As a patent portfolio manager, you want to keep abreast of innovations within the enterprise.
You want to detect and capture likely patentable innovation early enough.
It’s you, who best understands the importance of creating valuable IP.
Maybe you are super technical or maybe not.
You may be comfortable in one technology domain but may not understand other technology domains so well. However, you need to capture innovations from all product lines in the enterprise.
This process of patent mining can be challenging in the absence of a systematic approach.
“Patent Mining is like a treasure hunt, the key to the treasure lies in asking the right questions to the right people.”
The right people being:
And the right questions frame the patentable aspects of innovations across the enterprise. Ready to dive in? Here are the 5 ways you, the patent portfolio manager, would go about mining for patents at the enterprise.
Hanging around innovators
Tapping into existing development checkpoints
Staying up-to-date with product rollout plans
Learning key selling features from the marketing team
Knowing the strategic vision from the C-Suite executives
Hanging Around Innovators for patent mining
Having the smartest employees is wasted if there is no opportunity to uncover their inventive ideas. Hang around people within the enterprise who have titles such as developers, engineers, scientists, and product designers. Find out about the problems they are solving and the technology they are developing to do so. The company presumably hired these sorts of employees to build new things so certainly they are coming up with new ideas as they carry out their work.
Networking with these groups of technical people will lead to discussions about their work and patenting opportunities.
Tapping Into Natural Checkpoints
Product development is multifaceted. The process has many stages from conceptualization through market release with the process varying in every enterprise. Usually, during the product development process, you have natural checkpoints that you should look out for. For example, during the product development stage, you might have a proposal, design review or customer presentation. These are often opportunities to get insights so lookout for things that could be patented.
Ask questions about the uniqueness or novelty of the product being developed or its advantages. Focus on the responses and get feedback about the products satisfaction of customer needs. The feedback received would often expose a path to new improvements or enhancements that can place you at an advantage over your competitors. Feedback during the product development process identifies inventive ideas which can lead to a patent.
Staying Up-To-Date With Product Rollout
Closely watch as products get ready for rollout. Product rollout is a term used for the introduction and integration of a new product or service to the market. It is important that you listen to people talking about products that are about to be released. The key questions to ask here will be:
Is there anything new?
What is the problem that this product solves?
What are the advantages of the product?
How is it better than the previous version?
Does the new product make use of new technology?
Asking these questions can lead you to terrific new insights and you shall be able to spot some potential patenting opportunities. Timeliness is of the utmost importance here. In the U.S. you lose the right to file a patent after one year of disclosing any information about the new product to the public. Marketing often controls the release of product information to create filing deadlines.
Learning Key Selling Features From The Marketing Team
Marketing usually goes hand in hand with the process of new product rollout. It is crucial that you look out for the key selling features that the marketing team is using to sell the new product. For example, the marketing team can claim the new product is more user friendly than previous products of its type or that it is 20% faster than the previous product. Uncover the technology or innovation associated that is creating that difference, and that might be something to file a patent on.
Catching Up With The C-Suite Executives for patent mining within the enterprise
Networking with key executives on the technical staff, for example, the Chief Technical Officers, Chief Scientists, etc. is key for patent mining within the enterprise. These technical executives usually have a good grip on the strategic vision. They might not be familiar with how patents work so it’s important that you educate them. These key managers usually have their tentacles going in different product directions because they engage firsthand with the technologies used in the enterprise daily. The key managers should be trained to look out for and identify innovations or ideas that can be patented within the enterprise. It is important to catch up with these executives on a regular basis to know their innovative direction.
Let’s Sum It Up
These 5 patent mining strategies are the ways to go about gathering up inventions for patent protection. Here is a quick recap of the 5 strategies for you:
Professionals with roles like scientists, engineers, developers, and designers work on new products, and hanging around them can lead to patenting opportunities.
Tapping on the natural checkpoints like proposal, design review or a customer presentation may also help you find patentable innovations.
Whether the product is more user-friendly or 20% better at its performance; there is a good possibility of innovation that led to the improvement. Exclusively owning those marketing advantages is a must.
Many times marketing goes hand-in-hand with product rollout; learning key selling features from the marketing team may direct you toward the underlying innovations that might be patented.
Catching up with the C-Suite executives can help you spot strategic direction; as these are the people who have a complete picture and insider information on what’s happening across the enterprise.
Our founder recently talked about patent mining in one of his Youtube sessions. Here is the video:
Hope this would help you break down the sometimes-overwhelming task of identifying patentable ideas within an enterprise. Patent mining is one task and managing the patent capture is a whole different game. In the absence of the right tool, the information might just be a mess, that no one wants to get into. Hence, you might like to explore software that simplifies the process into stages:
Here is a good guide for you to evaluate the tools for innovation capture for a sound IP strategy.
Seeking investment using patents? Is a patent enough?
Myth: Having a patent is enough to seek investment!
The Hard Truth: Sorry to break this to you but a patent alone cannot get you an investment. In the absence of a proven business, it does not make sense for the investor to risk his money.
When you seek investment the most common questions asked by a probable investor are:
What are your sales?
How much does it cost you to make that product?
What are your margins?
Is your product unique? Do you have a patent?
Why do you need the money?
The purpose of all these questions is to find out if their investment can earn them good returns or not.
If you have a revenue stream that can show sales, it’s really easy for investors to value a business. It’s just a function of some sort of multiple on earnings or some sort of anticipated growth in the market. Most investors are very well equipped to understand something like that.
But, when you don’t have a prototype, sales or anything like that and you simply have a patent seeking investment, it is a much more difficult task. Because a patent is only the right to exclude somebody from doing what’s covered in the patent. You have to convince somebody that doing it perhaps exclusively has value and because the patent has so much value that even licensing the patent shall fetch them a good amount of money.
Seeking Investment Using Patents | Look For A Strategic Partner
When you only have a patent, what you need is a strategic partner not an investor. Your strategic partner is a business which gets into an agreement with you where they are as much a partner to you as they are an investor. The usual investor is only interested in profits whereas a strategic partner will help manufacture products based on your patent.
Side Note | Investment Using Patents
In this article, we have only covered the strategic partnership for seeking investment using patents. There are other ways of monetizing a patent like selling the complete patent or mortgaging it with the bank etc. We shall be covering these and more such ways for seeking investments using patents in the series of articles about patent monetization. Shall you be interested in learning more about patent monetization, kindly fill the form below!
Steps To Find The Strategic Partner
List down the companies that manufacture products in the space you have the patent in.
Study these companies to find out:
Which of these would be interested in having the next new feature in their product?
Which of these companies is looking to differentiate itself from the competitors?
Is there any company that is in the tight position that hasn’t had a good technology in a while?
Which of these companies is an established player that always wants to stay on the top?
There also is a possibility to find a supplier to the company that manufactures these products and might be interested in your idea.
Select 2-3 companies from this list and propose the partnership to them to progress further.
Finding the information mentioned above is a difficult task and IP research firms shall be your best choice to help here.
The IP research firm will try to understand your motivations behind creating the patent to familiarize themselves with your invention.
The IP research firm shall then study the market players in the domain of your patent. By study we mean their product lines, patent portfolios, competitors, financial standing etc.
Not just curating the list of strategic partners, the IP firm will be able to position your patent in such a way that prospective partners can identify its value.
Impediment for Strategic Partner
“To invest into something that doesn’t exist is expensive.”
However, there is a way to justify this expense – ‘Exclusivity’.
Let’s take a look at the timeline below to understand this better.
Once you get into a strategic partnership the partner shall help you with the development of the product. The average time for a patent to be developed into a product is around 18 months. That’s a conservative estimate. After the product is ready, the strategic partner should have unbridled access or exclusivity rights to sell the product for at least 2 years. Once the 2-year period is over, it is expected for the product to have broader demand and more competitors wanting a piece of it.
After the period of exclusivity rights for the strategic partner is over, you can increase the exclusivity period by taking a fee. Or you can license the product and earn royalty.
Reduce The Risk For The Strategic Partner
Having a patent is good, gradually you should progress on a path that minimizes the risk for probable partner or investor to venture in your idea. By progressing through each step from patent, to prototype, to beta-testing, to product, to sales you are minimizing the investment risk. Once you manage to get good sales, you shall need the investment to scale. And that shall be comparatively easier to get.
If you have a patent and not a proven market for your product; seeking investment using patents becomes a herculean task. The best option is to look for a strategic partner. A partner who is in the same product line and can help you manufacture your product. At the same time, you need to convince that strategic partner that it shall also benefit hugely in this venture.
For finding and convincing a strategic partner, you shall need help from an IP research firm. The research firm shall create a report showing the unique value proposition of your patent. The firm shall also curate a list of probable strategic partners. You can select 2-3 from the list to work out the strategic partnership. Offer exclusivity to convince for partnership.
While looking for a partner, keep progressing to minimize the investment risk; patent -> prototype -> beta-testing -> product-to-market -> sales.
With this we wish you all the very best to find the right partner!
A global patent portfolio strategy depends on the vision of the enterprise. The three main considerations are:
Market Expansion in Different Geographies.
Patenting Costs Vs Profits.
Studying Competitor Markets.
There is a golden rule for successful global patent portfolio strategy:
Pick key markets that lock up at least 60% of the future revenues for the product as inexpensively as possible.
Filing patents is an expensive affair. Let’s say, you wish to get patent protection on your product in China. It shall cost you somewhere between 20000 to 50000 USD. This cost involves not just filing but also patent attorney expenses, professional drawing expenses, patent office expenses, government taxes, etc. Say you wish to expand your product line in China, the IP investment shall make sense only if there is a good demand for that product in China. Otherwise, spending so much money without significant returns is going to hurt you.
Here is how you can create a global patent portfolio strategy without breaking your bank:
Market Expansion in Different Geographies
Why do you need to file patents outside the country? The answer to this is simple: you may be making profits in those areas. Your product may have a market outside the country and you plan to expand in those markets.
If you own the IP rights for a product only in the US, you can not stop anyone else in the rest of the world from making that product. You need to apply for patents in each country. Multi-country protection is possible in places like Europe, Africa and Russia.
But, do you need IP protection in each of the 195 countries in the world?
No, there is no need to protect your IP in countries that might not have potential customers.
Before you make a decision, it would be great to do little math because the different costs involved in patent protection add up real quick and the sums become humongous. To give you a quick idea, in the US, the costs for filing a utility patent ranges anywhere between $8,000 and $15,000. Under the Euro-Patent Cooperation Treaty (PCT), the cost of filing a patent is 47,000 Euros and it is valid in eight European countries. In India, the cost of drafting a patent application costs anywhere from $350 and above. You can know more about patent filing costs in more countries by using this link here. The more countries you look for protection in, the costlier it gets.
Unless these costs can be covered up with the huge market potential in those countries, you should think hard before spending money in procuring patent protection there. If you think that stopping your competitors from being able to sell a similar product will add to your bottom line, then do go ahead with protecting your IP. The question to ask yourself is would you be able to recoup the money and make a profit if you sell in this market?
Look to see where you are going to make money and how the market is going to evolve over the term of the patent. The market landscape keeps changing. Although a patent protects you for 20 years, things keep evolving much more rapidly. You need to have a pulse of where the market is heading, the costs associated with IP protection, and your own objectives.
Studying Competitor Markets
Apart from having a patent in the country that you operate, you should also identify what your competitors are up to. A local competitor might be making huge money by selling a product like yours in another country. But you cannot stop them as you do not have any IP protection in that country. You need to protect your IP assets in that country to either stop them or license your technology.
For example, you have a patent in the United States and you are only doing business there, but your competitor makes most of their money in Mexico. Picking up a patent battle with them in the United States may not be harmful to them, hence you would want to expand in Mexico and assert your patent there.
Does this make you worried about the IP expenses in various countries? Here’s the good news: you don’t have to protect your IP in all the countries in the world. That would be a frivolous waste of money, time, and resources. All you need to do is ‘make it painful enough so that the competition doesn’t want to introduce a competing product.’ Identify the key markets and lock these markets. The following section tells you how.
Lock key markets (Rule of Thumb)
Sometimes the thing to consider is that you get a broader protection in the countries you file in. For example you have a big patent portfolio in the United States. The likelihood that a competitor can launch a really similar product and sell only in Canada (which has only 1/6th of the population of the United States) is very less as some of the products require a lot of investment before you can make money in a country. Hence, the economics of protecting the market and building the market may not be there in Canada. So if some of the profits can not spill to the United States, it would be very difficult to build out the North America market. Thus, the United States becomes one of the key markets.
Similarly, there are key markets in Europe such as France, Germany and the UK. Once you get a protection in these countries, there is very less likelihood that a competitor is going to release a product in the other smaller jurisdictions such as Monaco, Liechtenstein. Hence, you don’t need to file in all jurisdictions. All you need to do is ‘make it painful enough so that the competition doesn’t want to introduce a competing product.’
For example, you have a strong patent portfolio built out in Germany. Because in Europe, the borders are very porous and Germany is a big market, any patent asserted in Germany is going to be very painful to your competitor, who might have wanted to sell a similar product. Most of the retailers, and sales channels are all across Europe, and a lot of retailers would not want to sell a product only in one part of Europe and not in the other (as it makes the logistics very difficult). Hence, if you are asserting a patent in one of the key markets in Europe, which is Germany, the competition may have to shut doors to all of Europe.
While a world-dominion for your IP protection might sound fancy, it will certainly not be the smartest move in your playbook. Here’s what we would suggest to you:
Pick key markets which will lock up at least 60% of the future revenues for the product as inexpensively as possible.
Let’s say you are in the electronics and software space, just by protecting your IP in Europe, USA, and a few Asian countries, such as China, you can lock up most of the market for many products. Getting coverage in these jurisdictions will cost you roughly $100,000. (Disclaimer: The rates of getting your IP protected also depends on the kind of patent. The $100,000 number is approximate for basic IP protection.) By protecting your product in these markets, you leave your competitor high and dry as they are forced to compete in secondary markets. Would that even be worthwhile for them? Chances are high that they may end up focusing on a different product which will make financial sense for them.
While some companies might look at rich markets, there are industries where a huge population is appealing when they sell low-cost items. Drug manufacturers might prefer to go by headcount when it comes to deciding the countries that can be a part of the 60%.
Hence, figure out what the revenue model for your product is, identify the key markets and lock 60% of your market as inexpensively as possible.
Protecting your IP can be a tricky business in itself. Coming up with a strategy to protect it from competitors in countries where your IP is not protected deserves a lot of your time and effort. Having the right strategy in place with an IP Consulting firm can save your firm big money. Hire an experienced IP attorney to help create a global patent portfolio strategy.
As a fledgling company looking to make your mark, you have to be defensive. The lawsuits are quite a costly affair and can certainly be lethal. You will find yourself being pushed into bankruptcy even before you can really get going. Patents are expensive. But the protection that a strong patent portfolio can give your company is unmatched.
Seek first to understand, then to be patented
Building your own patent strategy is personal to your business and its goals. It largely depends on your company’s strategic vision. But it is also important to understand your competition. Possessing competitive intelligence is key. To build an effective patent strategy, understand your market and your competition. If you are entering a market space that is patent heavy, investors will be expecting you to have patents as well. But how many do you need? And where should you start?
Start from the very beginning
A good place to start is Google Patents. Let’s say you are a start-up that’s entering the marketplace with a product that is a virtual assistant. You might suspect that in the digital age, this is a heavily patented space. A simple search on Google Patents will list for you the details of many patents in the space. You will find details including who are the inventors and owners along with many similar patents. The free platform provides a comprehensive coverage of every patent. The status of filing, litigation (if any), the office it has been filed in, etc. is all available to anyone. Spend a little more time studying the competitor innovation along with their filing their habits in the patent world. This will help you build competitive intelligence as you pursue your own patent portfolio.
Without patent(s) to protect the innovation in your product, you will be a pigeon amongst cats. Without patent protection as a defense, you are exposing yourself to attack. This can be in the form of infringement suits or threats that scare away your customers. Competitors will look to shake confidence in your investors or slow you down before your IPO. Or worse still, look to remove you from the marketplace before you reap its rewards.
Before you build your portfolio to protect your company, go back to the drawing board. Relook at your vision for your startup and draw a blueprint of your product’s journey as it navigates past the competition. Mark out where you want to be in the next six months, year, five years, and then long term. Once you have the answers to those questions is when you choose which patents you want to pursue.
Build a Portfolio; Ward off Litigation
Did you know you are less likely to be sued with a strong patent portfolio than without it? With a patent portfolio, you are reducing the risk of the patent suit out of fear you would countersue. You are also giving yourself a chance to go on the offensive when you need to.
Sharks (large companies with many patents) are always on the lookout for little fish (start-ups with little to no patents). By not having patent protection, you are more likely to lose a patent lawsuit. The reason is not only statistical but logical. You become an easy target to go after as there is little chance of countersuit and even if unsuccessful, a small company can be bled out with the extraordinary litigation costs.
But patents are an expensive affair. (Read this to know everything about costs of IP in the US and this to know how to make your money work for you.) Choosing the right patents to have is an important part of competitive intelligence. If your portfolio is too small there is more risk of losing a patent battle. Your portfolio should be commensurate to your position/station in the marketplace. Having a portfolio that has about half the number of patents as compared to a competitor twice the size is a good rule of thumb. Being in this position will allow you to counter-sue. When the competition knows that it is susceptible to a countersuit, it is less likely to take you to court.
In Sum, Strategy First
A strong patent portfolio doesn’t always mean having a ton of patents attached to your name. A strong patent portfolio is something that is unique to your company’s innovation. It is something you think about as much as you think about your product. Having the right patents is as important as having the right product while procuring patents to match your growth timelines. This can be difficult with all the distraction that product development and new releases can bring.
Having a strategy and growing your portfolio along with your product success will strengthen your market dominance. Seek professional advice in building your patent strategy. That way, you stand to make the most of your investment. We’ve got Google’s most asked patent questions answered here for you already! Patents can be your biggest business weapon and most attractive assets. They attract investments when your fledgling product gains market while protecting you when you grow. So choose wisely, build well.
‘Patents are expensive, why don’t we just trade secret everything?’ If this is a thought and cost cutting is something you’re looking to do, read on. It is no secret that investing in patents is an expensive affair. At the same time, a rich IP portfolio is very advantageous. Here, we talk about Patents, Trade Secrets, and Defensive Publications as IP tools to help you decide which one to be used in which scenario.
A trade secret is any information that’s unique to your enterprise and gives you an advantage over your competitors. As a company, this could include formulae, technical data, code, manufacturing data, customer information or any other technical, scientific information that a company may take steps to keep secret. To keep such things as a trade secret does not require any money however you need to take care of certain things to maintain the secrets (as described later).
A defensive publication is a disclosure of invention by the inventor to the public. This disclosure allows the inventor to safeguard the freedom to use this invention by preventing others from patenting it.
In the event a patent is sought to be obtained for the same or similar invention, a pre-dated defensive publication will act as a deterrent to the issue of such patent.
A patent is an exclusive right granted by a government for an invention, which is a product or a process that provides, in general, a new way of doing something, or offers a new technical solution to a problem.
In order for an invention to be patentable,
It must be new
It must involve an inventive step, one that is non-obvious to a person skilled in the field
And it must be capable of industrial application
Patents protect your inventions for 20 years during which you enjoy a monopoly in the market place. However patent protection is country specific. So you enjoy the monopoly within the geographic boundary that your patent has been granted in. As a patent owner, you can do the following:
You have the right to prevent others from using it, abandon it, sell it.
You may also assign it or license it in totality or for a specific purpose.
So, how does one choose what kind of protection to use for an invention?
There are three vital things to do when you think of protecting something as a trade secret:
Define your trade secrets and maintain an inventory of the trade secrets of your organization.
Make your employees aware of the fact that these are trade secrets. Ensure confidentiality and non-disclosure agreements are in place.
Do not make any information about your trade secret publicly available.
Here are some questions that will help you choose the right type of IP protection: “Patents Vs Trade Secrets”.
How easy is it to reverse engineer your invention?
The thumb rule of trade secret protection is to use it when inventions are impossible or require a very hard degree of effort to be reverse-engineered. By its very nature, a trade secret is vulnerable to reverse engineering because it only remains secret until it’s a secret! So, patent protection for inventions that can be easily reverse-engineered is more appropriate. How easy reverse engineering is; depends on the nature of your invention.
Products that are a result of this kind of innovation are fairly easy to reverse engineer. With anything that is easy to reverse engineer, trade secret protection becomes completely ineffective.
Chemical Compositions, Software & Electronic Inventions
While these are not as easy as mechanical inventions, with a little time and effort these products can also be reverse-engineered. Read this to understand how!
These are quite difficult to reverse engineer. Since processes are business-specific, they are easier to keep within the company. There is a long list of food products that have managed to keep their recipes or chemical formulae as trade secrets for many years e.g. Coca-Cola, Listerine, Twinkies, Krispy Kreme Donuts, WD-40, etc. Google Search Algorithm and NewYork Times criteria for creating the best Sellers list are two processes that serve as great examples for trade secrets.
How beneficial is it to your company to keep your invention a secret?
In a cut-throat market place, competition is everything. A major aspect to consider if keeping your invention a trade secret gives you a clear competitive advantage. There are six factors of competitive advantage: price, quality, selection, speed, turnaround and service. Does your trade secret serve or help further any of these purposes?
Who are your likely competitors and how motivated will they be to access your invention?
To choose the right kind of IP protection, it is important to understand your competition. The motivation of your competition to access your invention will be directly proportionate to your market position. So, having a clear understanding of your market, your product and the path of your company will help with answering this question.
Will the invention be useful after 20 years?
One of the reasons you choose trade secret protection over patent protection is to extend the lifetime of protection that it offers. While patents offer you protection or a monopoly of 20 years; trade secrets can last you a lifetime. Although trade secrets are less of a strain on the pocket procedurally, keeping them a secret always comes at a cost. Being able to gauge the usefulness of your invention after 20 years is a great tool to decide how you would like to protect it.
A business usually wants to patent an invention to have a competitive edge, market power, and as a tool to earn more money. Hence the first question to ask is whether there is a market for the invention, the technology, or products incorporating it?
Need in the Market
If there is a market for your invention, what are the available alternatives to it, and how do they compare with your invention? Check multiple factors such as utility, price, availability, customer satisfaction etc.
Utility of Invention
Once you have data on the market space, ask if the invention is useful for improving an existing product or developing a new product? If so, does it fit in with your company’s business strategy?
Another big reason for choosing to patent is using it as a tool to raise funds and attract potential investors. Before you choose to spend resources on a patent, check if there are potential licensees or investors who will be willing to take the invention to market?
New Revenue Stream
If you are looking to patent to sell your invention or as a tool to add a new revenue stream by licensing your patent, ask how valuable will the invention be to your business and to competitors? Also, just how easy is it to reverse engineer your invention from your product or to “invent around” it? Is reverse engineering easy enough to tempt others, especially competitors, to invent and patent what you have invented?
Sales & Profit
Purely as a tool to increase sales, profits, and revenue, do the expected profits from an exclusive position in the market justify the costs of patenting?
Lastly, what aspects of the invention can be protected by one or more patents, how broad can this coverage be and will this provide commercially useful protection?
If you don’t want to walk down either the Trade Secret or the Patent route, you may consider a Defensive Publication. By making a defensive publication, your invention is neither a trade secret, nor patentable (if not done so within the time frame offered under certain jurisdictions). A defensive publication may be ideal for smaller inventions or inventions which do not serve your company greatly, financially.
What a defensive publication does is safeguards your right to continue doing what you are doing or at the very least opening yourself out to challenge patents. When you make a defensive publication, you essentially disallow someone else from filing a patent. Or giving you the arsenal you need to hold a patent invalid because you published first. With a defensive publication (made in the USA), you are given a one year grace period to file a patent based on such publication.
A Quick Recap | Patents Vs Trade Secrets
To summarise, here is a tabular comparison of “Patents Vs Trade Secrets”.
Not a factor that needs to be worried about since you make public disclosure with a patent, and are granted full rights.
The easier it is to reverse engineer your invention, the riskier it is to protect it as a trade secret.
Expensive mechanism of protection. Involves attorney fee for drafting and filing and official fee for obtaining a patent.
In theory, a trade secret is free. Practically, keeping it a well-guarded secret may cost your company a certain sum of money.
Life of the invention
If your invention can stand the test of time and still be relevant after twenty years, this is not the right protection.
The benefits of keeping a trade secret are directly proportionate to the life of your invention.
Funding and Marketing
Better option to obtain funding as ideas become easier to explain to investors because of public disclosure.
Difficulty in explaining the invention to an investor for fear of divulging a secret may prove to be a hurdle for funding.
First Mover Advantage
You lose out on the advantage of being an initial significant occupant as disclosure through a patent application can help competition enter the same market space slightly quicker than otherwise.
With choosing to protect your invention as a trade secret, you can extend this advantage to a slightly longer time as your competition will have no information on your invention in the public domain before its market entry.
Choose wisely when deciding how you want to protect your ideas/inventions. Trade secrets are a great way forward and help you save your resources. Use these resources in patenting your best inventions. They don’t always have to cost a fortune. Here’s a guide to cost-effective patenting.
Like all things, life and business, IP protection is also all about balance. Trade secrets and patents can sometimes be used in a manner that is more complimentary than the contrary. IP strategy is personal to a Company and its journey. Hopefully, this shall make you choice easier: Patents Vs Trade Secrets.
Now, where is the scope of failure in creating IP wealth for the company?
1. Patent creation was not thought of from different angles like feasibility, demand, investment, etc.
2. Collaborators from the various segments did not participate in the journey from idea to patent.
3. Redundancy in the novelty of a patent gets caught at a later stage.
All this happens due to the absence of the right tool/software that can assure strategic collaboration and tracking.
So, as a patent portfolio manager of your company, an innovation tracking software tailored to your needs shall be an asset.
A tool that addresses each stage of the journey of an idea to patent as shown below:
Here are the 5 factors you should consider while you evaluate an idea management tool:
1. Is the tool easy to use?
2. Is the tool engaging to attract collaborators?
3. Does the tool provide real-time updates?
4. Does the tool manage the process throughout the life-cycle (Idea to Patent)?
5. Does the software keep evolving and getting more sophisticated?
Is the Idea Management Tool Easy to Use?
There is a good possibility that you might have used one of the following ways to manage ideas at your company:
2. CRM Software
3. Home grown tools comprising forms and tabular data
4. Collaboration tools
5. Expensive Docketing Software
The biggest shortcoming of these solutions is the complexity to use.
Nobody likes to fill long forms. Don’t you agree?
As the number of ideas, collaborators increase, tracking the updates on ideas/innovations becomes tricky and painful.The above mentioned methods are just makeshift arrangements, and not specifically designed keeping user experience in mind.
These tools lack intuitiveness and broad adoption across the enterprise. A user does not feel motivated to use the tool unless really needed. It’s the same as using a handkerchief in place of a specifically designed mask.
A handkerchief is just a make-do arrangement, however, a mask is designed keeping in mind filtration, breath-ability, comfort, ergonomics, etc.
On the contrary, if the tool is easy and simple to use, the collaborators will be encouraged to use the tool. Thus, speeding the process and achieving better results.
Is the Idea Management Tool You are exploring Engaging?
No innovation program is going to be successful unless you make it engaging. If the tool is not engaging, a user won’t be excited or motivated enough to share his/her ideas.
Encouragement to share the ideas is the very basis of such a program. It’s pretty much the same as sharing posts on social media like Facebook or Linkedin.
Engagement on posts through reactions, comments, impressions, views encourage the users to share even more. Not just more sharing, in fact, it gives users an idea of what type of posts score better in terms of response.
Below are just 10 ways out of many that make an idea & innovations management tool engaging:
1. Minimizing the friction to share ideas/feedback/updates or anything related to the tool.
2. A notification of idea submission to the collaborators for review.
3. A notification of feedback reception to innovator/inventor.
4. Patent Analytics driven Artificial Intelligence (AI) based review/rating on an idea from the tool.
5. Redundancy indication from IP Counsel.
6. Inputs on making the claims stronger for a Patent from IP Counsel.
7. Update on an innovation from business angle to all the collaborators.
8. Budget sanction notification for a successful innovation to be patented.
9. Patent draft available for review notification for all the stakeholders.
10. Inviting ideas to solve certain business challenges through innovation.
Does the Tool share Real-Time Updates?
A lot of stuff out there is very static. For example, if you wish to know the status of the company’s IP, you shall place a request for IP report generation to your patent attorney. The report shall most probably be in a form of a table/spreadsheet. Such a report makes it cumbersome to draw valuable insights on the IP front.
Another major problem with such a report is that it very quickly gets out of date. Hence what’s needed is a provision to track what’s happening with your innovations in real-time.
Here is how real-time updates are really beneficial:
1) People get busy developing the product, they forget about what’s happening with their innovation.
2) A system that monitors what’s going on shall help in making sure things are adhering to the process.
3) Timely updates help is avoiding last moment rush:
Realizing that you haven’t filed a patent yet and you are closer to the product release.
And then you are scrambling through to find out what’s happening and reaching out to IP counsel to get an update.
4) A one-shot way to update all the stakeholders allows for the transparency of the IP management.
Does the tool Manage the Process throughout the Lifecycle (Idea to Patent)?
Does the tool manage the process throughout the life-cycle(i.e. from Idea to Patent)?
The most common and important question that arises in this whole process is: do we file a patent or not?
Earlier the decision about patenting takes place the better it is, as it results in saving time, money, and effort.
Right provisions like below in the idea management tool can help in taking this important decision in the early stages or at least before regretting the investment made in patenting:
1) Visibility into a knowledge repository of ideas helps to avoid redundancy. There is a possibility that a similar idea got patented earlier. Even before the inventor of innovation in question got hired.
2) Vetting by Subject Matter Experts early on helps in shaping the idea and decide which ones to be pursued
3) Ability to view the patent draft as well as final patent application on the same platform.
Does the Innovation Management Tool keep Evolving and Getting more Sophisticated?
A pleasant surprise always makes you feel happy. Isn’t it? And only happy users can ensure the success of such a tool.
Innovations do not happen on a daily basis. But, whenever a user comes to the tool, new pleasing features shall engage him better. So such an innovation tracking tool needs to continuously evolve and keep getting more sophisticated.
Here are a few ways to achieve sophistication in an idea and innovation management software:
1) Improved Analytics
2) Enhanced Idea Nurturing
3) Dashboard driven by Great User Experience
4) Customization based on organizational needs
“With the right tools and a great team create strategic IP wealth and not dead investments.”
For a company, that files 40-60 patents per year, a tool that is specifically designed for idea capturing and vetting is sheer bliss.
It is important to make the best use of budget allocated towards creating IP.
We hope that this article could give you pointers to make the right choice for an idea management software.
TIP Tool is one such tool that is getting developed along the lines mentioned above. It currently provides ideas capturing and vetting.
Type of Intellectual Property (IP) protection needed for an invention depends on the nature of invention. Each of 4 main types of IPR – Patents, Trade Secrets, Copyrights & Trademarks has their own use cases. Patents are best suited for inventions that revolve around a product – process of manufacturing, its layout or appearance etc. If you wish to protect a recipe or a formula, keeping it as a trade secret shall be the best choice. Copyrights protection is well suited for artistic works like music. Trademarks are the best way to protect the visuals that represent a brand.
Each type of IPR protection costs different, this post shares great insights on costs related to each type of IP protection.
To Patent or Not To Patent: Inventor’s Choice
In August 2010, two MIT alums filed a patent for an application that helps multiple clients share and access files over a network. There are high chances that you’ve used this file-sharing app. You must have used “Dropbox”, Haven’t you? Today, it has more than 14 million users and is a billion-dollar enterprise.
Not every founder, inventor or developer is as generous as Linus Torvalds, who gave his masterpiece (LINUX) to the world for free?
If the founders (Drew Houston & Arash Ferdowsi) of Dropbox Inc. hadn’t protected their asset by patent, Dropbox might have even had 10 times its user base today, but they wouldn’t benefit from it. This is why individuals and organizations should safeguard their intellectual property.
Most organizations are wary about the costs involved in protecting their intellectual assets.There is an assumption that it costs a bomb to get it secured. While there is no easy answer on how much it costs to safeguard your intellectual property, the safest answer is – “it depends on a lot of factors”. In this article, we will help you traverse the difficult terrain of intellectual property and your IP related costs.
What Is Intellectual Property?
The intangible creations of the human mind are called intellectual property. It refers to inventions such as literary work, artistic work, designs, symbols, names, product recipes, images, and so on. To ensure that others do not steal your intellectual property, you need to secure them.
There are four different types of intellectual property (IP) rights.
An American conglomerate filed a lawsuit against a Chinese company for using a brand name that was eerily similar to theirs. Even though the courts found that there were dissimilarities in products, since the latter was able to acquire clients and capture significant market share using the brand name, they had to pay up the American company.
What Is A Trademark?
It protects brands. Under the law, a trademark is anything by which customers recognize a brand or the source of a product. A trademark offers legal protection for logo, design, symbol, phrase, wordmarks, or a combination of those that represents a source of goods or services.
Costs For Securing Trademark Rights in USA:
According to USPTO, the initial application fee for electronic filing for a trademark is $225 per class of goods/services. There are 45 classes of goods and services.
Your attorney will file a trademark application for you and the charges for it will be anywhere between $300 and $1000.
Once the application is filed, it will be examined by a Trademark Examiner.
If the examiner issues an Office Action refusing the application, then the attorney’s fees to respond to that would be between $200 and $2000.
The application needs to be filed based on having used the mark already for sales or with an intent to do so in the future. A Statement of Use is filed if nothing has been sold using the mark. The government’s fee to file it is $100 for each class of goods. Attorney fees to prepare it is between $250 and $700.
After your application has matured to registration, you must fill the required maintenance documents. Between the 5th and 6th year of registration, Section 8 declaration has to be filed.
i.) A Section 8 declaration is a signed statement saying that the trademark is in use in commerce and if not, then it should come with an excuse explaining the reasons.
ii.) Between the 9th and 10th year after registration, a combined declaration of use/non-use and application for renewal under Sections 8 and 9 should be filed together. The fee for combined filing is $425 per class of goods or services.
For a detailed account of the trademark fee, you can use this link here.
How Long Does The Trademark Protection Last?
While the terms of trademark registration can differ, the duration is usually ten years. Also, the USPTO requires that between the fifth and sixth year after the date of registration, the trademark owner should file an affidavit stating that the mark is still being used commercially. If the affidavit is not filed, the registration is cancelled. The USPTO will not send any reminders requesting you to send the affidavit.
Note: The trademark can be renewed indefinitely by paying additional fees.
One of the most famous patented inventions is the electric lightbulb. Another significant one is the telephone (Transmitter and Receiver for Electric-Telegraphs) which was patented by Alexander Graham Bell in 1876. Each of these made the patent owners significantly wealthy.
What Is A Patent?
Patents protect the innovative ideas of processes. There are two types of patents:
Utility patent – It protects a process, manufacture, composition of matter, and a useful machine. Example: Fully convertible high heel-to-flat shoe
Design patent – It protects the shape, appearance, pattern design, layout, and looks of a product. Example: Car or similar article by Warner Bros. (BatMobile)
Costs For Filing A Patent in USA:
For filing a patent, the costs vary not only based on the country, but also on the complexity of the invention. It could be $1000 if you plan to do most of the filing work or can be upwards of $40,000+ if your invention is complex.
The basic cost to file a patent application at the USPTO is $300. If you are an individual, and it is $75 and $150, if you are a small entity.
If you want a cheaper route, then you can do all of this by yourself, but you need to be meticulous in terms of recording everything about your invention. You might have to spend hours filing everything correctly.
Choosing Inventions For Patenting
While every innovation of your invention deserves a patent, it might not be feasible to patent everything as the prices are a bit steep. Not everyone has huge budgets so corporations may have to pick and choose on what to patent (according to the strategy that they might have). You need to evaluate your ideas before you decide. The company should take the call on which part of your invention to pursue for patenting. The most important part in this process is to keep a track of all ideas so that nothing is missed. You can use a simple spreadsheet but that tends to get corrupted with time along with having security issues. TriangleIP provides a free tool which helps you in maintaining and tracking your ideas. It provides you with 4 different workflow stages till the filing process – through which you can navigate and track your ideas.
Patent maintenance fee is paid to the USPTO to keep up a granted patent and is sometimes applicable for pending patent applications. Note: Design and Plant patents do not require maintenance fees. Maintenance fees are to be paid at the fourth, eighth and twelfth year anniversary from the time the patent is granted. To calculate the maintenance fees for your patents, you can use this link from the USPTO website.
How Long Does Patent Protection Last?
A utility patent is granted for 20 years from the date the patent application is filed. A design patent is protected for 14 years from the date the patent is granted. To enforce the protection of the patent, there are fees involved.
When they faced a lawsuit, Vanilla Ice confessed to sampling the work, and the case was settled out of court for an undeclared sum of money and crediting Bowie/Queen for the track.
What is Copyright?
It protects the original work of authorship. It helps the copyright owner to control reproduction, performance, adaptations, and distribution of the work. Examples of such works are- literature, drawings, paintings, songs, music, computer software, films, photos, web content, etc.
Copyright is generally attached to the work when the original work is available in a fixed medium. It means that the work has been written down on a piece of paper, saved in a storage device, or in some tangible format.
Costs for copyright protection in USA:
Filing a copyright application involves a lot of forms and each of them has different fees. Here is a breakdown of the costs involved to copyright your work.
For all the other filings, it will put you back by $65.
There are special fees for registering an application claim in a group or obtaining additional certificates of registration.
The USPTO does special services that have a different fee format too.
How Long Does A Copyright Last?
The terms of a copyright for a work depends on a variety of factors, including whether it has been published and if yes, then the date of publication.
Copyright protection lasts for the author’s entire life plus an additional 70 years, for works created after January 1, 1978.
For anonymous works, or a work made for hire or a pseudonymous work, the copyright is for a period of 95 years from the year of its first publication or 120 years, whichever expires first.
For works published after 1923, but before 1978 are protected for 95 years from the date of its publication.
If the work was created but not published before 1978, then the copyright lasts for the life of the author plus 70 years.
For works that are created after January 1, 1978, the copyright is not subject to renewal registration.
In 1953, inventors at Rocket Chemical company came up with a formula at the 40th attempt and called it WD-40 – “Water Displacement, 40th Formula”. The company never patented it because trade secret seemed like a better protection and wisely so. And the company managed to keep it a secret for 50+ years. By the fiscal year 2017, gross revenue for the company, including sales of the familiar WD-40 Multi-Use as well as other products, totaled $381 million in annual revenue. It was only in 2009, that “Wired” with advanced processes like gas chromatography and mass spectroscopy managed to find out what’s inside WD-40.
What is a Trade Secret?
A trade secret is any valuable information that is not publicly known and of which the owner has taken reasonable steps to maintain secrecy. It could be ingredients used in their dishes, business methods, customer data, ideas related to your business, marketing strategy, experimental technology, etc.
Costs To Guard Trade Secrets in USA:
Since you don’t have to register with a government body for qualifying your product/business as a trade secret, there are no costs associated with it. Guarding the secret requires security measures, and these might accrue some costs.
As trade secrets costs feel nominal compared to patenting expenses, you might get tempted to opt for trade secrets. This may or may not be a good idea. Thomas Franklin, the founder of Triangle IP has shared great insights in the following video to choose between patents and trade secrets.
How Long Does Trade Secret Protection Last?
Indefinite protection to the trade secret as long as the secret is commercially viable. It will continue as long as the secret is not available to the public. Also, unlike patents or copyrights, trade secrets are protected without registration.
How To Protect Your Intellectual Property?
We have discussed the major four types of intellectual property and how they can safeguard your business from infringers. It is the onus of the business to protect its assets. Losing one of your assets can result in significant damages to your business. Getting the right advice from professionals will make it easy for you to protect the interests of your business.
For starters, you could write down a list of ideas, discuss them with your lawyer and decide which are the ones that are worth going after. TriangleIP helps companies with a free tool using which ideas can be managed till the filing process.
In summary, below is the list of the 4 forms of intellectual property related costs discussed in this article:
Life (in yrs)
Prosecution & filing costs
Infringement/Damage of reputation by another company
10 (can be renewed indefinitely)
$225-$400 per class of goods/services depending on the type of application
$425 per class of goods/services
It protects the commercial use of the invention without the consent of the patent owner
$75-$300 based on the size of your company
$1,600 for large entity | $800 for small businesses | $400 for micro businesses
It protects the original work of an author
Starts at $45 for e-filing
No maintenance fees
It protects information that is crucial to a business, using which the entity has a strong competitive advantage
Lasts as long as the trade secret is viable commercially
There is no need to register with a government body to guard your trade secret
No maintenance fees
A report from the Commission on the Theft of American Intellectual Property pegs the loss from IP theft between $225 billion and $600 billion annually. If you fail to protect your intellectual property because of the costs involved, you might end up losing a major chunk of revenue as competitors might copy it. You will lose your competitive advantage too when others claim to provide the same features that you do.
It is normal to feel overwhelmed with the rigmarole of the lengthy procedures involved in filing applications for each intellectual property, which is exactly why you should delegate it to the experts, depending on the situation.
“Remember co-founders are also employees who are privy to confidential information. A leaving co-founder may pose a significant threat to your IP. We bring to you five ways to protect your IP when your co-founder leaves.”
The team that starts a company is often not the one that stays on till the end of it.
A co-founder who is leaving the company may pose a significant risk to the company. He/She may claim the company’s intellectual property rights as his/her own.
A leaving co-founder can start their own rival entity and may end up using the company’s intellectual property.
Typically, when co-founders start a company, they brainstorm, develop an IP, and then start with the business.
This makes the co-founders privy to all kinds of proprietary information. They have seen the growth of the IP from a nascent stage. And they may think that they have a right to use it, independent of their association with the company, as well.
So, what to do when a co-founder leaves? How to protect the company’s IP against a leaving co-founder?
We highlight below five ways by which you can protect your company’s IP. And contractually bind the co-founder to not use or treat the company’s IP as his own:
Assign IP to the company rather than co-founders/Invention Agreement
Intellectual Property enhances the valuation of companies. Hence, its protection becomes important. IP Rights need to be assigned to the company rather than the founders. In the event, the founders decide to walk away from the company, it is important that the IP rights still remain with the company.
Such an agreement mandates that all the intellectual property developed, conceived, formulated, and generated by a company would be the sole property of the company.
While drafting this agreement, care should be taken that the intellectual property rights of the co-founders are assigned to the company and that they do not remain the property of an individual. It is not uncommon for companies to obtain trademarks, patents, and domain names in the name of one or more of the co-founders initially.
Later on, these should be transferred in the name of the company. Any patents which are filed should be filed in the name of the company and not the co-founders.
A co-founder is not only associated with a company in the capacity of a co-founder but also as an employee. He/she may develop intellectual property during their employment with the company.
Rights in such intellectual property should also be vested in the company.
The co-founder’s employment agreement which would be separate from the inventions agreement should contain such a clause.
A Non-Disclosure Agreement should be mandatorily signed with the co-founder. Such an agreement would prevent the co-founder from disclosing the trade secrets of the company.
For example, if you have a restaurant business and there is a unique recipe that has the capability of attracting more customers to your restaurant; the recipe is your restaurant’s trade secret.
If your co-founder leaves and opens a competing business and uses this recipe, your restaurant would lose its edge. A non-disclosure agreement would contractually prohibit him from engaging in such an act.
Business ideas form the very base of successful functioning and continuance. Hence, it is prudent to bind all current and even former partners by the clause of confidentiality.
Confidentiality should protect the business ideas, trade secrets, any operations/procedures which have been adopted to give finality to these ideas and finally the end-product itself.
A confidentiality clause can be built in the employment agreement of each co-founder, in the Founders’ Agreement, and in the NDA which the co-founder signs.
Remember to make the confidentiality clause applicable even post the termination of the aforesaid agreements.
Typically, a confidential clause should survive 6-12 months after the agreements have ended.
A non-compete clause prohibits the co-founders to engage in competing business for a reasonable period of time after they leave the company.
It is essential to have a non-compete clause in the Founders’ Agreement and the employment agreement of the co-founder.
One hurdle that one may face with regard to non-compete clauses is its enforceability.
The enforceability of non-compete clauses varies across states.
In California, such clauses are void and unenforceable.
In other states such as North Dakota and Oklahoma, the use of non-compete provisions outside the sale of a business is limited. Other states such as Illinois prohibit the use of non-compete with regards to low wage workers.
Hence, having a non-compete clause can be one of the ways in which you can prevent your co-founder from stealing your confidential information and use it for the benefit of a rival/competing entity.
However, it may not be fool-proof and hence should be coupled with other protections such as assigning of IP to the company, NDA, confidentiality obligations, etc.
Our co-founder recently talked about this in a detailed video. You can watch the video below:
To conclude, while it is understandable that a co-founder leaving a start-up that they helped build may be a devastating blow for the management, it does not necessarily have to be a fatal one.
By doing small exercises to protect the larger interests of the company over the individual interests of the founders, the company can have a strong foundation on which it can be built.
If organizations take steps like including IP ownership by the company, along with NDA and non-compete clauses as part of a founders’ agreement, then any future fallout resulting in the founders splitting ways, will not tear the company apart.
These steps will provide stability to the company and protect its IP.
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