Pros and cons of managing an IP portfolio internally

For many businesses, the decision to manage their IP portfolio internally or externally can be influenced by a variety of factors, including business size, product portfolio, number of competitors, staff and resources, and the potential and future growth of the portfolio. In this article, we will look at some of the advantages and disadvantages of managing an IP portfolio internally.

What are the pros and cons of managing an IP portfolio internally? What challenges do companies face with internal IP portfolio management? When should you outsource IP portfolio management? What strategic tools assist in internal portfolio management? And how do costs compare between internal and outsourced IP management? Discover the answers in our short guide to the advantages and disadvantages of managing IP work in-house.

Advantages of internal IP portfolio management

• 1. Small and early-stage businesses with a limited IP portfolio and internal legal resources are usually capable of handling the associated administrative work. As such, if you have a limited budget to work with, it can be more cost-effective to manage your portfolio internally during the early stages of your business. However, even as a small business, the importance of intellectual property to the security of your business should not be underestimated.
• 2. Maintaining a strong IP portfolio requires considerable cross-team communication and collaboration to capture and share all the relevant data between the stakeholders. This process is usually easier to maintain in a lean organisation with small, internal teams.
• 3. In larger organisations, it can be costly, but advantageous to hire and manage IP specialists internally, as they would be solely focused on your business and strategy. In this way, they can provide unique perspectives as insiders with in-depth knowledge of your organisation and its direction.
• 4. Depending on your industry, it can be advantageous to maintain your IP resources internally for security reasons. Businesses with trade secrets will sometimes adopt high levels of security to prevent their IP from being compromised through data breaches. This is usually in cases where all proprietary information must either remain onsite or the time, resources, and/or cost to assess the security of external vendors is prohibitive.
• 5. If your business deals primarily in the legal sector, you may already have an abundance of highly-skilled and knowledgeable IP specialists within your organisation, as well as access to the relevant tools and resources. As such, it may be more cost-effective to leverage internal resources. 

Disadvantages of internal IP portfolio management

• 1. By maintaining your IP portfolio management internally, your business may be forgoing the opportunity to have an external perspective on managing your portfolio strategy. While it is advantageous to have internal IP experts who are close to the business, the knowledge and experience of an external specialist are also contributive to developing a strong IP strategy. Building a smart portfolio is the best advantage for any business.
• 2. Without the right resources, managing your portfolio internally can actually be costlier than working with an IP consultant. Building and maintaining an IP management team requires specialist knowledge, especially as you expand your business and add new IP assets. An IP consultant continuously maintains and assesses your portfolio to determine the costs versus potential revenue, so your business knows when it's best to unburden itself from unprofitable IP assets.
• 3. Managing your portfolio internally may require focus and attention that your internal team cannot afford to provide during that time. For instance, if your company is launching a new product and your legal team is overwhelmed by the administrative work involved with IP applications, an IP consultant can take the overflow work. In this way, you also offload the burden of hiring, managing, and potentially downsizing your staff.
• 4. If you are a small or early-stage business, it may not make sense to invest a large proportion of your budget into in-house IP tools and resources; this can become costly and prohibitive. As such, managing your portfolio internally would mean you cannot access the same tools and resources as your competitors. By working with an external IP consultant, you have the benefit of specialist IP resources at a significantly lower cost to your business.
• 5. Limited availability of internal resources within your organisation may also be limiting the potential growth of your IP portfolio. This can result in lost future earnings for your business, or even worse, a new market competitor with a similar offering that puts you out of business. While your company grows, capturing all potential IP assets is the most crucial part in securing your place in the market. It protects your competitive advantages from infringement while hindering market entry by your competitors.

To read best practices for managing your IP portfolio, whether you choose an in-house, outsource or hybrid approach, download our white paper on 'Best practices in trademark management'.