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Budget Management

Building the connection between patent cost and value

We understand that patenting strategy functions within tight budget constraints; and that any increase in expenditure needs to be justified. Cipher gives you the ability to analyse historic and projected costs. And using industry accepted financial models, it provides you with the evidence required to justify budgets by reference to mitigation of exposure to patent risk.

“9% of patent budgets are being invested in analysis to communicate the strategic benefit of portfolios. This investment is critical where, on average, 4.5% of revenues can be exposed to third party patent claims.”

Cipher Report on Portfolio Optimisation, March 2020

The capability that has helped us the most from a budget and spend standpoint is being able to demonstrate how we compare to competitors and others in our space and benchmark against what they’re spending on their patents. I can see how accurate Cipher is by comparing it to our own costs.

Bob Pechman, Chief Intellectual Property Counsel, Seagate Technology

Do you need to answer these questions?

How do I know whether the patent budget is being sensibly allocated?

The Cipher Optimisation Model provides a rational basis for identifying areas of over- and under- stocking. By creating a repeatable model, your patenting strategy can be recalibrated as business requirements and competitive landscapes change.

When facing budget pressure, how do you know what cuts cause the least damage?

There’s no easy way to identify your ‘bad’ patents. There are patents however that don’t serve your business objectives well. By mapping your patents to your technology taxonomy, and combining with revenue data, you can identify the patented technologies that provide the least value. This evidence-based approach provides the strategic patent intelligence required to develop a pruning strategy.

What information best conveys to the CTO and CFO the value delivered by our patent portfolio?

Many companies cannot point to direct licensing revenue. There are, however, established ways to link the cost of your portfolio to the quantum of patent risk mitigated. Executives are alive to the substantial risk of paying away substantial royalties. Explaining the relationship between your patents and the ability to neutralise threats plays well before this audience.

…then Cipher can help.

How Cipher supports your analysis of patent budget

1

Define Budget Objectives

Define the approach that will best enable you to understand how the patents in your portfolio map to product/revenue lines.

2

Build an Optimisation Model

By combining patent data from Cipher and revenue data, the model identifies areas of under- and over-stocking.

3

Actionable Intelligence

By understanding which patented technologies deliver the most value, will enable you to decide how best to align your patent budget.

Having an empirical way of pointing to why we file the applications that we file, based on data from Cipher classifiers is crucial. It helps us to make the case of what we need to do and the budget required to file these applications.

Robert Calico, VP IP & Litigation, ARM

Insights and Events

Patent budgets triggered by Covid – cutting not wounding webinar

View our webinar that addresses the challenges of managing a patent budget in a recession.
Read more

COVID 19: Mitigating the Impact of Patent Budget Cuts in Recession

Covid-19 has caused greater scrutiny of patent budgets and a need to cut costs – so where are you supposed to start?
Read more

Beyond portfolio optimisation – calculating the value of rightsizing

View our webinar discussing results of the Cipher Report on Portfolio Optimisation and the optimisation model that can help you balance your portfolio.
Read more

Portfolio Optimisation Report – Key Findings

Hear from Google, Accenture, Facebook and many other large patent owning organisations in the full Cipher report. Take a look at what the world’s patent owning organisations are saying about balanced portfolios and the various strategic objectives served by those portfolios.
Read more

Case Studies

ARM on classifiers and managing patent budgets

Rob Calico, VP Litigation and IP, discusses the challenges of managing a sophisticated portfolio in a fast-moving technology environment, and how Cipher has helped them manage their patenting strategy and budgets.
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BorgWarner on how automation increases speed and reduces cost

Technical Product Strategy Lead, Chris Kowalsky, explains the problems with existing approaches to patent search and how Cipher Automotive has improved efficiency as they develop new technologies essential to the future of the car.
Read more

Centrica on the value of Cipher

Charles Clark, Director of Intellectual Property at Centrica, discusses the efficiency gains from using Cipher and the tasty bits of data gleaned from using Cipher’s AI over conventional search.
Read more

Budget Management FAQs

Why is helpful to use both patent and revenue data when considering budget questions?

The size of your portfolio should be analysed relative to both your revenue and the market more generally. Any other approach fails to take account of either the global population of patents in a specific area or of the relative importance of that technology to your organisation.

Do financial models ignore important topics such as patent quality?

No. Both patent quality (and other subjective factors such as seriousness of threat) are taken into account. While Cipher ‘quality’ scores use indicators such as citations, age, the model expects the company to add a subjective weighting in this area.

Does Cipher provide all the inputs for its Optimisation Model?

The Cipher platform can provide the required patent numbers (both for your own portfolio and others). The revenue data will either be available internally or from publicly available sources (such as SEC filings). The Cipher Solutions team is able to provide additional consultancy support.

Can Cipher help in the identification of our best patents?

No. Cipher does include industry standard measures of ‘quality’ (e.g. citations, age, geography). As of now, it is beyond AI to identify definitively what is a ‘good’ patent in key areas such as validity and infringement.

With Cipher you can also…

Gather competitor intelligence

Understand who’s doing what by automating patent to technology mapping

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Model cross licensing

Combine patent and revenue data to determine rational licensing outcomes.

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Optimise your portfolio

Ensure you have the right portfolio to meet your strategic patenting objectives.

Read more

Conduct due diligence

Automate manual reviews for efficient execution of M&A and licensing transactions

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Tackle inbound patent assertion

Be prepared with evidence to create a fast and effective threat assessment.

Read more

Benchmark your portfolio

Assess your portfolio in comparison to other owners through your own technology lens.

Read more

Monetise your portfolio

Identify opportunities to create value through licensing or sale of patent assets.

Read more

Why Cipher

Trained by humans, built by machine to give you independently verified accuracy

“Cipher’s classifiers enable you to understand the patent landscape or analyze a portfolio. Combining expertise in both IP and data science, Cipher provides you with solutions to the strategic problems patent owners face, with quick and accurate results.” Erik Oliver, Richardson Oliver Insights

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Improve your patent strategy now

Speak to one of our Cipher team today.