Lean-Sigma tools applied to Intellectual Property processing

Intellectual Property (IP) Process Improvement Using TOC / Lean / Sigma Tools

Early in 2007, I was invited by a General Consul friend of mine to come help him with his office flows. He had referred me to a company that had become a client, and as a “thank you”, I offered to do a limited number of consulting hours for him.

Basic Process Design Coaching and Project Selection

We started off by teaching him the basics of the Sluice Analogy and the Helix along with some other basic tools. The next thing I asked him to do was to list the major categories of all of his responsibilities. He said things like intellectual property, corporate law, contract creation and administration, corporate government filings, and several other things that I don’t remember. The next thing I asked him to do was to put a percentage weight on each of these items according to what percentage of his time he spent doing them. (My friend worked between 60 and 70 hours in a work week, pretty regularly, and occasionally as much as 90 hours.)

After he had put percentage weights across his major responsibilities, I asked him to put percentage weights on the items inside those responsibilities. For example, looking only at the time that he spent on, say, intellectual property, what types of things did he do and what percent of his time did each one get within all of the time he spent administering intellectual property?

The next thing we did was to sort this list according to the percentage weightings so that the “Big Rocks” would rise to the top! It became very obvious that the biggest problem, the one that took the most time and caused the most interruptions, was processing patent applications or other forms of Intellectual Property. The second biggest “rock” was Contract Administration or in other words, the creation and long-term administration of 1000 plus dealer contracts.

Sometimes when you follow this procedure, you identify process dependencies between the “big rocks” and items further down the list. If there are process dependencies, you have to handle them altogether, even when you have to cross hierarchical organizational boundaries… because they are, in fact, one process… hence the dependency. Therefore, I asked my friend if there were dependencies between any of the top three time-consuming responsibilities and anything else on his list. He said that there were not. Therefore, we could choose to commence on any one of the top two or three items all by itself.

We decided to work on the intellectual property process. This process consumed about one third of his time and was chronically high-crisis. In addition, it was difficult to get other people in the organization to give him information or to reply back to him.

(Note: there are many other TOC / Lean / Sigma tools to identify central system constraints. However, in this case, simple subjective ranking was sufficient.)

1st Value Stream Map

The next thing I asked of him was to create a Value Stream Map of this process… as best as he could. On my next visit, I took a look at it. Predictably, it looked very similar to the “spaghetti-flows” that exist on manufacturing shop floors from their initial effort at mapping their own process flows! When I asked him how he got anything done with this flow diagram, he indicated that it was very difficult to get anything done!

Frequently, a characteristic of the first flow diagram is that the flow arrows might as well be double ended. Or in other words, there are so many information or production flows back and forth between the same boxes that you can’t tell what comes first or what comes second or what comes third just by glancing at the flow diagram – or even by closely studying it. This applies in general to the first flow diagram efforts anywhere on the TTZ, whether on the shop floor, in service operations, in information management, or in the problem-solving functions. So, I asked him to redraw the map in a forward flow manner… listing the same resources over and over again, as necessary, to reflect a one-way flow, from beginning to end.

The curious thing is that Lean/Sigma methods had permeated the production floor in this organization, along with the expected and routine magnitude improvements in that venue. However, since Lean/Sigma was viewed as a “terrific thing for the Shop Floor”, in this organization, it had never penetrated to the 2nd tier of the TTZ, and certainly not to the 1st tier, where my friend’s operation resided!

2nd Value Stream Map

On my next visit, we reviewed the second iteration of his process map. It seems he had been talking with the owners and other senior managers in the company, and some of them had taken an interest in this process. After all, they all recognized that intellectual property was the long-term lifeblood of their organization, even though processing it was a major, reoccurring hassle for my friend!

By our next visit, my friend indicated that it was becoming gradually less painful to get intellectual property to go through the process. He was beginning to get greater cooperation from the Research and Development Department, from the Marketing Department, and from the heads of other departments who had been involved (read that: Informal Kaizen Improvement Team) in evaluating intellectual property processing. Apparently, intellectual property processing was a thorn in many of their sides… and had not operated well, possibly since the company’s inception. They all realized they had to do it so there was a common interest in getting it to work much better. However, none of them really knew how to go about doing it smoothly from their own “silo.” Intellectual property, by the way, had always been tossed from silo to silo within the organization, without ever trying to connect the functions! (See the TTZ Overview article and documentation, especially the Great Boss Dead Boss Demark article.)

By the second iteration of the process map, my friend was able to point out the process bottleneck. It seems that the strategic decisions for intellectual property were made by the Strategic Marketing Committee which met on an infrequent basis, and only by invitation. Apparently, a number of the people on this committee were very difficult to get hold of and had fairly intense travel schedules. So, getting a meeting together for them was a very difficult thing to do and was only done once or twice a year.

In fact, in order to move an intellectual property concept from initial idea to “Yes, we are going to formally apply for a provisional patent”, the idea had to go through this committee four times! This is the main reason it took two or more years to process their intellectual property… when the committee only met twice a year, even if an item was at the top of the agenda, it was going to take two years!

I told him that we had found the constraint! I asked him what it would take to have this committee meet every two months or every month and a half! The idea, from a Theory of Constraints point of view, is that every other resource along the intellectual property process had excess capacity… and could catch up… or even feed information into this high-level meeting. It was the people in the meeting itself, or more specifically the fact that they never met to make decisions on intellectual property, that was the systemwide constraint.

According to the Theory of Constraints, the only way to increase a process’s overall throughput is to increase the capacity of the actual process constraint. In this case, the committee was the constraint. I figured that we had arrived at the next step. Until this committee actually met more frequently, there would be no throughput-time decrease for intellectual property processing.

Well, it seems that as the committee members understood this constraint to intellectual property, or in other words, understood that they were the constraint to intellectual property processing, they completely changed the way it was done!!!

3rd Value Stream Map

When I came back the next time, my friend said that he was extremely pleased with the current way they were doing it and showed me this third process map, or actually drew it on the whiteboard in his office because it hadn’t been formalized. It seems that he was no longer in charge of intellectual property processing! There was a completely new administration and process! Although my friend’s purview, that of legal research and verification, had not changed at all, he was no longer the de facto clerk in charge of the process! The new process had four stages.


As the intellectual property processing began to speed up, it seems that the company had been gathering their intellectual property ideas for presentation not to the General Console, but to an Executive Committee. The Executive Committee consisted of the Executive Vice President, the head of Research and Development, and the head of Marketing. They would get together and sort the research proposals. Their main “sorting” question was, “Are we going to proceed with developing this research idea at this time for long-term company intellectual property or are we going to move this idea into a ‘trade secrets’ status?” Trade secrets are those things that are not going to be formally disclosed as public information on a patent disclosure. They are for “future development”… or not! In any case, they are not for development at this time.

Informal Patent Search

After the Executive Committee decided to go ahead with a particular piece of intellectual property, they would send a letter to my friend requesting that his department do an informal patent search. This consisted of online research by a staff member in my friends department, under his direction, to find out if the research proposal under present consideration had been “claimed”, “not claimed” or “partially not claimed” by prior patent applications.

Formal Patent Search

If in fact the idea was not really “out there” in the public domain or had not been previously claimed or even if parts of it had not been previously claimed, then the Executive Committee could decide to go forward with a “Formal Patent Search” and would send another request to my friend for this information. My friend would then contract with a patent attorney to do a legal patent search and give the information back to the Executive Committee. If the proposal was not competing with “prior art” (prior claim or partial claim) and if the proposal was potentially sufficiently profitable, then they would decide to proceed with a Provisional Patent Disclosure.

If, however, either the informal or formal search indicated that the idea had been “claimed” and registered or even “partly claimed” and registered as “prior art”, the Executive Committee and my friend, the General Consul, would make a decision concerning how potentially profitable the idea was, compared to how defensible it was. If it was potentially very profitable, even with a risk of not being entirely defensible, they may decide to go ahead with a Provisional Patent Disclosure anyway!

Provisional Patent Disclosure

The Provisional Patent Disclosure process meant that they would disclose to the United States Patent Office what intellectual property they were proposing and would get a one year time frame in which to develop the technology so that it could be officially patented.

Following the decision to go ahead and file a provisional patent, not only would the Executive Committee be involved in this particular piece of intellectual property, but other members of the management team would begin to become involved such as the Sales Department, Production, and other entities. Note that this process involved the Engineering and Production Departments a full 10 to 12 months before they would actually have to ramp up production! Previously they had only received one or two months notice… if that… until they had to have production up and running. This new process gave them almost a year heads-up! This would allow them to get these things onto their long-term production development plans in order to get them up and running smoothly.

During my meeting with my friend, we decided that following the decision to file a provisional patent, the legal department needed to put a reminder tickler in their Outlook Appointment Files for 9 or 10 months down the road in order to re-notify the Executive Committee that the provisional patent was about to expire so they could take appropriate action. Either they could continue doing the research and formally ramp-up production or, alternately, they could discontinue research because it was not actually doable at this time.


There were several results of implementing Lean Flow Methods through the intellectual property processes of my friend’s company between January and September 2007.

  1. Instead of being 30% of my friend’s time, the intellectual property load dropped to about 5% of his time, or in other words, he “Found” 15+ hours a week! Although his purview, as legal adviser to this process, did not change, we essentially “fired” him from the massive, and unnecessary, clerical aspects of this process. This leads us to the next result.
  2. The authority and initiation for the intellectual property processes changed. My friend used to be in charge of the entire process, including getting people to report back on their part of the process. No longer. The entire process was managed and driven by the Executive Vice President, with the council of the head of Research and the head of Marketing. My friend switched status from initiator to legal adviser… where he should have been in the first place!  (Consider… for a minute… the skills mismatch waste of using the General Consul as a clerk…!)
  3. The throughput time from initial concept proposal to filing a provisional patent dropped from two years (or more, if it was not the very top of the pile) to less than two months! The “two years plus” was my friend’s best guess… no one ever really clocked it before, it was just extremely long, cumbersome, and hassle-ridden for everyone involved.
  4. Because the throughput time had dropped by 90% or more, and especially because the hassle factor to the researchers had dropped by a similar amount, my friend indicated that intellectual property that had never before come to his attention was popping out of the woodwork! In the two or three weeks prior to our conversation, a companywide database had been created to catalog all of the “popping up” intellectual property… because there was so much of it to track! It seems that the whole IP process had been such a hassle that the researchers only brought up the cream of what they considered to be their best offerings… because they just did not want to wade through the red tape nightmare that used to be the IP processes for this organization! These ideas were being captured, and “6S’ed”! Here is an example of the 6S process, as applicable to information flows (in this case IP information) versus only as applicable to physical flows:
    1. Safety for all stakeholders including customers.
    2. Sorted according to whether the company was going to pursue them at this time… or not!
    3. Set in Order by priority according to which ones the company was going to pursue first, second, third, etc.
    4. Scrubbed or Swept to prepare them individually for processing.
    5. Standard Work for the process had finally been done!
    6. Sustaining the throughput times and quality for this process was finally possible due to creating, following and updating the Patent Process Standard Work!
  5. Cleaning out the IP-to-be-processed pool. It seems that as of project wrap-up in September 2007, the Executive Committee had sorted all of the known intellectual property concepts and the legal department had done all of the processing, up to full-blown patent searches for those concepts that had been selected for the near to mid-term company strategy. The process had become so fast, and so efficient, with properly aligned authority/responsibility assignments that everyone’s headache along the way had largely gone away!  A contributing reason to why the throughput time was easily less than two months is that there was nothing else in the way… it had all either been processed or sorted into “Trade Secrets” for future development. This is the equivalent of dropping throughput times in Physical Transformation by dropping Work-In-Process Inventories through application of 6S, Quick Changeover, Quality Assurance, and Total Productive Maintenance tools. The main difference is that this process handles intellectual property information versus widgets. Nevertheless, both the process analysis and thousand-foot-elevation view of each solution looks VERY SIMILAR! Now, new ideas had to compete with those already selected for development. Either a new idea could compete or it would go into temporary storage in the “Trade Secrets” file… versus becoming just another heap in my friend’s “inbox.”

Customer Identification and Servicing

After the third iteration, or “Future State Map” of this IP process, I asked my friend, “Why is your organization directing resources towards this process? Or in other words, who ARE the customers of this process, and what DO they want?” Although obvious, this question had never surfaced in analyzing this particular process. Here is the short list we came up with in about 5 to 10 minutes:

  1. The Company itself. The Company’s long-term existence and increasing profitability relied on efficiently functioning (read that “legally defensible”) intellectual property, among other things. The company had to be able to legally defend its ideas in the long-term from those who would steal or encroach upon them.
  2. The Researchers. It seems that in this company, the researchers got a piece of the long-term profitability of their ideas as a motive to focus on the highest long-term profitability research topics. This motivated the researchers to use organization resources more effectively in their work. A much more smoothly functioning IP process meant that the researchers would have greater personal profitability potential. They would probably also receive increased lab and tool resources as well! These resources were apparently a source of status to the researchers within this organization!
  3. The Marketing Department. Marketing relied on a steady stream of new products to not only service their current clients but be able to reach additional clients with their entire product line. New products enabled compelling sales pitches, especially if the new product was complementary to an existing product. The Marketing Department also relied on a steady stream of new products in order to attract new dealers and retain existing dealers. It seems that competitors in this industry, including this one, were continuously trying to woo the dealers away from each other!
  4. The Dealer Network. It seems that the Dealer Network needed new products for their customers for the same reasons that Marketing needed new products for the Dealer Network!
  5. The Entire Operations and Vendor Network of this Company. All of these people relied on the continuing existence and growth of this organization.

As these process customers, or in project-management vernacular “stakeholders”, became visible to my friend, the Corporate General Consul, the benefit of increasing both capacity and speed through the intellectual property process became even more loud and clear.


There are three things to point out about this case.

  1. There was nothing particularly special about intellectual property processing. The only reason that we looked at this process first was because it was the biggest thorn in my friend’s side! It was my friend’s systemic constraint! We could just as well have looked at “Contracts” as well as any of a dozen other processes.
  2. The same tools that work on the shop floor also work in the information management and problem solving professions higher on the TTZ! (Also, see the Receiving to Payment article.) As I told my friend when, early in the project, he asked if that were true, “A process is a process is a process!” Bear in mind that parallel tools (Lean Thinking & 6 Sigma) were already in heavy use in their operations division on the 3rd tier of the TTZ and had been for quite some time. My friend just did not know if these tools would work in his environment. He came to learn that they do work… very, very well. He was merely further up the TTZ.
  3. The third thing to note is that even though these processes are used in abundance in the Physical Transformation and Service Delivery processes of many industries, not only do they apply higher up on the TTZ, but the higher you go the more profitable they become! And not only the more profitable, but the more effective they become at eliminating hassle and rework throughout the entire organization. In the case of IP processes, “rework” was generally done by the very expensive Corporate General Consul! More importantly, the process itself was so cumbersome and so hidden in “That is just how we do it” that it generally prevented new intellectual property acquisition versus enabling it. This was both massive and hidden Muda (the Japanese for “Waste”) in and of itself!


As a very bold move early in this process, my friend signed up to present the results of this process at the Association of General Consuls held in Chicago in October of 2007. (Hence, the urgency to be done by late September 2007!)