IP Strategy 101 / How to manage patent cashflow

In terms of intellectual property rights, creating a single application or portfolio includes the applicant in a natural cash flow. If it is considered in a multidimensional way, it can be named as preparation before the application, prosecution or follow-up as the grant process and monetization steps after the grant. Sub-breakdowns of each stage are also available.(Figure 1)

Figure 1

In short, no matter which country the application is made in, any patent goes through these three processes until it is abandoned.

Preparation: Basically, it covers patentability, freedom-to-operate, competition and inventor interviews.

Prosecution: Basically, it covers geographical protection strategy decisions, correspondence with the patent office and legal time tracking.

Monetization: Basically, it covers processes such as licensing, buy-sell, infringement and opposition.

In all these processes, a cash flow occurs. The main purpose of a patent application is to return the at least spent cash flow to the applicant directly or indirectly during the lifetime of the patent. These costs are basically divided into two as official fees and consultancy fees. Due to its structure, patent cash flow transitions from a position dominated by attorney fees in the first few years to one dominated by official or governmental fees paid to offices. In other words, a lifecycle in which consultancy fees are predominant begins and continues as a process where official fees gradually increase in weight(Figure 2). 

Figure 2

Generally speaking, the costs for obtaining the granted patent and thus for obtaining patent protection, excluding internal expenses, amount to approximately 75% of the accumulated total expense. Considering that a patent is protected for 7 to 9 years on average and the patent fees paid every year continue to increase, these calculations can be accepted as more reasonable. 

In Techin2B platform, all this intellectual property and product portfolio management can be managed from a single center and all cost processes from preparation to commercialization can be followed with the team(Figure 3).

Figure 3

With the help of TLS.IP professionals, all strategic portfolio management and cash flow can be tracked.

References: 

• Inquartik.com
• Patent Management, 2020, written by Gassman, Bader, Thomson
• WIPO Manuals
• Photo by bplans.com