Many contestants on ABC’s hit-show Shark Tank answer “yes,” when asked if they have a patent, illustrating that startups may generally appreciate the importance of filing a patent application early to protect their innovations. However, there are a variety of options available when developing a company’s strategy for protecting its Intellectual Property (IP). Below are five often-overlooked considerations for companies, especially startups, when developing an IP strategy.
1. Patents are not the only IP asset that should be protected early
A key component of a startup’s IP strategy typically involves the early filing of at least one patent application; however, the early protection of other forms of IP may be beneficial for a startup to consider:
Trademarks: The early federal registration of a trademark at the United States Patent and Trademark Office can prevent future disagreements, and potentially expensive litigation, about first use and territorial rights.
Trade Secret: If a startup plans to protect certain information/technology as a trade secret, measures must immediately be taken to maintain the secret. Such measures include putting the proper procedures/policies in place within and outside of your company early enough that unwanted disclosure of the material is prevented. Once the material is no longer secret, trade secret protection is not possible.
2. You have a patent – now what?
Contrary to a common belief, the grant of a patent does not grant the right to the patent owner to practice the subject matter claimed in the patent. Rather, a patent grants the right to the patent owner to exclude others from making, selling, using, or importing the subject matter claimed in the patent. Further, the grant of a patent does not automatically equate to the formation of a successful business.
There are a variety of resources available to help inventors formulate a successful business plan. For example, business incubators and accelerators may provide resources (e.g., training, workspace, mentoring, connections, etc.) to a startup to help grow the business.
Incubators and accelerators are often focused on a specific industry, tied in with the local entrepreneurial community, and can provide key insights to help a startup overcome common, or uncommon, problems. In addition, there are many governmental/pseudo-governmental organizations (e.g., through the U.S. Department of Commerce) that are focused on helping startups/businesses achieve a specific goal.
3. Filing in as many jurisdictions as possible may not be the best approach
For a startup with unlimited resources, filing their IP worldwide may be an easy way to cover current and future activity; however, most startups have limited resources and must selectively limit their filings. A good rule of thumb is to file for protection, in order of importance, in:
Jurisdictions where the startup is operating,
Jurisdictions where the startup’s customers are located, and
Jurisdictions where the startup’s competitors are operating.
Along similar lines, startups oftentimes file Patent Cooperation Treaty (PCT) applications to gain provisional protection in the 153 contracting states of the Patent Cooperation Treaty (PCT Contracting States). The benefit of a PCT application is that it affords the startup time to make more informed decisions about where patent protection is desired before filing in individual jurisdictions.
4. Take advantage of available USPTO programs
A first action from the USPTO in response to a newly filed application may take 2 or more years to receive. Add on the time spent arguing with an Examiner, and the total time from filing to grant can exceed 3 years. For a startup that needs to show immediate results to push for more funding, such a delay can be harmful. Fortunately, the USPTO has a variety of programs/procedures that may be successfully used to speed up the patent grant process. One such program is the Track 1 Prioritized Examination program.
Track 1 Prioritized Examination – The goal of the Track 1 Prioritized Examination program is to reach a final disposition in an application in 1 year. The drawbacks of the program are a relatively high fee for requesting entry into the program, restrictions on the number and type of claims, and the requirement that extensions of time will not be taken during prosecution of the application. However, combining a Track 1 Prioritized Examination request with a focused approach that directs the claims of the application to a specific, useful (albeit narrower) embodiment, can be a very successful strategy to achieve a valuable patent grant in a relatively short period of time.
5. Broad does not always mean better
A long-standing philosophy in patent law has been to claim an invention as broadly as possible to prevent as many potential infringers as possible. In theory this is a good idea; however, in practice it may not be the most efficient approach for a startup with limited resources. Instead, it may be more practical to focus the claims on a specific embodiment of the invention closely tied to an actual product/process being practiced or envisioned by the startup.
By focusing the claims in this way, an Examiner’s search and consideration will be limited to art related to the claimed embodiment and not irrelevant art arguably reading on overly broad claims. As a result, a valuable patent having claims focused on the actual activity or product of the startup may be granted more quickly. Such a patent focused on a specific activity or product of the startup, issued relatively quickly, can also be a valuable marketing chip for the startup with respect to investors and customers.
By taking a holistic approach to developing an IP strategy, and considering the items identified above, amongst others, with the help of a seasoned practitioner, a startup can develop a thoughtful strategy that protects their valuable IP rights while avoiding potentially harmful legal situations.
David M. Roccio is a partner at Lando & Anastasi, LLP, where he practices intellectual property law for clients in a variety of technologies including power systems, 3D printing, robotics, specialty coatings, commercial machinery, among many others. Dave is particularly interested in providing counsel to startups looking to develop and implement a strategy for protecting their intellectual property – especially foreign-based startups who wish to establish their business in the U.S. market, or U.S.-based startups looking to expand their business abroad. Dave may be reached at firstname.lastname@example.org or 617-395-7078.