how, and when of protection within the framework of the company's competitive strategy. Facilitating this understanding and decision making seems to be the goal of Patent Management. How to make reasoned decisions that justify the associated financial flows? Only an explicit and assumed strategy can justify the financial consequences of IPR decisions.

The authors are well-known practitioners with strong academic links. Prof. Dr. Martin A. Bader (Technical University of Applied Sciences Ingolstadt/Munich, Germany; WIPO Mediator, iam strategy 300 and former CIPO of Infineon Technologies), Prof. Dr. Oliver Gassmann (University of St.Gallen, Switzerland’s major business school and former VP R&D and Innovation Schindler Group), and Dr. Mark James Thompson (PhD graduate from the famous Swiss ETH University and specialist in patent quality and IP data statistics at IP Australia). This dual role of intangible asset management and academia makes the book of special interest to those in charge of managing portfolios of IPR, especially patents. In fact, the book illustrates the theoretical structure on the management of intangible assets using numerous practical cases, more from a business perspective than from legal practice.  

The overall result is a well-structured set of valuable managerial insights into patent management from a practical perspective while analyzing of the most important current industry sectors and new technologies across the world. They provide an overview of the common concepts and building blocks of patent management. 

Chapter 1: “Fundamentals of Intellectual Property Rights”, provides on introductory overview of the main intellectual property types and establishes the authors‘ mantra and mindset, i.e. creating value by generating innovation and capturing value by protecting innovation.

Chapter 2: “Protection Strategies” is the chapter of the "chess players of intellectual property". A successful patent strategy must fit with the corporate strategy. The main forms of patent strategies are examined: preventative, defensive, offensive. It discusses both offensive and defensive patenting and looks at the core actions: value multiplication; differentiation; and freedom to operate. This chapter also delves into the various costs associated with these actions. Moreover, it looks alternative strategies to protect innovation that do not involve intellectual property rights; these include strategies such as first-mover advantage, or secrecy. 

Chapter 3: “Evaluating and Valuing Patents”, a structured procedure for the evaluation and selection of patents as well as a continuous review of the patent portfolio are indispensable for cost-benefit optimization. Various qualitative and quantitative evaluation methods have been established for the evaluation of patents. This is undoubtedly the most complex chapter for lawyers, but it will delight economists.

Chapter 4: “Successful Practices in Commercializing Patents”, the typical motives and various forms of patent commercialization are explained. This chapter looks at in-licensing, and cross-licensing to protect the company’s own products and processes ensuring freedom of action. It also looks at avenues for added value through external commercialization by spinning-off, by means of joint-venture, licensing, or selling the company’s own patents.

In Chapter 5: “Organizing Patent Management”, the authors suggest various internal organizational choices, such as establishing a separate patent department, or directly integrating patent activities into the business sub-units, must be done according to the objectives of the patent management. Alternatively, it is also possible to outsource service provision. From my point of view, the recommendations are useful, because a poorly organized intellectual property area (or its absence) or internal bureaucracy generates transaction costs that make one lose sight of the strategic value of IPRs. Hence, the organization of the IP department must include the relationship with the other areas of the company.  In authors words, “some patent departments act as censors and inhibitors rather than as catalysts of innovation”. However, since these recommendations are made based on the experience of large organizations, we must be aware of the timing required to organize the area in relation to the maturity of the company, so that it does not become a disproportionate effort and that "the collar is more expensive than the dog". Therefore, the reader should adapt the recommendations to the needs of his or her own company, considering, especially the organizational culture.

Kat Management

Chapter 6 and 7 are probably the pulp of the book, also in terms of density of insights: “Patent Management by Industry” and “Patent Management in New Technology Environments”, delve into the peculiarities of different industry sectors with examples from the pharmaceutical, chemical, crop-science, life-science, and consumer goods industries, as well as from electrical engineering & telecommunications, automotive & mechanical engineering, nanotechnology, computer science, financial services & fintech, and the transport & logistics industries, also touching specifics with regard to Start-ups & SMEs. Chapter 7 looks at technological fields that are on the rise, fields such as biotechnology, nano-technology, industry 4.0, software, artificial intelligence, and the blockchain. From a joint reading of both chapters, while IPRs are homogeneous regardless of technology or even relatively uniform considering territories, there is no "one size fits all" strategy. Each of the industries mentioned has its own particularities. The authors provide the fundamental strategic concepts of each of them, but further elaboration will be required for those who wish to focus on anyone. However, the complete picture they provide and the benchmarking tools they provide should be highlighted.

The book finishes with “Useful Information for Practitioners” in chapter 8.

The overall result is a text (or even a roadmap) that facilitates the understanding and implementation of the process from basic research and innovation to the protection and monetization of the resulting rights, as an integral and indispensable part of the competitive structure of an organization and its environment. Although it seems to focus too much on patents, it also shows the "big picture" of a strategy that must not forget the interaction and even overlap between the various IPR. From this point of view, legal resources must be considered as available tactics for the strategy assumed by the organization:

Looking beyond just creating high performance R&D organization, protecting the outcomes of those innovation processes legally with intellectual property has thus become a central part of innovation management. Only those firms, which can effectively protect their innovations from competitors can retain their competitive advantage; and the costs of acquiring and managing those rights are minimal compared to the opportunity cost of not maintaining them.

This English version of Patent Management is an excellent tool for those who aim for professional and planned management of the intangible assets of companies and other organizations, such as public research institutions. It helps to understand how decisions on innovation and protection of intellectual property rights are made. The recommendations consider the flexibility needed to manage intangible assets, heavily dependent on the competitive environment, the industrial sector, and the idiosyncrasies of the organization. Examples and suggested tools for portfolio management are also practical and accessible. The authors' analysis extends to the entire process, from innovation, valuation and registration, open innovation platforms, cross licensing, and possible litigation, among other topics.

In a few words, the book is a very good resource for the managers of companies and other innovative organizations, so that they can properly manage the results of the R&D processes. Readers may be executives in the areas of innovation, R&D, patents, and intellectual property management as well as academics and students. I believe it is especially useful for lawyers who must interact with the boards or directors that make protection or investment decisions, since dialogue is not always easy between those who must advise and those who must decide on matters related to intellectual property rights. 

Springer International Publishing 2021

Hardcover €80.24 | CHF88.50 | £64.99 | $89.99 

ISBN: 978-3-030-59008-6