The Distinguished IP Expert Series launches today on IPFrontline, presenting a series of interviews with IP industry thought leaders who share their insights about the current and future state of IP in the United States. Doug Luftman, Chief Innovation Officer and General Counsel of Lecorpio IP Management kicks off the series, providing his perspectives on IP business valuation and technology for managing/measuring IP.
Q: What are the major trends you are seeing in IP today?
Doug Luftman: The IP world is in an increasingly fluid state. Case law continues to impact the validity of intellectual property. Its business value is being more regularly questioned, examined and tested as corporate executives demand greater alignment between IP initiatives and business goals. Companies are facing an increased headwind in being able to efficiently enforce their IP. IP royalty rates and damages theories have become more difficult to quantify and prove. IP management technology is showing promise in solving some of these problems, establishing more efficiency and metrics. Legal industry resistance to such technologies persists, but encouragingly this is lessening.
Q: What do you think is troubling today’s IP lawyers the most?
Doug: IP lawyers are striving to get increasingly closer to the businesses they serve, and to better understand products, revenue and the industry in which their clients operate. IP attorneys also must anticipate where their industry is headed in the next 3-5 years, predict what new business and legal issues their company may confront, and ensure that their IP strategy aligns with this larger picture. Like never before, IP lawyers must intimately understand the business case for the IP assets they manage and verify that such IP assets are effective business tools for their companies.
Q: How can in-house IP counsel establish and verify the business value of their IP?
Doug: First, they need to prove the value of their IP assets as it correlates to corporate business objectives. In industries like pharma, there is a direct correlation between patents, products and profits. However, in other industries, like high tech and financial services, IP counsel doesn’t have the same consistent story to tell. For example, a technology company may have thousands of patents that not only cover various aspects of their product with differing degrees of business value, but may also cover third party technologies unrelated to their company’s products which serve as a deterrent to third party IP assertion risk. It’s sometimes difficult to quantify the entire value of the company’s patent portfolio and establish a clear return on investment (ROI). Many IP professionals desire a more standard, universally accepted methodology they can use to calculate ROI for their IP assets. Unfortunately, this does not yet exist and there is a lack of available robust models or research to specifically address the latest IP valuation dynamics.
Q: Where do you think this IP valuation methodology will come from?
Doug: I believe that academia, industry, the USPTO and IP-related trade organizations will eventually collaborate to pull together a more substantial methodology to help IP counsel with business justification for IP assets. Without this, IP counsel will be forced to rely upon more ad hoc methodologies and anecdotal theories.
Q: How do you think technology can provide a partial or complete solution to the IP valuation dilemma?
Doug: Technology can be leveraged to solve many IP-related issues, though it needs to be flexible enough to serve an organization’s diverse needs. Many resource intensive and costly IP processes can be automated such as docketing, invention mining, patent filing workflow, budgeting/ forecasting, and resource management. A new wave of analytics capabilities can help characterize and evaluate a patent portfolio, providing greater insight about the IP assets including associated cost and value as well as capturing metrics and managing operational resource needs.
Such technology is incredibly important, but it’s equally crucial that IP lawyers take time to better understand each tool’s functionality and how to use each to its fullest capacity. If IP lawyers are willing to incorporate technology tools into their everyday work process, they stand to gain increased structure, insights, consistency, accountability with C-suite executives, and improved transparency of the whole IP process and the underlying portfolio. Data and analysis offered by such technologies also will further equip IP lawyers to better answer IP valuation and ROI questions more convincingly when they inevitably come from the C-suite.
Doug Luftman is Lecorpio’s Chief Innovation Officer and General Counsel. He leverages his thorough understanding of issues facing in-house IP attorneys, their outside counsel and other legal service providers to drive Lecorpio’s corporate and product strategy. Prior to joining Lecorpio, Doug was Vice President of Innovation Services and Chief Intellectual Property Counsel for NetApp, Inc., where he was responsible for the company’s nationally recognized worldwide intellectual property program. Prior to that Doug held similar roles at CBS Corporation and Palm, Inc. Over the years, Doug also has been globally recognized for his personal accomplishments as an innovative and strategic executive. Doug earned his J.D. with honors from The George Washington University School of Law in Washington, DC and his B.S. in Electrical Engineering from UCLA in Los Angeles, CA.