The document outlines a plan for a Chief Intellectual Property Officer to strategically manage a company's intellectual property. It recommends forming a patent committee to make IP decisions and develop an IP budget. The plan details strategies for building an exclusionary patent portfolio, ensuring freedom to operate by clearing products of IP barriers, policing competitors, and managing relationships with investors and licensees. The goal is to create company value through the strategic use of intellectual property.

1. Plan for the Chief Intellectual Property
Officer
Creating Company Value through Strategic Use of IP
John Storella
www.johnstorella.com
Intellectual Property Services for Innovators in Biotechnology

2. Plan for the Chief Intellectual Property Officer
Creating Company Value through Strategic Use of IP
I.
Be proactive
Because he who hesitates is lost!
II.
Patent Committee
Purpose: To have a body to make strategic decisions regarding intellectual property
A.
Set up a Patent Committee
1.
Membership: Persons who have a stake in, and can meaningfully
contribute to, decisions regarding intellectual property: CEO, CTO/CSO, VP of
R&D, Chief IP Officer
2.
B.
Convene Patent Committee monthly
1.
C.
Consider also: CFO, GC, VP of S&M, outside patent counsel
Make decisions on strategic IP issues
Develop a reasoned IP budget
1.
Patent Budget

2.
FTO Budget

D.
Spend money building the portfolio until the next dollar spent would
create more value if spent elsewhere
Spend enough to perform initial searches on each product and a semiannual update
Create IP savvy among employees
1.
Present periodically about IP issues to raise awareness: Reporting
inventions, maintaining confidentiality, record keeping
Intellectual Property Services for Innovators in Biotechnology

3. Plan for the Chief IP Officer
E.
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Make core forms available to Company
1.
Employee invention and confidentiality, assignments, invention
disclosure forms, third-party confidentiality agreements
III.
Exclusivity Strategy
Purpose: To advance an IP portfolio that provides meaningful exclusionary power in the
Company’s markets
A.
Identify Company’s technologies
1.
Meet periodically with Patent Committee and technology groups to
uncover new technologies and solicit invention disclosures
B.
Evaluate technology value in context of business
1.
Identify customers, markets and products
2.
Identify Company’s competitive advantages embodied in technology,
software, brands, designs
3.
Assign a relative value to each item of IP

Protects product features that provide competitive advantage
(1)
Excludes competitors from market
(2)
Excludes competitors from attract product features


C.
Monetization potential
Usefulness as a bargaining chip with competitors
Patent Strategy
1.
File early (first to file – use provisional)
2.
Breadth of filing reflects location and size of markets and competitor
locations
3.
Accelerated examination of important patent applications
Intellectual Property Services for Innovators in Biotechnology

4. Plan for the Chief IP Officer
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4.
Portfolio, as a whole, consistent with budget and marginal value of
next application
D.
Trade Secret Strategy
1.
Maintain as trade secret any technology that is easy to design around
and difficult to patent broadly
E.
Publication Strategy
1.
2.
F.
File patent application before public disclosure
Publish material to prevent patenting by others
Brand Strategy
1.
File trademark applications that cover brands of high-value

Company name

Major product lines

Major products
G.
Continually and iteratively reevaluate exclusivity strategy in view
of evolving business goals
1.
At first, file frequently to cover technologies
2.
Later, be brutal in abandoning applications or pruning patent families
that no longer contribute to business value and/or can no longer be
supported by the patent budget
IV.
Enforcement Strategy
Purpose: To police the Company’s IP to protect value
A.
Identify competitors that are significantly cutting into market
share
1.
Determine whether and when to assert IP through licensing or
lawsuit, weighing cost, distraction and chance of success
Intellectual Property Services for Innovators in Biotechnology

5. Plan for the Chief IP Officer
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B.
Identify third parties that can expand the market for your
Company’s IP
1.
Out-license your Company’s IP to the third parties on reasonable
terms
V.
Freedom to Operate Strategy
Purpose: To anticipate and neutralize, in a cost-effective way, third-party IP barriers to entry
A.
Clear products and services as they pass through gates:
1.
Concept, feasibility, development, production
2.
Continually reformulate FTO searches in view of changing product
developments
B.
Perform FTO analysis
1.
Divide the product or process up into functional components or steps
2.
Perform FTO on each component or step to identify any third-party IP
that poses a barrier to entry
3.
Tier third-party IP according to its relative threat level


Pending patent applications that, if issued, would require further
analysis – keep on watch list

C.
Issued patents that requires further analysis
Patents in technology area to avoid
Develop a cost-effective neutralization strategy
1.
2.
D.
Design around/license/prepare for litigation (not infringed or invalid)
Challenge third-party applications or patents where feasible
Periodically update FTO searches
Intellectual Property Services for Innovators in Biotechnology

6. Plan for the Chief IP Officer
E.
VI.
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Recognize other barriers, such as single suppliers, label licenses
Licensing Strategy
Purpose: To obtain licenses under terms that maintain a healthy gross profit and to license
patents useful against competitors
A.
Exclusive licenses are part of the exclusivity strategy
1.
Be opportunistic in acquiring third-party IP (through license or
purchase) that will give the Company a competitive advantage
B.
Non-exclusive licenses are part of the FTO strategy
1.
Take necessary licenses when you commit to product development
Royalty burden comes off the top line, so it must be small enough
for a healthy gross profit
C.
VII.
Competitor Strategy
Purpose: To identify Competitor’s strengths, opportunities and threats in the IP arena
A.
Identify main competitors in your markets
B.
Consider their product offerings
1.
Coordinate your exclusivity and enforcement strategies to create
barriers to entry into your markets, whether or not competitors use
technologies that you are using in your products
C.
Analyze their patent portfolios
1.
Coordinate your FTO strategies to neutralize their roadblocks
2.
File patent applications to competitor’s technology as a
deterrent/bargaining chip
3.
Challenge their patents if necessary

US, Outside US
Intellectual Property Services for Innovators in Biotechnology

7. Plan for the Chief IP Officer
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VIII. Investor Strategy
Purpose: To manage investors’ perceptions of Company’s IP position for funding events
A.
Prepare for diligence by identifying and addressing all areas at
which investors will look
1.
Patent Portfolio

2.
Freedom to Operate

B.
IX.
Have explanations ready for all freedom to operate issues
Anticipate weaknesses and be prepared to address them
1.
C.
Have a story about what scope of claims you expect that make the
portfolio attractive
Investors don’t like surprises
Coordinate timing of IP activities with financing events
Administration
A.
IP Control
1.
2.
Invention Agreements
3.
Chain of title (Assignments)
4.
B.
Confidentiality
Bayh-Dole compliance
IP Management and document control
1.
Docketing
2.
Annuities
3.
Secure documents
Intellectual Property Services for Innovators in Biotechnology

8. Plan for the Chief IP Officer
C.
License management
1.
D.
Royalties, milestones
Outside Counsel
1.
Invoices
2.
Expectations management
Intellectual Property Services for Innovators in Biotechnology
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