Five Best Practices for the CFO: Leveraging Untapped Assets

Denise Deverelle Crown explores the five best practices for CFOs to leverage IP assets to reduce costs and create an ongoing revenue stream.

As organizations work to optimize nearly every aspect of their business, we’re seeing the Chief Financial Officer (CFO) take a more active role with legal to manage the patent portfolio.  The CFO certainly has a vested interest – patent litigation is extraordinarily expensive, and there are excellent revenue opportunities in licensing, along with cost-savings for selling unleveraged technology.

Patents are expensive, both in terms of R&D, but also prosecution and maintenance fees for their lifespan.  Too many patents sit on the shelf after being granted, yet these “Rembrandts in the Attic[1]” can generate significant revenue.

Best Practice 1:  Dissect your organization’s portfolio. 

Determine what you own, when it expires, and how it is aligned with your business model today.  You might break a portfolio down by concepts and sub-concepts in order to assess alignment with your business.  This is a painful process if performed manually, but software is available today that can perform this analysis in hours vs. weeks of manual tasks. 

Financial Services Patents

Best Practice 2: Separate Assets No Longer Pertinent to your Business Model.

These can be examined as potential sell-offs, licensing opportunities into adjacent markets, or to former competitors that are still in the space.   Worst case scenario, is you can stop paying maintenance on patents that are not valuable.

Best Practice 3: Determine Which Patents are Valuable.

Every organization with patents tends to have a collection of patents that are the gems – either because they are seminal, or a major revenue source is tied to them.  There are about 30 conditions that identify patents of value; one in particular is that they have been heavily litigated. In the collection sampled above, these are a few of the gems:

Best Practice 4:  Find Infringers. 

Factors that apply here are your organization’s level of aggressiveness toward competitors, your litigation track record, the litigation track record of opponents, the risk/reward factors, and how you feel about resulting media attention.

In the sample set above, it was quick work to find several dozen patents that might be infringing, and bear further analysis.

Best Practice 5: Fill Gaps in your Portfolio.

This will depend upon your current and future strategic direction.  If moving into new markets, you can consider make vs. buy decisions as part of your market validation.

Final Tip: Leverage Technology and Make Friends.

A good analysis platform is less expensive than outsourcing this analysis, however once the analysis is performed and a strategy developed, a great licensing broker can efficiently help you buy, sell, or license the technology that best fits your market strategy.   Alternately, you could  grow your team and develop a great internal skillset for turning your IP into a strong ongoing revenue stream.

[1] Kevin G Rivette and David Kline: Rembrandts in the Attic: Unlocking the Hidden Value of Patents


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