smallbusiness.co.uk: Helping your business think big

As markets adapt to the impact of the current financial crisis, ambitious owner-managers will seek to identify and nurture core value in their enterprises.

In this environment, the patent portfolio of a technology company is much more than a set of legal documents. Patents are a ‘hard’ measure of a company’s intangible assets, and therefore a strong signal to clients of product and services value.

A company’s patent portfolio is also a frequently under-exploited business development opportunity. In some industries, patents can be used as an "exchange currency": in developing cross-licensing agreements with competitors and suppliers, and ‘buying’ your company a ticket to the big game. And of course, a strong and enforceable patent portfolio can represent a strong barrier to entry for competitors.

What measures are appropriate? An easy and direct measure is to compare the total number of patents owned by a company: easily identifying some of the most technology intensive companies in a sector. But within a portfolio of 100s or 1,000s of individual patents, it is also possible to look for the gems.

Commercially valuable technology will be protected by patents filed in several countries: giving rise to a patent family. What countries are included or excluded in a patent family can say a lot about the company’s strategy or strength of its protection.

It is also possible to gauge the influence of a company’s patent in an industry by looking at the number of times it has been cited by other inventors as “prior art”. Patent data can also serve to identify exceptional technology entrepreneurs and inventors, whose creativity underpins the growth of technology companies. It is possible to create a patent inventor network map to explore the relationship of a company’s inventors with other inventors, within and outside their own organisation.

Finally, and perhaps contrary to popular perceptions, patent protection is increasingly important in key emerging economies. China in particular has emerged as a key destination for patenting activity of US corporations, as they seek to position themselves in a growing market with ever improving legal institutions.

A comprehensive and strategically integrated IP strategy remains therefore a key to long-term value creation. Where do you stand?

Ilian Iliev is the CEO of patent mapping specialist Cambride IP

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