December 2003  Issue 6

• Letter to IP Professionals

• IP Management Questions

• IPAM Survey on Strategic Management of IP

• Discussion Topic: The Value of Cross Industry Intellectual Property Benchmarking

• Leading Company Benchmark Report

• Top Reasons to Benchmark 

• Trend #6: IP ownership and superior IA value articulation will stimulate and enable more partnering 

• Top 14 Challenges For Intellectual Property Professionals

• Future Topics

LETTER TO IP PROFESSIONALS

Dear IP Professional, What do Dow Chemical, Dupont, Boeing, and HP have in common?  Other than being leading IP practitioners and billion dollar corporations.  They participate regularly in activities to benchmark their IP program.  Evaluating how they stack up and where they can improve.  This month we are focusing on benchmarking.  We will discuss its value and approaches. One thing that seems common to most top IP programs, or other top business operations for that matter, is the practice called "benchmarking" and "best practices." There are a number of definitions for these out there. Here are the ones we use. "Best Practices" refers to identifying, sharing and implementing practices that result in improvements in either efficiency or effectiveness. Best Practices programs are continuous quests for improvement. Best Practices are contextual, so you continue to look at the application in your environment, making it the right practice. This ties closely to "Benchmarking," a term and activity that has its roots in the quality movement. I can't improve on the definition given by Richard Dun in an article in Plant Engineering. "Benchmarking is a systematic, continuous process for measuring, evaluating, and comparing business practices against recognized leaders to determine the extent to which you can improve your organization's performance." In general use, benchmarking is a quest for best practices. These can be found either inside or outside the organization. This search if successful must lead to developing the most effective practices for your organization. Our experience indicates that most companies benchmark informally. They attend trade shows, seminars and interact with their colleagues.  In this newsletter we list the reasons people benchmark IP and the value they get from it. Additionally, we are taking a look at the rationale for benchmarking and how it has been reduced to an exercise that usually returns less than the resources invested. We apologize in advance to those that might be offended by our observations of these activities as we see them being practiced in most corporations today. Benchmarking does play a significant role in the leading companies where those companies have actionable metrics to determine the most effective use of their benchmarking efforts. We feel benchmarking is ineffectively practiced and used in industry as a whole, but can be worthwhile if done correctly. Following is a list of rationales that we heard from various IP executives; we look forward to your confirmation or exception. 1.    Benchmark meeting to identify best practices – This is the usual response, but our experience tells us that this is not usually as effective as it could be. Many benchmarking sessions between companies are not organized to effectively accomplish this goal. Furthermore we have seen even less effectiveness in the implementation of the practices identified. 2.    Benchmarking for support of new initiatives. 3.    Benchmarking meeting to better understand your competitor. This sounds good and to some degree could be effective. We find this purpose to usually fall short of expectations. 4.    Benchmarking to “CYA” an American term for protecting your backside when making decisions that may be risky. This can be somewhat effective but should not be counted on. 5.    Benchmarking at a conference for effectively getting multiple company perspectives. This can be effective also but more for networking between people than for actually getting information that hits the bottom line. We feel conferences are used as much for rewarding people as trying to improve IP practices. Leading companies are very active and do see some benefits in benchmarking and identify improvements. Another topic we raise is the value of benchmarking your IP program. Most companies that we talk with are very insular.  Benchmarking is a nice idea, but not in the budget.  The question we ask is where and when do companies like yours improve their programs.  Can they afford the time and resources to focus on the problem?  Leading companies participate in groups such as the IPO (Intellectual Property Owners Assoc.),  LES (Licensing Executive Society), and  ACPC (Assoc of Corporate Patent Counsel) all good organizations, is that where they benchmark?  We have analyzed the “Survey on Strategic Management of Intellectual Property” coauthored by myself.  66 companies from diverse industries and of various sizes participated.  The respondents were the Chief Patent Counsel or equivalent for the company.  Interesting responses came out of our analysis (Survey Overview Statistics section).  The general findings were presented at the Intellectual Property Owners seminar in October 2003.  We have looked at it based on stratums of IP activity, size of company and by industry.  If interested contact us.  We plan to have the report available in January. Company size varies from under $100 million to over $100 billion dollars of sales and has executed between less than 100 disclosures to over a thousand. The participants answered over 350 questions. Have a happy and healthy holiday.  We hope to hear from you in 2004. Rob Williamson (rwilliamson@ipambestpractices.com) PetrashWilliamson   P.S.  In the future we will distribute the newsletter quarterly.  Also, we are exploring organizing an IPAM discussion group.  It will be a group of companies that can benchmark best practices and interact on challenges.  Contact me for details.

Do you benchmark your IP program to determine improvement opportunities?

Are you getting the most out of your IP Program?

Do you need to defend your IP program initiatives to management?

Do you use benchmarking exercises as a basis for selling new ideas? 

Learning from the leaders, although you may be a smaller enterprise, IP practices can scale to a smaller organization.  Most IP programs are following similar processes. Some companies are more formally organized and better articulated their activities than others.

Most companies have informal benchmarking approaches.  The result is that there are very few initiatives or results.  Informal benchmarking falls under tradeshows, seminars and interactions with colleagues.  Although there is a heavy cost incurred for these benchmarking exercises, very few show bottom line gain.  The information is usually shared with one other person in the organization on an informal basis and otherwise captured in their head.

Most benchmark exercises seem to be "feel good" events and do not achieve measurable results.

Are you getting the biggest bang for your benchmarking efforts?  Have you calculated the cost of traveling to a conference  – air ticket, hotel, food, travel time, and disruptions of the office workflow are a few of the direct and indirect expenses?  How many employees attend a conference?  If you do benchmarking, have you calculated the costs?  Travel costs for a few people can be in the thousands of dollars. Unfortunately, many companies do not get a lot of value from benchmarking and cannot measure the value they do get.

Most companies that benchmark, use conferences and seminars for evaluating improvement areas and metrics.

* Source "Survey on Strategic Management of Intellectual Property" (Contact us to get more information)

CLICK HERE TO GET MORE INFORMATION ON PETRASHWILLIAMSON

Some interesting insights that we have gained from this survey are the following:

• About half the total companies feel management does not support IP efforts to the degree they should.

• 1/3 of the companies primarily patent to prevent imitation.

• 1/3 of the companies primarily patent to defend their right to practice.

• 40% of the companies do not use provisional application.

• Only 25% of the companies have any formal metric to determine the quality of their patents.

• The number one hurdle in Company IP management is leadership’s lack of understanding of the impact of IP.

The PetrashWilliamson analysis takes the survey data and organizes it by:

• Industry segment              

• Number of patents/yr                  

• Number of disclosures/yr           

PetrashWilliamson has analyzed the information and segmenting the participants into 3 stratums.

Click here to get details on the complete report.

Top Reasons to Benchmark

1. CYA - "Cover your ass"
2. Gain background information to Advocate new Activity
3. Sell leadership on new ideas
4. Defend you a previous defined position
5. Socialize with other companies
6. Defend Budget
7. Defend Resource Needs             

Next class begins February 3, 2004. Apply today! Application deadline is January15, 2004.

Visit our Web site for details and application information. For additional information, call 1-630-416-7459 or e-mail Gordon Petrash, Director, Benchmarking University MBA Without Boundaries.

CLICK HERE TO GET STARTED

The Value of Cross Industry Intellectual Property Benchmarking

Cross industry benchmarking is defined as conducting benchmark studies with partners across the broad scope of industry. Cross industry benchmarking plays a key role for a company in helping establish best practices and in paving the way for continuous improvement. Additionally, the confirmation obtained from benchmarking cross industry underpins internal credibility necessary for the implementation of major cultural, structural or thrust changes in the organization.

In order to fulfill its objectives outlined above, a company must target potential benchmark partners individuals and organizations both inside and outside the industry who appear to possess best practices in areas of interest to a company: this short list also includes, as a special subset, individuals or organizations having best practices with specific relevance to the Intellectual Property Asset Management.

In essence, five types of benchmarking activities are commonly practiced:

1.   Face-to-face full scale benchmarks set up following well recognized benchmarking principles and                carried out in an informal meeting atmosphere to facilitate information exchange;

2.   Short, focused telephone benchmarks set up to achieve specific targets;

3.   Conference participation, where networking and discovery are the key elements and serendipity can be                a major influence;

4.   Participation in collaboration where the exploration in depth along a well charted route of investigation is              followed;

5.   Internal cross business benchmarking.

The desired outcome of benchmarking activity is a Targeted Action Plan that are implemented within the organization in order to bring about desired change. Drivers of this change are effectiveness, efficiency, and the creation of value within the organization. In other words, as each structural change fits into the organizational mosaic, the overall performance of the organization must measurably and synergistically improve.

Company's that have been very successful in applying the results of benchmarking activity to Intellectual Property Asset Management Processes: many times have been less successful in impacting future actions at the corporate level as much as is needed to make positive change.

Internal Benchmarking

This formalization of an internal benchmarking process can be a powerful tool. Formal structures should exist for communication of technology between technology centers, a well-established practice within a company that combines the best of centralization and decentralization activities and processes. Best practices in manufacturing operations are a result. Internal benchmarking is practiced for Intellectual Property Asset Management activities, e.g. between a company “A” Business and “B” Business. Internal Benchmarking is a continuous process: however, it is necessary, from time to time, to step back and formalize the learning experiences and implementation.

It is paramount that the process is a two way street in which both participants have something to gain. In recent times, short, focused telephone benchmarks have been carried out with large Corporations very successfully.

Conferences present a significant opportunity for networking and benchmarking where, even with well-bracketed conference selection, the elements of discovery and serendipity are significant.

The lessons that Companies have learned from cross industry benchmarking activities are:

• That although much can be learned from non-like companies, the significant learning on processes related to the mechanics of intellectual property asset management (e.g. Patenting) have come from like companies: a result of this learning, for one company, has been that patent costs are now charged to the business incurring them;

• That there are a considerable number of recognized best practices within certain computer hardware and       software companies which significantly leverage their Intellectual Assets;   

• Areas of a company’s own expertise have been recognized and are built upon, whereas for those areas         where strength is lacking plans have been developed to implement change;

• Benchmarking is time consuming and a lot of effort, and a company could over extended itself during the learning phase;

• It is imperative that benchmarking activities be continually evaluated for the process and the benefit.

A company should be willing to participate in benchmarking and to give best practice information to others in return for similar information

    Principles for benchmarking –

• Give what you do best

• Be open and honest

• Make the rules and stick to them

• It's not a feel good exercise – follow up commitment

• Prepare for the meeting by exchanging materials before hand.

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Portfolio Inventory: Organizing and Classifying your Portfolio.

Benchmarking: Evaluate outside company practices. The practice would result in: productivity gain, financial gain, risk reduction, and other gains.

Foreign Filing Strategies: Determining a defined strategy and framework. How do you evaluate which countries to filing in? What are the issues in Asia? 

IPAM Model: Explained in detail the interaction of various disciplines to gain business alignment.

Organization of IP Function 

Patent Data

Intellectual Property Processes

Intellectual Asset Portfolio Maintenance

Intellectual Asset Portfolio Management 

(Strategic/Portfolio Exploitation)

This Benchmark Report is a unique offering from PetrashWilliamson. It provides your IP leadership with tremendous insights of 10 leading companies IP program.  Included in the report are Process, Metrics, personnel  and  technology. Large companies get a picture of what their contemporaries are doing and small/medium size companies get exposure to companies practices to learn for future application. 

The authors provide you with a synopsis of the interviews as well as the detailed answers. They discuss the complete IP lifecycle.