By E. Eric Mills, Ward and Smith, P.A.

Editor’s Note: E. Eric Mills is a member of the Intellectual Property and Technology Practice Groups of Ward and Smith, P.A.

Mark Twain was a man far ahead of his time. The new Director of the U.S. Patent and Trademark Office ("USPTO"), David Kappos, recently reminded me of that when he quoted a "classic" line (at least in the eyes of this patent attorney) from A Connecticut Yankee in King Arthur’s Court. The main character in the book, Hank Morgan, insightfully stated: "the very first official thing I did in my administration – and it was on the very first day of it too – was to start a patent office; for I knew that a country without a patent office and good patent laws was just a crab and couldn’t travel anyway but sideways and backwards."

While much has been written about the "crabbing" direction the USPTO has been taking over the past several years, the agency now seems again to be moving forward under Director Kappos. With more streamlined and efficient patent acquisition processes in the United States being seen on the horizon, patent owners now are able to focus more fully on how to streamline acquisition, maintenance, and enforcement of their portfolios as a whole.

Determine Your Business Goals

While it may seem obvious that your company should set business goals, many companies are quick to jump over this important first activity in their haste to build a patent portfolio. As the old saying goes – "if you fail to plan, you plan to fail." The same is true in developing a cost-effective, yet appropriately robust and protective, patent portfolio. At this beginning point in the process (and during the continuing "re-balancing" as discussed below), you must answer general questions such as:

• What is the goal of your technology development? Is it to offer a "disruptive" technology that is a game-changer in a certain industry, or is it to merely improve upon existing products?

• What is the nature of the competitive environment? Should your business goal be to build an offensive "patent thicket" to exclude others or is a more defensive posture allowing freedom to operate warranted?

• What are the global implications for your proposed product? Is your product geared toward certain uses that would be limited in particular geographic areas?

Preparing a Patent Filing Strategy

Once your company’s business goals are defined, or refined as the case may be, you then can formulate a strategy for tactical patent filings. This strategy can include United States patent coverage, foreign patent coverage, or possibly even refraining from patent filings, such as in the case of trade secrets. Additionally, you should consider not only potential direct consumer markets for a product, but also potential license markets or where "knock-off" products may be made.

There is no doubt about it – foreign patenting can be extremely expensive. However, consideration of foreign filing must be an integral part of your company’s overall filing strategy, and initial legwork can set up an application that is much more cost effective to prosecute in other countries. For instance, in an ongoing research and development situation, a company may utilize a United States provisional patent application to "put a stake in the ground" for priority purposes. Within 12 months of this initial filing, the company then may use the Patent Cooperation Treaty ("PCT") process to file on the initial concept (and possibly expanded innovations) and to secure "international" priority rights. The use of the PCT process preserves priority, while postponing the extensive costs of individual country national phase filings for two and a half years from the earliest priority date. Thinking through the appropriate strategy ahead of time can help your company develop a patent application, including the patent claims, that is more amenable to foreign filing and, thus, less expensive to prosecute.

Managing the Portfolio

Customers, investors, potential licensees, and even competitors often have a keen interest in your company’s patent portfolio, and a growing patent portfolio is an important indicator that the research and development in which your company has invested substantial time and monetary resources are taken seriously. However, as your portfolio grows, management complexities and costs also will grow.

The costs associated with the management of your company’s patent portfolio can arise from varying sources such as legal fees, foreign associate fees, and government maintenance fees. While these costs are typically more or less "predictable," you must constantly review your company’s portfolio as a whole to determine the relevancy of the individual patent assets to your company’s current business goals – a process akin to one that individuals might undertake when "re-balancing" their financial portfolios. This process may involve directing more or less resources to individual applications/patents in particular technologies or countries and generally adjusting your company’s filing strategy in accordance with your company’s current business environment.

The important point here is to make sure that as your company’s business goals are updated, your company’s patent filing and maintenance strategy are similarly updated. Regular portfolio "tune-ups" also can help to identify holes within your company’s existing patent pipeline, or a technology vacuum in general, which can help direct your company’s focus in its research and development efforts and possibly open up new areas of business exploration.

Commercial Exploitation and Enforcement of Patent Rights

While the costs and time frames for acquisition and management of patent assets can be somewhat "predictable," your company would be remiss to not also take into account possible situations involving the commercial exploitation and enforcement of its patent rights.

Commercial exploitation is often a driving motivator behind the creation of a strategic patent portfolio, and rightfully so since the patent assets often are the defining "fence" surrounding the results of research and development. Matters to be considered when exploring this issue include costs related to license agreement development, outgoing license fees, joint ventures, or strategic acquisitions to obtain valuable intellectual property of others in order to advance the overall development goal of your company.

Enforcement of your company’s patent rights is never the most exciting or desirable task to be addressed – but it is an important part of your company’s patent portfolio management framework. Patent landscape, validity, and infringement concerns must be monitored constantly and, like most areas in the legal world, an ounce of prevention is worth a pound of cure. Accordingly, you should constantly monitor the marketplace and technology space occupied by your company and carefully consider enforcement actions (including paying special attention to your company’s own freedom to operate in light of the patent holdings of competitors).

While commercial exploitation and enforcement situations and costs can be highly unpredictable, an effective management program that takes into account your company’s business goals and associated acquisition and enforcement strategy can help mitigate unnecessary risks.


The growing of a patent portfolio can be one of the most satisfying and financially rewarding processes that your company can pursue, and this applies to well-established and start-up companies alike. Strategic planning, portfolio implementation, and constant monitoring and adjustment are necessary, especially in today’s economic environment, to shore up your company’s intellectual property assets and avoid any portfolio holes that expose your company to market competitors. In summary, it is important in business for a company to stay on the path of forward progress and not go the way of the crab.

© 2009, Ward and Smith, P.A.

Ward and Smith, P.A. provides a multi-specialty approach to the representation of technology companies and their officers, directors, employees, and investors. E. Eric Mills is a registered patent attorney and a member of the Intellectual Property and Technology Practice Groups where he concentrates his practice on patents, trademarks, copyrights, trade secrets, and related business matters. Comments or questions may be sent to

This article is not intended to give, and should not be relied upon for, legal advice in any particular circumstance or fact situation. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney.