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In Pursuit of Patents

By Michael Montembeau
February 01, 2004

There is little doubt that protecting one's intellectual property is important for businesses both large and small. Statistically, 60% of the market valuation of the average industrial corporation is based on its intellectual property and that figure rises to 80% for high-tech companies. Patents make up a large slice of the intellectual property pie in any technology-driven company. Filing a patent, however, is not the end of protecting your technology. Indeed, it is just the beginning. A key ingredient to the success of any technology-based company lies in effectively managing its patent portfolio. One important and often overlooked aspect of managing your patent portfolio is patent tracking.

According to John B. Jones, Jr., Managing Director at Salomon Smith Barney, many companies lack the necessary diligence in keeping an eye on new technologies. “Over the long haul, businesses must continuously innovate to sustain product leadership. However, many are still practicing or analyzing innovation in an undisciplined or irrelevant manner.” “Patents and Market Value Forecasting,” Anthony Breitzman, Ph.D., The Annual International Conference of the Society of Competitive Intelligence Professionals, March 15, 2003, Anaheim, CA.

Tracking patents is an underutilized strategy that can help solve technical problems, provide a perspective on innovation in a particular area of technology, afford great insight into competitors' business and technology strategies and facilitate rapidly identifying competitive threats. However, with 10 million patents in the world already, and well over 10,000 new ones filed in an average week, keeping up with them can be daunting and labor intensive. The alternative, however, may be summed up in the Chinese Proverb, “the death of a thousand cuts.” Companies that fail to exercise the requisite diligence in maintaining their patent portfolio may be subject to the slow hemorrhaging of their market share, which eventually bleeds the vitality out of the company.

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