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Why Microsoft is a global leader in IP strategy

Microsoft haters are not going to like it, but the company's patent portfolio has been recognised once again for its quality. For the third consecutive year, the Institute of Electrical and Electronics Engineers has rated the company's portfolio as the strongest in the software industry; while the Patent Board ranks Microsoft as number one in information technology. This follows on from a report, based on research undertaken by Ocean Tomo's patent ratings business, and published earlier this year in Business Week, which named Microsoft as having the most valuable patent portfolio. To round things off, in the last issue of IAM we published a ranking of which law firms secure the highest quality US patent grants for their clients: Lee & Hayes, which has done prosecution work for Microsoft for over a decade, came top.

As part of the article around our law firm patent quality rankings I interviewed Bart Eppenauer, Microsoft's chief patent counsel, about the procurement programme the company has. Microsoft certainly invests a great deal of time and money in identifying potential patents, drafting well-crafted applications and then prosecuting them at the USPTO. And Eppenauer was clear that quality is a driving factor behind all of this:

Eppenauer cites the importance of quality in underpinning both collaborative and licensing deals; but there is more to it than that. "It allows us to put out new products and to know that we can meet the cost demands of doing so; while it also gives customers and partners an assurance that we are committed to strong protection," he states. In other words, from a strategic IP perspective, quality patents mean freedom. Not only freedom to operate; but freedom to plan, to develop and to execute. ...

"Patent quality begins with making sure that the invention process is aligned with overall business strategy," [Eppenauer] says. Over time, [he] explains, internal processes have been developed at Microsoft to ensure that both engineers and developers understand the importance of patents and the need to devote time and effort to applications. In practical terms, he continues, that means inventors putting together detailed disclosure documents. Once that is done, outside counsel get involved. "The patent attorney has a meeting with the inventor at which the disclosure document is gone through in detail and any potential problems are discussed." ...

Although the outside counsel drafts the application after the disclosure meeting with the inventor, not only does the inventor review the subsequent document to ensure that the technology is correctly described, but in-house attorneys will regularly look over what has been prepared to make sure that quality standards are being met. "We have outside counsel guidelines that set out what we like to see in an application and what will be necessary to get over what is a pretty high bar," says Eppenauer.

Of course, when it comes to concepts such as the quality, value and strength of a patent portfolio there are very few, if any, objective measurements. Nothing is being counted and so there is always going to be an element of subjectivity in what is done. However, it cannot be a coincidence that Microsoft heads up so many rankings - clearly they are doing a lot of things very well in Redmond.

This is surely confirmed when you look at the amount of patent licensing deals the company has done over the last five or so years. I do not have an exact figure, but I do know that that last year when we profiled the Microsoft IP operation and Horacio Gutierrez, the man who leads it, over 500 agreements were in place. And since then a number of other deals have been done. Not only is that money coming into the company's coffers, probably more important it guarantees an awful lot of freedom of action and opens up myriad business opportunities in new markets. And that, of course, is exactly what a world class IP strategy is supposed to do. Love it or loathe it, I don't think that you can deny Microsoft is a global leader on that front.


Joff Wild
IAM Magazine
21 March 2010

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IP management, Licensing, Patents, IP business

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