How To Seek Investment Using Patents?

Seeking Investment using Patents Triangle IP

Seeking investment using patents? Is a patent enough?

Seeking Investment Using Patent, Look for Strategic Partner

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 Strategic Partner

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.

Seeking Investment Using Patents | Look for Strategic Partner

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

  1. List down the companies that manufacture products in the space you have the patent in.
  2. Study these companies to find out:
    1. Which of these would be interested in having the next new feature in their product?
    2. Which of these companies is looking to differentiate itself from the competitors?
    3. Is there any company that is in the tight position that hasn’t had a good technology in a while?
    4. Which of these companies is an established player that always wants to stay on the top?
    5. There also is a possibility to find a supplier to the company that manufactures these products and might be interested in your idea.
  3. 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.

IP Research Firm To Your Rescue

Curating the list of probable strategic partners shall require IP expertise. Best would be to hire an IP research firm

Here’s what IP firms shall do: 

  1. The IP research firm will try to understand your motivations behind creating the patent to familiarize themselves with your invention.
  2. 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.
  3. 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.

Seeking Investment Using Patents | Offer Exclusivity To Strategic Partner

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.

Conclusion:

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!

Want to know more about IP Strategy?

6 Ways to Strengthen Your Patent Portfolio

6 Ways to Strengthen Your Patent Portfolio

The other day I was speaking to a portfolio manager at a large enterprise.  He was given a task to enhance the patent portfolio for the company. My first question to him was about the process of capturing ideas from inventors.

Me: “How do you capture the ideas and collaborate over the ideas to transform them into valuable IP?”

He: “We conduct certain brainstorming sessions, capture ideas in excel sheets and pursue as and when we feel a need for the same.”

In my experience of working for over 20 years with so many enterprises, the scenario is pretty much the same. Most enterprises use excel sheets, emails, docketing softwares (that’s like giving a factory when all that’s needed is a simple machine), or some other make-do softwares to capture ideas.

You Might Wonder What’s Wrong With Using Such Tools?

Well, in the absence of easy capturing and thorough vetting, a lot of things may happen which hurt the value of a patent portfolio.

  • Great ideas get lost while traveling amongst various stakeholders.
  • Weak ideas get pursued for filing a patent resulting in either a rejected patent or a low-value patent.
  • Filed/Granted patents are sometimes great in terms of innovation but do not have a market demand as the business team did not collaborate while persuasion.
  • Effort gets wasted on an idea which the company has already filed a patent on in the past by some other inventor.
  • Sometimes inventors get so busy with the progress of the invention that the idea gets completely missed out of the patenting process. Even worse, the product reaches the market without IP protection. And, competitors take full advantage of it.

Hence what’s needed is a defined process to capture ideas. A way to collaborate over ideas to conduct thorough internal vetting. A place where all the stakeholders from different arenas of a business and research can contribute. Thus making sure that only the finest ideas are pursued for filing patents. 

Strengthen Your Patent Portfolio Proactively

Strengthen Your Patent Portfolio Proactively

Besides this, a strong culture of innovation at the workplace and a time-to-time audit of the portfolio shall also be beneficial towards a valuable patent portfolio.

Here are 6 quick pointers that can help you strengthen your patent portfolio:

1./Effective Innovation Capturing

2. Thorough Vetting

3. Curating An Innovation Driven Culture

4. Getting Patent Experts Onboard

5. Pruning To Strengthen Your Patent Portfolio

6. Expediting Patenting Process

#1 Effective Innovation Capturing

It all starts with an idea. So, the inventor comes up with an idea. Maybe he shares the idea with you, maybe he does not. Maybe you review or maybe it gets slipped as you were too busy. And the inventor gets busy working on that idea totally forgetting about the protection it might need. Whether patent or trade secret or defensive publication. 

Now the product that gets created based on the inventor’s idea is revolutionary. And it reaches the public domain without any IP protection. It’s under the threat of fast followers. Companies out there who have resources and capital are always on a look for products which they can easily copy and sell for a lower cost. These guys also save on money that you spend on R&D and engineering of the product. Thus, grabbing the market share that your company deserved actually.

And the worst part is you cannot do anything about it. 

This necessitates to have a defined place to capture innovations and track their progress throughout the lifecycle.

Another thing that acts as a friction for inventors to disclose inventions and add them in the patent pipeline is: “long, non-intuitive invention disclosure forms with jargons that only attorneys understand”. At TriangleIP, we understand this friction and thus we have kept the idea capture form very simple in the TIP tool.  

An Easy Idea Form For Inventors | Strengthen Your Patent Portfolio

#2 Thorough Vetting

If you have a bunch of ideas coming in from different inventors; it’s very much possible that you might not have a budget to pursue them all for IP protection. So in order to choose which ideas to pursue, the ideas need to get evaluated from different aspects. You might wish to keep some ideas as trade secrets or give some to public domain with patent protection. Hence what’s needed here is a thorough vetting of ideas.

Thorough Internal vetting of Ideas | Strengthen Your Patent Portfolio

Innovation happens quite early in a process. Typically before you have any customer or market validation. Hence all that can be done is speculation on which ideas will generate revenue a few years down the line. It takes around 3-5 years to get patent protection for an invention.

However, one thing that helps you mitigate the risk and choose the best of ideas is to have it vetted by people from different streams; business, legal, engineering, strategy, etc.

Listed below are some important factors to consider to zero down on the ideas for patenting:

  • Strategic vision of the enterprise.
    • Alignment with a product line to have market dominance. 
      • Say there is a company that deals in smart refrigerators. It would want to have patents around advanced functions of refrigerator like: Ordering groceries based on the supplements about to finish in the refrigerator.
    • Market expansion across geographies.
    • Just for defensive purposes against probable lawsuits.
  • Relevance of technology to be patented in long term. Technologies go out of date as industries evolve. 
    • Example: Mobile phones have almost out-dated the landline phones in the last few years.  
  • Budget allocated towards IP.

#3 Curating An Innovation-Driven Work Culture.

“When failure is not an option, we can forget about creativity, learning and innovation. – Brene Brown”

Embracing failure is the key to have an innovation driven culture. Because the studies suggest that a significant percentage of innovations fail. The companies must have enough risk appetite (financially) to handle the failures. (Because somewhere there are chances of blockbuster success too).

And that’s not all, there are many other factors that can encourage or kill innovation culture at an enterprise.

The other day I was reading a book called “The Invincible Company” and in that, I came across a beautiful concept called “The Culture Map”. The culture map talked about the Enablers and Blockers of innovation at a company. It resonated really well with me. 

Innovation Culture Blockers:

  1. Lack of Innovation Strategy.
  2. General Fear of Failure.
  3. Bureaucracy slowing down innovation.
  4. Locked into Current Business Model.
  5. Lack of skills, knowledge and experience.

Innovation Culture Blockers | Strengthen Your Patent Portfolio

Innovation Culture Enablers

  1. Strategic guidance.
  2. Resource allocation.
  3. Innovation Tools.
  4. Legitimacy and Power.
  5. Skills development.

Innovation Culture Enablers | Strengthen Your Patent Portfolio

It would be beneficial to take a quick look inside your organization for these enablers and blockers. This shall further be helpful in creating an environment where innovation shall flourish for the organizational good.

#4 Getting Patent Experts Onboard:

Lack of expertise in drafting patents may result in rejection. Mentioned below are some of the top reasons for rejection of patent applications:

  • Improper and Insufficient description of the invention and how it works.
  • Lack of novelty.
  • Non-patentable subject matter; e.g. new use of a known substance.
  • Erroneous Writing: Issues with line numbers, reference numbers on drawings, or paragraph numbers.

If you don’t have in-house experts to write the patent, we suggest that you choose an IP firm that has the reputation and the experience to handle the end-to-end process. You need to have the right people on the job to draft the patent. Ensure that the one who is writing the patent has deep knowledge of the technology, has the right background, understands the fundamentals of a patent, and so on. 

#5 Pruning Patent Portfolio | Abandoning ‘Out-of-Date’ Patents

Let’s say you have a portfolio of many patents (50 or more), only a few of them would be worth a lot. The rest will guzzle your time, effort and money.

Maintenance fee alone can become a significant expense if there are many patents in a portfolio and for quite a long time. The snapshot below  shows the maintenance fee to be paid for patents at different time intervals.

Maintenance Fee USPTO| Patent Pruning | Strengthen Your Patent Portfolio | Abandoning Out-of-date Patents

The ability to know when to stop investing in bad IP assets is important to have a strong patent portfolio.

If you look carefully in your portfolio, you will find that there are patents that are areas in orphaned technology or where there is no commercial interest. Free up the budget allocated for it to work on an innovation that is more promising. A technology that was once highly used does not mean it is going to be relevant forever. Some of the patents might have run their utility. 

Let’s take a look at how IBM has pruned it’s patent portfolio over the last 2 decades. IBM has abandoned thousands of patents across T0, T1 and T2. This probably saved them millions of dollars and strengthened the patent portfolio.

IBM US Abandoned Patents by Pruning 1999-2020 | Strengthen Your Patent Portfolio

There can be many reasons for abandoning the patents:

We, at Triangle IP, are on the way to bring analytics to the TIP tool  that shall help the users identify hopelessly expensive cases.

  • Out-of-date technology as the industry evolved over the years.
  • Change in patent laws in different geographies.
  • No market presence, say you got patents in the UK but the business related to those patents never really took off in the UK. So, maintaining those patents does not make sense.

#6 Expediting the patenting process to be at the right time in the market.

There was a time when it took more than three to five years to get your patent up and running. Thankfully, that’s not the case anymore as you can easily get an expedited patent for a few thousand dollars in the US. While it might sound like a big number for a new startup, if it means that you can build your portfolio quicker, then it is wise to get that leverage for yourself. 

You can also watch this video by our co-founder where he explain portfolio management in a greater detail:

To Sum It Up:

Here is a quick recap of the pointers that shall help you progress towards a strong patent portfolio.

1..A well-defined business process to capture ideas and progress them to valuable IP (Intellectual Property). 

2. The process must provide for thorough vetting from strategy, market, legal, feasibility, financial aspects.

3. Curating an innovation culture by removing the blockers and supporting the enablers shall help your people to come up with more valuable inventions.

4. Ensure that your patent applications do not fall in the rejection bucket by hiring experts to write your patent applications.

5. Time-to-time pruning of the patent portfolio i.e. abandoning the patents (due for renewal) can help you strengthen the patent portfolio.

6. Expediting the patenting process for a few thousand dollars shall be a good tradeoff to be at the right place at the right time.

Is My IP Strategy Headed in the Right Direction?

Triangle IP - Is my IP strategy headed in right direction?

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. 

On that note, from us to you – Happy Patenting!

5 Strategies To Reduce Patent Expenditure

5-Strategies-to-Reduce-Patent-Expenditure

“Reduce Patent Expenditure”: Have we read your mind?

The on-going pandemic has drastically affected the availability of resources for discretionary expenses such as patents. It is of no surprise that many companies are proactively looking to conserve cash by pruning their patent portfolio.

So, what are some of the strategies that companies can opt to reduce their patent expenditure?

The following points aim to highlight the plausible ways:

Trade Secret

Patents are intangible assets, and so are trade secrets that enjoy legal protection from misappropriation.

The caveat here is that if a trade secret holder fails to maintain secrecy or:

  • if the information is independently discovered,
  • becomes released, or
  • becomes known in the general course of business,

then the protection of a trade secret is lost.

Nevertheless, here is how the Courts can enforce trade secrets in misappropriation cases:

1. By ordering maintenance of secrecy.

2. Payment of royalty to the owner.

Watch Webinar: How to manage your prosecution in the Covid environment?

Webinar: 5 Strategies To Reduce Patent Expenditure In The COVID World

Defensive Publication

Patents are expensive, defensive publication is a good alternative. You can curtail or defer expenses relating to patents by using the defensive publication to your advantage.

The defensive publication refers to the publishing of a technical disclosure of your idea in the public domain. This disclosure prevents competitors from obtaining a patent.

The reason behind the popularity of defensive publication is its cost-effective nature over patents.

Provisional Patents

Unlike a utility patent, a provisional patent is not reviewed by the USPTO.

A provisional patent acts as a reservation for the invention until an investor is willing to file a utility patent. However, the follow-up utility patent application needs to be filed within a year.

Thus, filing a provisional patent allows a company to defer patent expenses for a period of less than a year. In this period you can continue to conduct more research into the market viability of the patent. You can also use this time to refine the patent product/process itself. 

Also Read: Everything You Should Know About USPTO Patent Center

Curtail Overseas Spends

Patents are an expensive proposition, more so in foreign countries where patent applications stretch out over a year or sometimes more.

Furthermore, the patent protection regime in such countries may not be conducive to patent filing as enforceability is often lax.

Therefore, companies should reconsider their non-strategic patent spends and weed out jurisdictions after undertaking a cost-benefit analysis of obtaining a patent in that particular country.

Continuations

A continuation patent application is an extension of the existing patent application. The continuation patent application increases the scope of patent protection from multiple perspectives.

However, continuations are expensive to file. Since they are “designed” around an existing patent, it only serves to enhance coverage of an existing patent.

To conserve cash, companies can either forego filing continuations or defer them.

Other Strategies

Here are a few more high-level strategies that will ensure the optimization of patent spends for companies:

Ask Questions

Companies or clients should regularly question their patent attorney to gauge the timeframe as to:

  • when a patent will be issued,
  • what are the chances of getting a patent,
  • how best to curtail patent spend, etc.

By asking questions at every step along the patent application process, the viability of a patent can be determined. Whether it makes monetary sense to pursue the issuance of a patent or abandon it altogether.

Align Corporate Strategy

Often, patents are pursued with the sole intention of ensuring the protection of an invention rather than a monetizable invention.

Hence, in the prevailing scenario of depleting cash reserves, it is prudent to pursue patent applications of those inventions which:

  • align with the overall corporate strategy
  • or are expected to provide for economic benefits.

License to Litigate

Patents are a means to litigate. They provide for the legal protection of your inventions. In cases of infringement, the Court can award damages, court costs, and reasonable attorneys’ fees. Hence, it is a wise notion to pursue a strategy only for patents that are litigate-able.

Let’s Sum It Up

The COVID pandemic has thrown corporate strategies as well as financial forecasts for a toss. It is the all-hands-on-deck mode to conserve cash. It is widely acknowledged that patents, albeit extremely critical to the success of a company, incur exponential costs.

Companies can rationalize their patent expenditure over the short-term and medium-term by aligning it with the overall business objectives. Companies can also opt for ways to postpone filing a patent application.

Hope the insights presented in the post shall help you reduce patent expenditure.

Ultimate Patent Strategy for your Software Startup (Comprehensive Guide)

Patent strategy for your software startup

As any tech company has learned over the years, securing new patents can be a very frustrating, challenging process and it’s not getting any easier.

Why You Need a Patent Strategy?

So, for start-ups entering a market for the first time with a brand-new invention, the balance between securing early protection and preparing a viable application with a good chance of approval is critical.

The fact is, software, in particular, has had so many runs at the U.S. patent office, they are not impressed by the next big thing and often turn down packages as duplicates, ill-prepared, or the easy kill – insufficient information on which to base a patent approval.

The second problem inherent in the system is that existing software patents are written like a giant barn door, capturing far more in licensing power than many should have, also blocking otherwise subsequent good packages from seeing the light of day.

The results of these two factors have created a modern patent process that rewards undeserving winners and makes it almost impossible for most startups to see their way through the process without solid investor backing from big players and heavy patenting expertise.

Also Read: Answers To 25 Most Searched Patent Related Questions

Basis of the Patent Strategy of your software startup

Many will argue the first and best step is to secure solid legal representation and let the lawyers handle everything.

However, this is incorrect.

In reality, the cornerstone and foundation of a good patent has always been the innovative nature of the invention to be protected.

Pure and simple, the invention must carry the day in how unique and different it is from anything already protected.

This provides the basis for what in essence becomes a legal monopoly no one can break for decades without severe risk.

So, the invention has to be a standout and unique.

The invention must also have staying power. What solution does it provide?

People don’t buy a tool because it’s a tool; they buy the tool because it provides a functional solution to a problem.

In other words, the invention needs to be the kind of idea that is going to be around for a decade or so at least. If the viable window for your invention is only a few months or a year, save your money and legal resources and instead maximize what you can from sales and the market before the fad wears off.

It’s a better use of your time and keeps more earned cash in your company wallet. Then move onto your next market idea.

Investing Patent Efforts on Software as well as the Hardware front

Technically, anything invented that is unique and different from anything already existed in that same purpose and function can be patented, but is it worth the trouble?

In many cases, the answer is no. Patenting simply for the sake of patenting is foolish.

It’s a waste of money, effort, time and resources to make happen, especially if the patent is not going to be used economically or protects a critical component in an assembly that will go to market.

Choose the protection of your inventions wisely and realistically in terms of what is truly going to go to the market and be a reliable revenue-maker.

If the patent is just an attempt to gain a reputation by showing ownership of multiple patents, you can do a lot better for a lot less with other titles such as certifications or industry awards instead.

Your protection of intellectual property needs to be strategic in nature.

As heavily detailed by Blake Harris in his book, The History of the Future, when Oculus created their virtual reality headset product, the patent protection they pursued was not on the hardware.

Most of the hardware parts were knock-off material from previous products and inventions re-purposed by Oculus to make the developer kits and the first masks.

Instead, Oculus put its patent effort in the software and hardware combination that made their version of virtual reality work so darn well and different from anything before. That was the invention that gave Oculus their strategic advantage, and what needed legal protection.

This was proven later in a subsequent patent trial Oculus’ team partially won holding onto the same patent rights.

Importance of Filing Patents on Different Parts of an Invention

Even if you get an invention patent, is your product going to be worth fighting for? There are lots of companies with far more money, power, and lawyers than your startup who can burn you dry filing counter motions and delaying tactics in court to drain your bank account. This is a well-known and well-used tactic.

If you go bankrupt before your protection is awarded, what’s the point of having the patent in the first place?

While your startup may not have an unending bankroll available to litigate, like that of maybe Oracle or Google, you can layer your invention with more than one patent.

Strategically filing patents on different parts of your invention can create a far more complex fight before it starts. It’s far more complex and requires that the separate parts have a distinct difference, but successful multiple patents produce stronger ownership of the invention as a whole.

Then you have the choice of defending on multiple fronts, making it harder for the bigger player to run away with one part and be successful.

Apple, for example, was approved 44 patents on just one new iPhone design in 2018. Additionally, you could sell one of the patents to another player, and use the sale funds to pay for your defense as well.

If it’s a good invention showing significant promise, others will want to invest, and that can offset the financial strength of the attacker in litigation.

Detailed Roadmap of Patent Strategy

Many startups and new companies lose their focus trying to patent too early to leverage uniqueness. Instead, patent experts regularly advise the best approach is having a strategic timing plan of when the patent will be pursued along the path of the company development and launch. The most successful tech patents were pursued and secured just before the product based on their invention went to the market and at the edge of its revenue run.

That, in turn, protected every exponential dollar in sales as the product took off. Patent too early, and money will be wasted on what might turn out to be a mistake that never goes to market or fizzles. Patent too late, and someone else might churn out a viable substitute invention before your startup gets a footing.

Your roadmap should have a clear phase of the following:

·         Development of the invention

·         Finished prototype

·         Investment partnering

·         Pre-market preparation

·         Pre-market launch

·         Production

Where the ideal point for the patent is in your startup’s case depends on which phase your invention becomes viable and in demand as something new and a real solution to a customer’s problem. When that happens and goes public, the attention will go viral, and your risk of loss without a patent rises exponentially increases as well. Add in the fact that today’s international patent markets are growing very much in sync with each other, the protection can be extended across borders as well.

Combining Elements for an Edge as a part of Patent Strategy

A common question by many startups trying to differentiate themselves in the market tends to be with taking a niche approach. While they aren’t the first to the market to create one element, they may find a market creating a bridge between two or three existing elements.

These elements may even have patents themselves individually and already owned by someone else.

However, the bridge invention created may very well be eligible for a patent because no one else saw the possibility of the separate items coming together for a new purpose.

Remember though, a combination alone is not an automatic patent approval. The government approves patents because the invention is “new, useful and non-obvious,” not because of a combination of parts being present in general.

In Oculus’ example noted above, the virtual reality kit maker used common parts already patented by other manufacturers but the software was the unique bridge that made the parts come together in a better way. The software needed the parts, but the coding was the bridge invention itself that made the entire product viable as a better way to experience virtual reality.

How can Provisional Patent Option be helpful in your Patent Strategy?

Most people unfamiliar with the patent process simply assume that a patent is an all or nothing application. It gets submitted, reviewed and either approved or denied in total.

That’s not true.

There is what is known as a “provisional” patent application.

This option allows a filer to submit a “temporary” application that gives one year of protection versus a permanent patent for an invention.

However, unlike the full patent process, the provisional patent is cheap in comparison. And it’s a great tool for gaining some temporary protection for a unique invention that needs some sort of defense but a startup is not yet sure it will be a worthy investment or not.

Normally, a provisional patent filed with an attorney’s help will cost anywhere between $1,500-2,500. Before hiring a patent attorney, you must take these 6 things into consideration.

However, if a startup really wants to go as cheap as possible, the application can be self-written by the company itself and the government’s filing fee runs about $70-140.

And, in addition to the protection, the owner gets the benefit of being able to legally warn anyone that a patent is pending, which itself can scare off theft at a very low cost.

The full patent filing will need to be submitted a year later if full protection is going to be pursued, and the full filing needs to be based on the earlier provisional filing versus creating an entirely new package.

The filer can’t add greater features, detail, or scope to the provisional package with the subsequent full filing 12 months later, using the provisional filing as a “draft” run.

Why you should Patent under the name of your Startup?

Whichever patents your startup decides to create, make sure they are owned by the startup business entity right from the beginning. Too often startups have a smart team player, and the patent is titled in that person’s name versus the company.

This can become a big mistake if the person walks away from the startup when things really start taking off. While non-discretionary agreements (NDAs) can prevent an employee or partner from giving away intellectual property for a while, NDAs expire in a few years’ time.

And then the ownership of the patent in practical terms is gone. Startups that make it clear ideas and inventions created in the context of the business are owned by the startup right from the start do themselves big favors down the road and avoid an “achilles’ heel” weakness with key inventors as personnel.

What to do in case you have no budget for patents?

One of the areas that nobody can effectively create a patent has to do with the public domain. This is where an invention is known to everyone and is commonly available. As a result, nobody can claim the invention as their own unique and new idea. A startup that wants to make sure a prototype idea gets to fruition but doesn’t have the resources or the expectation the idea will get a patent of its own can use the public domain to make sure no one else can do the same.

The Linux operations system code is a great example of this approach. Unlike Microsoft Windows or Apple iOs software, Linux code was made publicly available from the start. Because the code has been constantly developed in the public domain, nobody can turn around and patent Linux today (although they have tried as in the case of Microsoft). Anyone can work on the code and improve it. This approach has kept Linux in the shared-development domain for decades, and the product has been extremely effective in how well it’s been improved as a result.

Linux today is the preferred operating system for many large-scale server systems, for example, far more so than Windows Server, and it is the coding basis for the Internet of Things (IoT) world as well. This alternative approach can be a great way to protect an invention from being lost by doing the opposite of the profit model and making the idea available for everyone to use.

Getting Different Government Help to Secure Early Protection at Lower Cost

It’s a smart idea to consider which market your invention is going to be sold in as a product before filing for protection.

For example, if your invention is geared for Europe and a foreign language jurisdiction, it doesn’t make a lot of sense to file immediately in the U.S. for patent protection. Your startup would be better served to seek protection in Germany or the U.K. instead.

We previously also wrote about 5 strategies that could help you develop Foreign Patent Portfolio.

In some cases, startups can be eligible for government help in offsetting the costs for their international patent filings.

The Canadian government, for example, provides guidance and financial support for small and medium businesses to file patents within its system.

One might ask, why go to Canada versus operate in the U.S., but remember that international coordination is now happening with greater and greater strength every day.

Filing a patent in Canada with government-funded assistance could be a way to put legal protection in place that the U.S. would honor, and it’s a lot cheaper than the cost of filing a full patent in the U.S. out-of-pocket.

Just like software coding, there’s more than one way to skin a cat when working to patent a software or prototype. Problems can be solved, gaps can be crossed with different directions and steps.

As a startup, you will have financial challenges and the traditional path toward success won’t seem practical. But you can break that mold by being smart with your startup’s patent strategy and playing your options that fit best for your particular intellectual property scenario.

Remember, you will likely have more than one patent, and there’s no rule that says you have to use the same approach to protect one invention versus how you protect the next.

Plan each one in itself and then combine your overall business model with what works best, firing on multiple channels instead of just one single path.

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