Cutting out wasted IP
For cleaner, more profitable IP portfolios, cut out waste and complexity by adopting lean principles from the start, says Oliver Baldus
In lean production, waste is defined as anything for which customers won’t pay. Since the late 1980s. pioneers have pursued lean to flush out the inefficiencies in mass production. As a term, lean has since expanded to start-ups, procurement, marketing and HR. Now is the time to apply the same principles to intellectual property.
For all the value it creates on the upside, IP remains by most estimates prodigiously wasteful. According to Forrester Research, firms in the US fail to extract $1 trillion in value from their IP every year. Or to put it in another way: in the EU, it is widely accepted, that only 15 percent of patents have any value to the market.
How did such a state of affairs come about? And can we become leaner and cut out the waste? Yes, if we change our governing principles to an external view of the firm and a top-down approach.
External view
It is not required to protect products that are interesting to us but not to others, ie, we should start registering IP from a market perspective. We should protect products that have relevance, which are interesting for others and that can be commercialised. For these products, it is automatically possible to find potential infringers.
The external view teaches us that the value of IP is a direct proxy of the market potential of the protected product. As the market potential of the product varies over time, IP’s value varies too.
Top down
It is inefficient to scatter mines completely randomly over the battlefield. We should use our mines at places where the enemy comes along. Thus, top management decides where to place these mines to reach its strategic goals with respect to other targets. As a prohibition right, any IP without a possible infringer is a worthless asset that can be actively abandoned.
Common examples of waste include independent claims that:
Describe protected matter in a too much detail.
Comprise features that do not contribute to the technical solution.
Cover strange or obsolete matter that will never be used.
Leveraging IP
After all the cleaning processes, the next step is for top management to define specific goals that can be leveraged with IP rights. Examples of these strategic goals could be:
Gain market share from our direct competitor.
Lower procurement prices with our largest supplier.
Yield higher prices for our products purchased from a particular user.
Now the question is, should we really exert our IP rights? What could happen? In fact, it may not be wise to do so. If we treat our competitor aggressively, it is likely that they will respond. In this situation, we own IP assets that are in principle value adding.
Unfortunately, we cannot use our rights since we are in an inferior position with respect to our target, so they are not adding value and remain inefficient waste.
· The full article by Oliver Baldus, ‘Switching to lean IP,’ appears in Managing Intellectual Property Today, 2026/27 edition. More details here or at novaropublishing.com/ip.
