Overshooting the annual IP budget puts pressure on the company’s bottom line. Under-spending could negatively impact future budget levels. Effectively managing costs is a crucial step for strategic IP portfolio management. Without good cost control, IP leaders are not well positioned to manage higher-order priorities, like optimizing the agent network, licensing the portfolio and aligning spend with business strategy. To hit budget numbers consistently, IP leaders need the ability to predict their future IP spend accurately.

But trying to predict IP costs accurately is extremely complex. Fees vary from one jurisdiction to another and can change without warning. Gathering updated cost data is time-consuming. Making assumptions about future spending can lead to subjective guesswork.

A new forecasting solution

IP leaders need objective analysis that eliminates complexity and generates reliable budget forecasts. That capability is now available with Forecast from Clarivate.

Designed specifically for legal teams managing large IP portfolios, Forecast provides powerful IP budget forecasting and planning capabilities, seamlessly integrated with Clarivate IP Management Software (IPMS).

Forecast uses sophisticated artificial intelligence (AI) to perform predictive analyses based on portfolio trends using accurate, up-to-date cost data. It provides objective information to improve budget planning, support informed financial decisions and stay ahead of changing conditions.

Transforming budget planning

Easy and intuitive to use, Forecast transforms the IP budgeting process by enabling IP leaders to generate reliable forecasts quickly and efficiently, view costs across their portfolio, with powerful filters to zero in on critical data, and compare actuals to forecasts, helping them stay on track. Analyze data with ease using visual dashboards and custom reports. Assess different scenarios to make informed decisions with a clear understanding of their budget implications.

Forecast provides the next-generation tools IP leaders need to hit their budget consistently while dramatically improving their efficiency and speeding budget approvals.

To get the full Forecast story download our report Transforming IP budget forecasting.

Ready to sharpen your budget forecasting accuracy? To learn more about Forecast, contact Clarivate today.

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IP is undervalued

A 2022 Aon/Ponemon Institute report found that many businesses undervalue intangible assets relative to tangible assets despite the fact that intangible asset values are increasing faster than those of tangible assets.

While innovation is increasingly driving business growth, innovation performance is lagging in many organizations. In a survey of 215 corporate leaders in roles relating to innovation and R&D, only 6% of CEOs were satisfied with their innovation performance. Only 11% of survey respondents considered their organization to be at a stage of innovation maturity, with well-integrated business practices.

New standards and rules

A key issue in the valuation of IP has been the lack of standard accounting practices for valuing patents. Research suggests that traditional approaches used in Property, Plant and Equipment (PPE) accounting (cost-based, revenue-based and replacement value) are insufficient for measuring the contribution of intellectual property to a business. Since adopting IAS 38 Intangible Assets in 2001, the International Accounting Standards Board has made several revisions to reflect the growing importance of these assets. Recent reforms include new accounting standards for IP assets and new rules designed to increase transparency. Amendments to International Financial Reporting Standards (IFRS) issued in 2018 and 2020 for measuring and reporting on goodwill place increased emphasis on IP as an asset class to be measured.

Recent judicial decisions are also impacting IP management. In DuPont v. Medtronic Vascular, the court found that corporate officers have an affirmative duty to monetize their corporation’s intellectual property. In Miron v. Microsoft Corp., the court determined that directors have a fiduciary duty to license IP at fair market value. This highlights the importance of increased transparency in the way corporations manage their IP.

Given this reality, financial management of IP is rapidly becoming mission critical. In today’s global marketplace, with the proliferation of patents and trademarks held in jurisdictions worldwide, the fees for applications, local agents and renewals associated with maintaining a large IP portfolio constitute a major corporate cost center that requires careful budget management.

Take control of your IP budget

That puts corporate IP leaders in the hot seat. Exceeding your IP budget could impact the company’s bottom line. Under-spending your budget creates its own potential problems in organizations with a ‘use it or lose it’ approach to budgeting. To hit those budget numbers consistently, IP departments need reliable budget forecasting. They need the ability to ‘see around corners’, accurately anticipating their future IP spend and tracking actuals against forecasts to ensure they are on track.

Now, Clarivate is helping IP departments rise to the challenge of IP budget management with our next generation Forecast solution. Forecast gives you powerful budget forecasting capabilities, seamlessly integrated with Clarivate IP management systems (IPMS). Predictive analysis powered by artificial intelligence (AI) improves budget planning, helping IP leaders make better financial decisions, stay ahead of changing conditions and avoid under- and over-spending. That means less pressure—and more time focused on managing and protecting your IP assets.

Look out for more information on this exciting, new solution soon. Can’t wait? Contact us to learn more.

The post Why the rise of intellectual property value means IP leaders need better budget management appeared first on Clarivate.