Patenting Strategy For A New Venture: Tips for Entrepreneurs
When planning your approach to patenting, there is no single strategy to fit every venture, but there are a number of decision factors to consider.
To begin with, for many ventures the choice isn’t simply whether or not to patent, but whether you have or can obtain the budget to make such a decision and cover the costs over the long term. Many inventors run out and file a patent without giving this detail a thought, then realise that they cannot muster the funds to maintain the patent, file subsequent patents, monitor or litigate infringement or even practise the invention. So it makes sense to sketch the beginnings of a business case – an idea of the size and value of potential market segments and the commercial route you could take to market (depending on the value chain) before committing yourself to patent costs.
First, check whether you have freedom to operate, because if you intend to commercialise something, it is important to establish whether others can stop you from doing so or can demand that you pay licensing fees.
Subsequently, you must decide whether it is worthwhile for you to establish the monopoly right to stop others from imitating you by obtaining a patent.
It is also important to identify specific parts of your invention which should be patented to obtain that commercial exclusivity, beyond protecting your freedom to operate. The cost of protecting freedom to operate by patenting every aspect of an invention could amount to more than the cost of setting up a business, and furthermore, freedom to operate can be established by other, cheaper means of public disclosure, such as publishing an article describing your invention.
So, aim to identify the parts of your invention that are so-called ‘showstoppers’; essential features of the invention, without which the product or business would either not work or not have competitive advantage over other solutions.
Assess both freedom to operate and patentability in respect of those crucial features.
Alongside this assessment, identify the less crucial or more flexible features for which, if you should not have freedom to operate, you can avoid infringing other parties’ rights by making ‘design-arounds’; in other words, by altering those features so that they still perform the necessary function but do not infringe. Finally, you might also identify details of the invention for which filing patent claims could be a superfluous exercise, because it would be too easy for others to design around them. You can discuss these issues in detail with a patent attorney.
If your competitive advantage lies in some essential features that are patentable and for which it would be desirable to prevent imitation, then it may be expedient to patent those aspects of the invention, particularly if you foresee that it will take considerable time to get your invention to market – time during which others might develop and patent an analogous invention.
You don’t want to later find yourself having to pay other parties for the right to use an invention you developed independently, simply because they patented and you didn’t.
However, in some industries and for some companies, the ability to enter the market speedily with a ready product and access customers through existing marketing and sales channels may be more central to business success than holding a patent.
Some interesting evidence suggests that a number of firms file for a patent defensively, in order to establish potential freedom to operate, and subsequently allow the application to lapse or withdraw it before the patent office makes a decision.
A patent application has the potential to turn into a granted patent as soon as it’s filed, so the 18-month delay before the application is made public may buy a firm time to do market research on the commercial value of the invention to enable it to decide whether to proceed to the examination phase. Subsequently, once the application is published, the publication may establish prior art and thus give the applicant freedom to operate (provided that the invention was not found to be covered by another party’s patent in the same territory). However, there are a few caveats to keep in mind about such a strategy. If you file with this defensive aim, and another party files for a patent application for a similar invention during the 18 months before your application is made public, that party will still have the possibility of obtaining a patent if you allow your application to lapse without being published, because the prior art status of the application is only established once it is published. In this case, the other party could limit your scope to practise your invention. And, as mentioned above, there are cheaper ways of establishing prior art.
You may instead opt to carry out an extensive commercial analysis before filing a patent application, to determine whether the patent (or likely patent family) will be worth its cost. The choice is a matter of how much IP risk you foresee and are prepared to accept as a result of postponing the decision. Some inventions are so complex that they are by nature difficult to imitate or would take a long time for others to develop independently – for instance, if they contain a combination of complex inventions. This complexity could buy you some time, particularly if you know that the expertise behind the invention is fairly rare.
This is an excerpt from Sabrina Kiefer's book, The Smart Entrpreneur, which she co-authored with Prof. Bart Clarysse.
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