KEEP YOUR ANNUAL IP SPEND WITHIN BUDGET WITH OUR PRIORITIZATION MATRIX TOOL (Full Version)

SUMMARY 

In this post we present a prioritization matrix tool that enables your IP team to dedicate an appropriate amount of resources to its highest value tasks and remain within its monthly, quarterly and annual budgets. For patent prosecution tasks, the matrix tool relies on prioritization not only at the patent family level, but at the individual patent application/country level as well. Such prioritization requires open and frequent communication with business, R&D, and clinical teams to ensure alignment. Importantly, the matrix considers not only the value of a task or its underlying IP (e.g., patent application) in its prioritization, but the difficulty of an individual task as well. We have effectively used this tool to stay within the evolving IP budget and priorities of our biotech corporate clients. 

INTRODUCTION 

It can be difficult for a company to keep its intellectual property (IP) spend within its IP budget while effectively building its patent portfolio and steering product development activities away from competitor patents. This is especially true for private biotech companies where priorities can shift abruptly, and where funding can vary substantially from year to year, or even quarter to quarter.  In this post we present a prioritization matrix tool that enables your IP team to dedicate an appropriate amount of resources to its highest value tasks and remain within its monthly, quarterly and annual budget. 

Some patent expenses are predictable and should be considered when setting annual IP budgets and priorities. These include, for example, PCT and national stage filing deadlines, as well as publication dates and 1-year post-publication dates. We previously identified five categories of deadlines for annual patent budget planning, consistent with our general annual planning process.  

Despite these predictable annual IP deadlines, there are a number of variables related to individual IP tasks that are difficult to predict at the time annual IP budgets are set. For example, how many office actions will we receive this year for our pending patent applications, and in which countries? How difficult will those office actions be to overcome? How many new invention disclosures will we receive this year from our scientists/engineers, and how complex and different will those be compared to prior filings? Will product development priorities remain constant? Will promising corporate partners demand reps and warrants around technology FTO?   

Variables that affect IP spend, such as those listed above, make it difficult to stay within an annual IP budget. There are four common practices to help deal with this issue: 1) Setting an annual budget based on last year’s spend, taking into account foreseeable large-spend items like national stage patent filings; 2) Tiering patent families by value to the owner entity, to identify how extensive geographically, to file/pursue patents for each family; 3) Capping the budget for individual patent applications and responses; and 4) Negotiating down billable rates from a law firm and/or selecting firms with lower rates. In our experience, while these are helpful practices, they are not nearly enough to maintain patent spend within an annual, quarterly, and/or monthly budget, while assuring that your company is getting maximum value for its IP spend.  

In this post we present a prioritization matrix tool that enables your IP team to dedicate an appropriate amount of resources to its highest value tasks and remain within its monthly, quarterly and annual budget. 

1. Set a Value for Each Patent Application 

IP teams often set tiers for patent families within a global portfolio, but often they do not consider the value of an individual application within a family as they prioritize resources. Yet tasks and spend are based on each application individually, and the value of individual applications vary greatly within a family. For example, a pending patent application in the U.S. usually has much greater value than an application pending in Brazil or New Zealand for that same family. Thus, a prioritization system must take into account the value of an individual application, not just the tier/value of a patent family. 

Figures 1A and 1B provide exemplary tables/rules that can be used to set a value of an individual application based on the value of its patent family and jurisdiction. In Figure 1A the value of an application is set by the lower value of its patent family and its jurisdiction. Thus, a high value application in a low value jurisdiction is set at a low value. A similar matrix is provided in Figure 1B, except that this table uses the higher value of a family and jurisdiction to set the value of an individual application, and sets a medium value where the jurisdiction and family value combo is high/low. The rules of figure 1B may be more appropriate when a company has a higher IP budget relative to its portfolio size and FTO activities, versus when the Figure 1A rules are used.  

2. Use a Prioritization Matrix That Categorizes IP Tasks By Value And Difficulty 

Now that we set out rules for setting the priority for an individual patent application in a global portfolio, individual IP tasks can be prioritized using a prioritization matrix that includes pending tasks for these applications as well as other IP tasks, and buckets them in two dimensions, based not only on their value, but based on the level of difficulty/time to complete the task as well. Such a matrix template is provided in Figure 2.  

The exemplary matrix template illustrated in Figure 2 spans 3 months and includes separate sections for responses to office actions, pre-examination amendments to pending applications, and other tasks, such as new application drafting and FTO activities. Based on the size of your portfolio and the number and type of other IP tasks, you can include more or less sections and break the sections out in a manner that is most useful to you. We have used a 3-month time span on the matrix because most USPTO Office Actions are due at 3 months, and thus such a matrix typically will include all outstanding Office Actions. The key is that individual tasks are categorized according to the value of the patent application or IP activity (e.g., FTO analysis) and the difficulty and amount of time to complete the activity. 

In the exemplary matrix template of Figure 2, the sections marked with 1 should be completed first because they are the greatest opportunity as they relate to relatively easy tasks for high value cases. If there is sufficient budget remaining after completing priority 1 tasks, tasks marked 2 and 3 (i.e., easy and medium difficulty tasks for medium value families, easy tasks for low value families, and high difficulty tasks for high value families), should be completed. Tasks in quadrants marked 4 or 5 should be completed last, and only if budget permits and if the client confirms, because these are difficult tasks for low value cases.  

In the link below, we include a template matrix file with exemplary tasks for a hypothetical client. In this exemplary file we include some tasks for a hypothetical client, Bob the Builder, for month 1. In practice, months 2 and 3 tasks would be filled in as well. For any given task for a matter, it is typically only listed on the matrix based on its next due date, or target date if it is a soft deadline. If an extendable date passes without completion, the task can be moved to the next month. Tasks on final deadlines can be bolded or highlighted to assure they do not pass without approvals and appropriate discussion. You can download this matrix spreadsheet file and use it to create your own matrix. 

IP Task Matrix BtB.xlsx

Download XLSX • 10KB

Two mechanisms to help manage patent prosecution costs using that matrix are worth noting: extensions of time and for U.S. applications, continuations-in-part (CIPs). For example, extensions can often be used to help balance prosecution costs from month to month without abandoning an application. Although there is a cost for an extension, usually the cost is minor compared to the cost of patent agent/attorney time for completing the task. When active prosecution occurs for several U.S. patent applications that are of related technologies and with priority dates that are within 2 or 3 years, it is often possible to file a CIP application that combines parts of these applications, to push out significant substantive activity for a year or more. 

Regarding likelihood of success for a response, this can be considered in the “difficulty” level. For example, if a patent examiner has persisted in a final rejection after you have made your best arguments in a prior office action response, then you might increase the difficulty level for the next response even if you could use many of the same arguments. Alternatively, the matrix may help you identify these “difficult” activities, that may be worthy of other approaches, such as filing an appeal for a high value application, or filing a CIP for a low/medium application(s). 

3. Use Regular Meetings to Confirm Priorities And Budget 

The final part of effectively using your IP resources to maximize the value of your IP portfolio and minimize your IP risks, is to assure open and regular communication between your IP team and your R&D and business teams. By using the prioritization matrix above to prioritize their work, your IP resources will focus on the highest priority and “lowest hanging fruit” tasks based on their understanding of priorities. Furthermore, by using the matrix, your IP team can assure it remains within the budget that has been communicated to them. Thus, to effectively manage its IP tasks your IP team needs to assure it has set the value of your patent applications correctly, and that it understands the current IP budget for the company. 

Regular and open communication between your IP team and your company’s business and R&D teams, provides the final critical piece of this IP budget and effective management process. To accomplish this, we recommend regularly scheduled meetings, as well as a culture of open communication between your IP team and your R&D and business teams. Figure 3 provides an outline of meetings that can be used to assure alignment between your IP strategy and resource allocation using the matrix, and your R&D, clinical, and business strategy.  

SUMMARY 

In this post we present a prioritization matrix tool that enables your IP team to dedicate an appropriate amount of resources to its highest value tasks and remain within its monthly, quarterly and annual budgets. The matrix tool relies on prioritization not only at the patent family level, but at the individual patent application/country level as well. Furthermore, the matrix considers the difficulty of a task in its prioritization. Finally, the matrix tool requires frequent and open communication between your IP team and your company’s business and R&D teams, to assure that it stays aligned with your R&D, clinical, and business strategies. We have effectively used this tool to stay within the evolving IP budget and priorities of our biotech corporate clients.  

---

About DHL

Double Helix Law (DHL) has decades of experience building strong patent portfolios for life science companies. Learn more about DHL and meet the team.

Want to stay updated on life science patent law? Subscribe to get notified of updates

---

The content on this website (including all pages, articles, and comments) is not legal advice, and does not and is not intended to form or constitute any attorney-client relationship. The content is not a solicitation for business; it is for educational and entertainment purposes only, and reflects the personal views of the author(s) only and not those of any past, present, or future client of DHL. Any content should be double-checked for accuracy and current applicability, and liability is disclaimed for any error or omission.

6/30/25 Published (EJV)