Patent Key Performance Indicators

ICM Advisors
INTELLECTUAL CAPITAL MANAGEMENT
Monitoring patent portfolio impact on
business performance Patent Key Performance Indicators
ICM International
ICM ADVISORS - ICM RESEARCH - ICM INDUSTRIAL
ICM Advisors
INTELLECTUAL CAPITAL MANAGEMENT
Monitoring patent portfolio impact on business
performance
Patent Portfolio KPI
The escalation of global competition and the increase of competitive pressure have been driving top
management attention towards the contribution to business results of each part of the organization.
Hence, the use of performance indicators to measure, control and communicate is again a topical
issue among companies.
How does patent portfolio affect
business performance?
A well-known problem for innovative companies is appropriation of economic returns from
technological innovation and prevention from competitors imitation. Patents in particular are one of
the key mechanism for appropriating technology innovations returns in several industries. Moreover,
technology innovation and collaborative R&D models require a tight control on patent generation
and exploitation. Furthermore, patent related costs are increasing (people, processes, systems,
legal issues).
A strong patent portfolio can help companies to control the technology and commercialize products,
to monitor internal technological innovation performances, to open new revenues and funding
sources and to gain contractual power in strategic negotiations. Patents protect know-how, products
or valuable process, participate to both sustainability and value creation: so patent portfolio is
becoming a strategic asset.
Key management issue:
How does patent portfolio affect business performance?
IP departments face with the
challenge to define relevant and
reliable KPIs in order to measure
how and to which extent the
company’s patent portfolio
successfully supports the core
business
Since many years Key Performance Indicators (KPI) are accepted tools for management to
continuously control and assess the operations performance within a company and patent value
management is no more limited to legal department but it acquired a strong significance for the
whole company involving different functions.
Nowadays, the KPI methodology is even used in R&D operations in order to measure how
successful and quick R&D results are transferred into profitable commercial products and services.
Nevertheless most of companies do not monitor or assess patent filing activity and its impact, and
this lack of information is a strong barrier to decision process.
A company can not manage what is not measured.
Patent portfolio is often not managed
Patent portfolio must protect and exploit technology portfolio of the company in order to support the
business objectives: patent portfolio must be connected and integrated with technology and overall
company strategy in order to create value.
Measuring patent performance became an urgent issue in order to maintain sustainability since
patents have to support the business roadmap and furthermore, patents could create value on their
own through monetization, attracting investments or as a competitive tool for strategic advantage
towards competitors.
In the area of intellectual property there is no generally accepted set of standard metrics: so IP
departments face with the challenge to define relevant and reliable KPIs in order to measure how
and to which extent the company’s patent portfolio successfully supports the core business, or
provides its own contributions to the overall results of the company.
ICM International
ICM ADVISORS - ICM RESEARCH - ICM INDUSTRIAL
ICM Advisors LLC, 2002-2014 All Rights Reserved
Monitoring patent portfolio impact on business
performance
ICM Advisors
INTELLECTUAL CAPITAL MANAGEMENT
Measuring patent performance
became an urgent issue in order to
maintain sustainability since patents
have to support the business
roadmap
Objectives and Stakeholders
Main objective of a patent portfolio KPI systems is to measure the patent portfolio performance in
order to:
1.
Assess and qualify patent portfolio structure and composition
2.
Understand how patent portfolio provides value to business and increase its contribution
to value creation
3.
Communicate patent portfolio performances to relevant stakeholder through a set of
customized and synthetic indicators
A patent KPI system should become a useful management tool for different stakeholders inside the
company: patent portfolio, in fact, is no more a legal concern but it is a cross-functional issue.
For this reason the objectives, scope, indicators and level of sophistication of the patent KPI system
have to be customized according to company internal and external environment and must be
defined in order to answer to different stakeholder needs.
For this reason the objectives, scope,
indicators and level of sophistication
of the patent KPI system must be
defined in order to answer to
different stakeholder needs.
ICM International
ICM ADVISORS - ICM RESEARCH - ICM INDUSTRIAL
Hence, the patent portfolio KPI must support business decision process at several levels. The IP
department needs to communicate about patents role in business and align patent strategy to
technology and business ones; R&D department must understand how to protected research
activities and inventions; the head of the business units needs to monitor patents impact on
business/products and to know competitors’ activities; the financial direction wants to know how
patents can generate revenues and sustain economic and financial results; the board needs to have
a clear overview of the patenting activity in order to include patent strategy in company’s strategic
plans.
ICM Advisors LLC, 2002-2014 All Rights Reserved
Monitoring patent portfolio impact on business
performance
ICM Advisors
INTELLECTUAL CAPITAL MANAGEMENT
Implementing a Patent Portfolio KPI System
A patent portfolio KPI system is a
valuable tool to direct IP protection
and exploitation along the value
chain of the business processes.
KPI system can be implemented on
different level of sophistication
Once performance indicators have
been created, the critical process is to
use and spread them through the
organization
A patent portfolio KPI system is a valuable tool for management to direct IP protection and
exploitation along the value chain of the business processes.
Setting the right set of metrics and indicators is a customized process and it is based on
stakeholders requirements and objectives. The KPI model should consider the contribution of patent
portfolio to achieve company’s strategic goals, its impact on economic and financial results and its
role for IP operations workflow efficiency and efficacy.
KPI system can be implemented on different level of sophistication according to

Company purposes and nature of decision process: short term/tactical (to
control/monitoring) or long term/strategic (to measure value creation and business impact)

IP Management best practices adoption

Role of patent portfolio in the business strategy/industry

Management priorities and commitment

Data availability
Once performance indicators have been created, the critical process is to use and spread them
through the organization.

First step in the implementation process is to set-up objectives of patent KPI systems and
specific requirements for each stakeholder needs.

Second step is to build up the model and to define right set of indicators to summarize
patent portfolio activity and impact. Indicators must be synthetic, easy to make and to
understand, time related and actionable.

Third step is to implement the model in a supporting systems configured according to the
operational and management reporting requirements.

Finally dissemination plan to KPI users must be defined with delivery rules and update
activities.
Even if sophistication and dissemination of IP management practices are increasing among
industrial companies, monitoring patent impact on business value drivers is a complex process that
faces structural barriers such as: lack of systems to capture data, lack of available resources and,
often, lack of management support.
ICM International
However, given the strategic role of patent portfolio, measuring its impact and evaluating its
contribution to company performance is a critical step in order to deeply exploit its potential value.
ICM ADVISORS - ICM RESEARCH - ICM INDUSTRIAL
ICM Advisors LLC, 2002-2014 All Rights Reserved
ICM Advisors
INTELLECTUAL CAPITAL MANAGEMENT
Monitoring patent portfolio impact on business
performance
ICM International and ICM Advisors Profile
ICM International is a leading European professional network specialized in: Valuation of IP and
Intangible assets, IP Strategy & Finance, Global Competitive Market & Technology Intelligence,
Systematic Innovation & Technology Transfer.
The network is organized in three business units:
Valuation & Strategic Services – ICM Advisors
Competitive Intelligence Services – ICM Research
Innovation & Technology Transfer Services – ICM Industrial
ICM is a founding member of IPT Alliance, with Avenium Consulting SA (France - Subsidiary of CEA
Commissariat à l'Energie Atomique et aux énergies alternatives) and Patev Associates GmbH
(Germany).
IPT Alliance is the European leader in Intellectual Property Management and in Technology
Transfer with a track record of references in many industrial sectors
The network operates with a staff of about 150 professionals.
The headquarter is based in Geneva.
European Locations: Düsseldorf – Geneva – Grenoble – Hamburg - Karlsruhe – Milan – Munich –
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ICM Advisors is the business unit of valuation and strategic services of ICM International.
The company has a strong specialization in industrial and financial management of intangible assets
supported by valuation methodologies recognized by financial community and combined with
proprietary methodologies at the state-of- the art of the best international practices.
ICM Advisors is the first European company that provides integrated professional services with
industrial and financial solutions that use intangible assets as collateral.
In Italy ICM Advisors is a leader in the valuation of intangible assets and intellectual property (brand,
know-how, patents ...) with more than 700 valuations.
The high seniority of its advisors with international experience in many industries and with multidisciplinary skills such as marketing, technology, business strategy, economic-financial valuation,
corporate finance and development of international markets enables comprehensive valuation of the
company the potential of the intangible heritage.
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