By Sky Bloom IT 
In the course of the many IP (intellectual property) consulting projects we perform, we often come across businesses that have patents – sometimes large numbers of patents – the business is not practicing. That is, the business is not manufacturing or selling a product or service based on that patent.
How, one might ask, does a business end up with patents that it is not practicing? It is the result of conscientious management!
A smart business automatically files for patent protection on any new technology its engineering staff or Research & Development team, or marketing department, or sale force, or Joe from the loading dock comes up with. We actually represented a patent a few years back that was inspired by one of the company’s warehouse employees. But he might not have been Joe.
So, as a wise precaution – and since it does not incur any risks or great costs for the business – smart companies file for patents on any new technology that might have potential for the company.
But then the world happens.
- A business’s focus changes, so it does not ever develop a product based on a patent.
- A new technology comes along that obsoletes the patented technology.
- It may be determined that the market for a product based on a patent is just not big enough to justify the investment in engineering and manufacturing required to bring a new product to market.
- A product line based on a patented technology may not have synergy with the enterprise’s other product lines, drawing corporate resources away from the company’s central mission.
- The investment required to bring a new product to market may be too great for a company to be willing to put funding into it.
- A business can be acquired, and the new parent company is moving in a different direction.
- A business unit may be divested or closed, but its patents remain in the parent company.
- New laws or changes in regulations may make the launch of a product based on a certain patent no longer practical.
These are just a few of the reasons why a business may file for and end up with a patent or a patent portfolio, but end up not using the patented technology.
IP Offerings developed the concept of “Patent Triage.” Just has hospital emergency rooms evaluate each incoming patient to determine who needs to be seen immediately and who can wait – a process call “triage” – a business’s patents can be put to scrutiny to determine if they are or are not being practiced. And what alternatives there are to consider.
When a company has its patents put through Patent Triage, each patent will end up in one of five sectors of the Patent Triage pie:
- Core: These are patents that are core to the business’s mission and are being practiced. They should be kept and maintained until the day they expire.
- Assertion: If a patent is being infringed – and that infringement can be documented – an assertion campaign could generate significant income. It is not unusual for a patent assertion campaign to generate millions of dollars from otherwise unused assets!
- Non-Core: These patents are not being practiced, but for any number of reasons it makes sense to retain them. They might have potential a few years out, or they may cover technology that a competitor could use.
- Divestiture: These are patents that are not currently – and not likely to be in the future – relevant to the core missions of the business. They should be turned over to a patent broker as they could generate substantial cash. What is the old expression? One man’s trash is another man’s treasure.
- Licensing: A business might have patents it is practicing, but other non-competing businesses might benefit from them, and licensing those patents could generate a nice revenue stream.
If your business has over 100 patents, it would make a lot of sense to invest in a third-party analysis of them from a qualified IP consulting services provider.
Alec Schibanoff is Vice President of IPOfferings LLC, a leading patent broker that offers IP consulting and patent valuation services that include conducting a thorough Patent Triage.