Director of Worldwide IP Strategy Kevin McLintock developed the IP strategy at Logitech in 2011 on a guiding principle of “establishing a strong freedom to operate platform.”
He’s translated it into a tactical program that has completely overhauled priorities, program management, budget allocation, and patent filing activities. Informing his short and long-term decisions in the last five years has been the always present need to ”build the right patent portfolio.”
The right number will probably be more than you thought, and much more than your CFO expected. It’s typically expensive in terms of R&D investment and IP protection. It's not simply, however, answering "How many patents do you need?" as a quantitiave exercise.
What's more important is creating the right balance in the portfolio. “Getting it right” - more realistically, as close to right as you can - is critical because the consequences of “getting it wrong” are enormous.
Kevin spends a lot of time on his portfolio because Logitech’s future rests on invention and innovation in highly competitive and dynamic areas such as digital music and virtual reality.
Here is his process for optimizing the size and balance of his patent portfolio.
How many patents do you need at Logitech?
Q: Why is getting the number and balance so important for in-house counsel like yourself?
Kevin: Getting the portfolio right is one of the most significant parts of my job. The risks are very material. In literal terms, if somebody were to sue us, we may have nothing to countersue or to defend ourselves with. If we are entering a new product category or market, we want to have the groundwork of a portfolio already established to provide flexibility in how we move forward.
Q: Is there a right number?
Kevin: Arriving at the right number is especially difficult for a company of Logitech’s size, with such a diverse product portfolio. There’s no standard playbook I can just copy. I know we don’t have the right number of patents at Logitech right now, but I also can’t tell you what that number is. More importantly, I don’t dwell on it either.
Don’t focus on questions you can’t answer. Far more relevant is actionable information so I focus on the question that does matter: "Do I have the right portfolio to support Logitech’s business goals?" I could have a very large portfolio in one category, but they may be of little strategic value. A smaller portfolio of highly strategic patents would be of much greater value to us, and be more than sufficient to support our objectives.
A Deeper Dive Into Technology
Q: How do you answer the “right portfolio for our business” question?
Kevin: I repeat the process I used to create our overall IP strategy, but go deeper into the underlying technology. A lot more time spent with Logitech engineers and scientists helps me balance patent numbers with our portfolio needs. I look at:
- Current Products and Markets
We need the right number of patents to cover our current products and protect current revenues. We file patents, utility applications to cover the basics of what we're doing, design patents for very specific products, and foreign patents to address manufacturing or market issues in specific geos.
- Forward-Looking Opportunities
We then look to the future. What do we think we will need in forward-looking areas? We may not be doing something now, but it could be different in 3-5 years. Do we have some seed IP that will open up these areas for us?
- Future Markets Where We May Not be Active
How many patents will we need to have a meaningful presence in future areas that we may not even want to formally operate in? Look at this very closely. The answer could be interesting to both competitors and future partners. If you believe your seed technology is notable, and strategically significant to competitors, protect it.
- Future Enforcement
Looking at each product category from an enforcement standpoint. Do we have enough, either to take action against someone else, or to defend ourselves if someone takes action against us? The number will vary based on the strength of the IP and the type of entity we are targeting.
Q: What do you do next?
Kevin: Put my objective thinking hat on. Who are the significant competitors in each business area? Who do we think could become one? Identify and aggregate the overlaps, then calculate the number of patents I think we need. I recommend you do the same; start at the end, then work backwards to your current portfolio. Identify the gaps, then decide on a granular level what needs to change.
Building a Portfolio is a Group Effort
Q: Clearly, this isn’t a solitary job. Whom do you work with on this? I assume you work closely with strategic planning, sales, and the Head of R&D?
Kevin: I recommend another four-step process:
Step One is the big picture. Map your operational future. Talk with everyone to understand where the business is and where it is going. Which markets do you think are important? What manufacturing locations are important? Who do you compete against now, and what competitors do you expect to exist at some time in the future? Sit down with unit leaders to understand the goals for each business unit and product categories. You probably did a lot of this work when creating your overall IP strategy so reuse what you can.
Step Two is figuring out the portfolio's ideal composition. With the information you learned and the data you collected from Step One, an IP professional’s next step is figure out ideal composition in terms of protecting future products and supporting operations in relevant countries.
Look at the strength of your current portfolio. Are there concentrations in different technology areas, or different product categories? This is a very “today” thing. In certain strategically important areas, you might conclude that you’re doing well.
It’s a rigorous intellectual exercise with few rules, many hypotheses and even more unknowns. Here is an example: “We have a good history of developing IP in this area. We've got a horde of patents already filed in this particular area. We’re clearly on track. If something were to happen today, however, if we were concerned about certain competitors, or regions, would we be in good shape or not? What would happen if the same scenario played out in two years? You consider and juggle many, many scenarios.
Step Three is the engineering reality check. I usually start with the VP of Engineering. We map what should comprise our portfolio against the company’s actual level of innovation. Then we objectively determine whether we can realistically achieve our goals.
Step Four is financial. I compare what we want to do with the budget. Can we afford to do all of the wonderful things that we'd like to do to support these goals? Do “what we want to do” and “what we can afford to do” align? Usually, the answers and alignment are not as hopeful as you’d like. Then it is time to prioritize.
You Can’t Do Everything
Q: How do you organize and prioritize everything that you’ve learned?
Kevin: Organization is on me. Prioritization is a group activity. I return to the business group leads. We discuss the information I gathered and the previously discussed priorities. It’s usually pretty obvious that we can't do everything, so I typically recommend adjustments, including focussing on areas where we can maximize portfolio effectiveness.
I work with business leaders to determine which trade-offs they're willing to make. If they’re unwilling, you have to adjust. Can you get more budget? Can you raise the innovation level within a business group? If there’s consensus on the business side at Logitech to prioritize certain things, then we can usually focus the brilliance of our engineering team to deliver. If we can’t, we have to prioritize differently or alter our portfolio development plans.
Q: Developing the portfolio roadmap appears very similar to developing an IP strategy?
Kevin: It is. The difference is big picture vs. tactical implementation. A common need with both, though, is visibility. Visibility among business unit heads is vital. You’re balancing risks and rewards now and in the future. You’re trying to figure out how many patents do you need. Their consensus and implementation support helps a lot. I coordinate these discussions and ensure everyone has the right information. Once we provide those details, we agree on a strategy to go out and file the right patents on as many quality inventions as we can.
Thanks Kevin for the fantastic advice. For younger IP professionals finding their sea legs, perhaps overseeing a corporate IP program for the first time, it’s vital to create and nurture lines of communication throughout the company.
Work hard to create and raise visibility for IP in your organization, because it will make it far easier to collaborate with everyone you need on your side to be successful.