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How can start-up businesses have a strategy that optimises patent protection and coverage?

 

No one can pretend that protecting patentable inventions by registration is either cheap or easy, but you do not always have to register in order to protect your IP. It is impossible to devise a strategy without an in-depth consideration of the business's commercial aims, the technology involved, the competition and existing patents in different parts of the world.  There are, however, some considerations that frequently arise.

 

Your intellectual property may simply not be patentable or may not be patentable in certain countries.  (See the article on the different approaches to computer-related inventions.)  Even if it is capable of registration as a patent you may decide that you have no need to register it or at least not to register it yet.

 

The main reasons for registering a patent depend on the business's objectives and are:

 

1.                   to increase or protect your market share and profits by preventing your competitors marketing certain products or using certain processes;

 

2.                   to generate revenues by licensing an invention or the sale of patent rights; and

 

3.                   to acquire funding or to attract a buyer for the business.

 

A technology-based business that wishes to attract outside investment may need to convince potential investors that it is worth investing in by obtaining, or at least applying for, a patent. The monies invested in the business may then be used to fund further patent applications or to continue with those already made. The need for investment may therefore dictate that the business applies for a patent as early as possible.

 

If you have the financial resources and technology which is difficult to keep secret because it can easily be reversed engineered, the better strategy would be to obtain patent protection where you can.

 

On the other hand, cash flow may dictate that some if not all patent applications are delayed. The delay may be a means of confusing the business's competitors who will not be able to obtain information about the business' products through the publication of the patents. In some instances, where the business' interest is solely in using the invention itself, the better way forward may be to keep the invention secret, not to patent it and to deny competitors (and others) any knowledge of it.

 

The risks in delaying an application for a patent are that a competitor may patent the invention first and there is more opportunity for details of the invention to be made public inadvertently, so that the invention ceases to be patentable.

 

You may, however, wish to consider whether your strategy should be to publish some ideas so that your competitors are unable to obtain patent protection for those ideas.

 

The potential life of the technology is also important. If it is likely to be very short it may not be worth applying for a patent and there may be minimal risk in not having one. Something with a potentially very long and profitable life might be better protected as a trade secret, rather than have the patent rights expire in 20 years' time, long before the commercial viability of the product expires.

 

Once you have decided to apply for a patent the strategy needs to focus on where you should patent.  Again that will depend on your business's objectives, the size of potential markets, whether you want to license others in certain territories to manufacture or distribute your products and, possibly, whether you are able to find a manufacturer or distributor in certain parts of the world who is prepared to assist with the costs of patenting in those territories in return for being granted rights.

 

In each case there should be a costs benefits analysis to ensure that the likely revenues will be substantially more than the costs of patent protection. If they are not, it is probably not worth pursuing the protection.

 

Contact Details

 

If you would like further advice about any of the issues considered above please contact Christine Reid on 01865 864195 or email her at christine.reid@northwoodreid.com

 

 

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This article is not intended to be, and should not be taken as being, legal advice. The law often changes and it varies from jurisdiction to jurisdiction; the information in this article is generic in nature and specific legal advice should be taken before acting on any of it.

 

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