If you regularly speak to attorneys, you’ll begin to observe a standard response: “It depends.” That’s the response I got from sitting at a table with Gary Eastman, Managing Shareholder and Managing Partner of Eastman IP, and asked his opinion on whether all tech firms should pursue patents. Gary replied, “That’s an interesting question since there’s not a single solution. This is a product- and firm-based solution.”
If the answer isn’t certain, the issue is worthy of consideration, since patents are an important factor in expansion. Think of an inventor who has developed an item with novel, profitable code. In the pitch she makes to investors, she reveals that she’s not patenting her invention, but she will utilize their funds to initiate the patenting process. However, investors will probably find her product to be more vulnerable to competition, which could lower the trustworthiness of her business. In the end, it’s the possibility of a decrease in value, and possibly losing a deal. This is where a strong Technology Vision and Strategy come into play, as they guide decisions on intellectual property and help mitigate the risks of uncertainty, ensuring that a company can navigate competitive challenges with greater confidence.
Patenting is beneficial however, it is also true that many companies are unable to pay for the time and expense necessary for a patent. How can we CTOs expect to determine the need for a patent particularly when we do not be aware of how effective our product will prove to be? The most important thing, as per Eastman is to be aware of and take action with IP protection right from the start of the process of creating. This article will look at patents and the ways CTOs can maximize their protection ability.
Patents 101
It is estimated that the U.S. Patent and Trademark Office has granted more than 10 million patents! For an invention that be patent-worthy, it has to have three elements: unique valuable, practical or not apparent–meaning previously unattainable, a meaningful meaning that serves a reason that is not clear which a person with ordinary ability in the area will not consider the new meaning evident. After granting the patent, it grants an inventor or creator an exclusionary legal right to use the property. For a successful patent infringement lawsuit the plaintiff must prove that the defendant copied all of the patent’s elements and, if so, why it’s new, beneficial, or not apparent.
A patent is a limiting right. patents prevent other individuals from copying the idea or idea. However, it does not make it a guarantee that you’ll be able to develop the same thing again. That’s the reason why patents are excluded rather than being a guaranteed right. Eastman clarified exclusionary rights by using the classic illustration of A bucket and pail.
Inventor A invented and patented an oblong bucket object that has one end open. Inventor B created and filed the pail, which is a circular object that has one end open with a handle. Every inventor is granted a unique valid patent. This patent stops other inventors from making the same item. The inventor A could design and manufacture all buckets he likes However, he can’t make an actual pail.
What about Inventor B? While Inventor B may prevent other people, like inventor A in the production of the pail, he’s not able to make the pail using the bucket’s style. If Inventor B wants to make his bucket it would first have to obtain permission from Inventor A to make use of the design of the bucket. Patents are an exclusive right, as it stop other people from copying your new valuable, practical, and apparent invention or concept even though you do not own the rights to make the idea.
The issue of exclusionary rights is of special concern to the tech business. Code from open source is often used as a building block for innovative, original software. Every new, valuable, or not-so-clear code is patentable, however, the likelihood of legal liability is in the obviousness aspect. There’s a difference between what’s evident and what’s not. However, the distinction isn’t always clear even with an independent standard of review.
Timing Matters
In addition to obviousness, the timing is also a major concern when it comes to seeking protection for patents. For the United States, patents have the “twenty-year term,” meaning that rights to exclude can only be exercised for 20 years after the date the patent was filed. In the beginning, it was the United States government that positioned its patent protections following the model first to be created.
In the beginning, the inventor who was able to prove the date when they first created received the patent. In 2013, however, 2013 the U.S. shifted to the first-to-file procedure. The person who has the most filed date of effective is given the patent. This is why early filing, especially for temporary patents, has become ever more crucial.
International standards for filing are in force. For filing in the United States, inventors and innovators can file for patents within one year of the time of the initial offer or public disclosure date to apply for a patent. However, this isn’t the case globally. International rules stipulate that innovators and inventors have lost their rights to patent at the time upon the initial offer of sale or disclosure to the public. This ambiguity makes knowing the size of the market essential in the initial phases of registering a patent.
According to Eastman The general principle of filing provisional patents as early as possible. When filing a provisional patent the creator is given an entire year within which to file a complete utility patent. In the year, if the components of the invention alter, further granted patents are filed as provisional. After the term of the provisional patent, the utility patent is usually an omnibus patent to all patents prior. Several provisional patents are useful to expand a company’s portfolio and to establish a schedule of progress.
An excellent advice, according to Eastman One tip is filing a preliminary patent along with a request for not-publication. This way the patent’s design or information will not be released unless it is not published until it is approved by the utility patent. This request to not publish can protect valuable information over a period when the patent for utility is issued.
Creating an IP-minded Culture
To take full advantage of the protections granted by patents, technology firms must create an IP-minded mindset. New technology needs to be identified as well as monitored and monetized in a way that should not be confined to the upper levels of management. All employees could be involved. CTOs may create routine checkpoints to ensure patent protections are in place, and give technicians and engineers the chance to directly participate in the process of patenting.
A culture that is IP-focused can be institutionalized and incentivized. The awareness of IP concerns isn’t possible without the involvement of the CTO as well as other tech leaders. To promote participation in this area, those employees who pinpoint patent-worthy technology could be recognized by stages, for instance, the time their patent IDs are appropriately filed, reported, or granted.
We will look at an example of how a patent could be monetized and identified within an IP-focused company.
Step One
An employee who is conscious of the goals and rewards of patenting can identify new technology and particular components that are novel, and valuable, but not readily apparent.
Step Two
Employees fill out the report on inventions/innovation disclosures. The employee puts in the attention and effort in the report to ensure the technical details can be read by leaders who are not technical.
Step Three
The employee then sends the information to management who is educated to recognize the value of IP.
Step Four
Management comes up with a list of potential patent-worthy products and then sends the list to management at a higher level. Disclosure reports written by the innovator or inventor themselves are currently before management, containing the specifics of the invention that is which is due to be preventable.
Step Five
Management performs a cost-benefit analysis and makes business choices based on information gathered from the sources.
Step Six
Management prioritizes the ideas with value and chooses the ones that can be passed on to the Department of Law to be patented.
The process helps the business develop its attitude toward innovation. It is extremely valuable to begin by discovering the technology and the components that make it, as well as following that by analyzing and contrasting what it can do to be a part of the market. In the beginning stages of patenting IP attorneys frequently assist businesses to develop matrices that help determine the areas where IP protection will bring the best benefits. Without a system that engineers and technicians can determine and communicate proprietary materials managers never have an opportunity to make patents.
As well as assessing the potential Tech companies also need to evaluate the risk. Risk and conflict searches can be expensive, but they are essential. The good news is that these searches can be reduced to risky areas that are competitive. In analyzing areas the most likely areas for conflicts to occur, companies can reduce their risk in the exploration costs. As a CTO you should aim for the early identification of IP issues. The earlier detection of IP issues will greatly reduce the risk of future problems and also help prevent losing all proprietary rights completely.
To Patent or Not to Patent?
As Eastman pointed out, the decision regarding whether to file for patents is often not clear, and it can be as personal just like the firm itself. One of the most fundamental tools for evaluating is the cost-benefit analysis. The process of obtaining a patent takes a long time and is expensive. The benefit of a patent — its advantages that exclude others–should be greater than the dangers of not having one.
The aim of the process to protect yourself is to minimize risk, but it’s not the only method to achieve that. Patents have a catch and are exact documents of your inventions. When the exclusionary right incentive expires, your technology is accessible to anyone however disclosure might not be in the best interests of your business.
However, there are many other forms of protection readily available and may be combined or as a substitute for the patent. There are advantages and disadvantages to each method. As an example, what can be protected by patents could better benefit an organization by way of a trade secret protected from market access in reverse.
Copyrights and trademarks are other options to secure important IPs. “Know-how” is the term used for operational procedures that can provide effectiveness or savings in cost. It’s not a private, but they may play a crucial role in the growth of any business. Many times, the in-house contract agreements, such as confidentiality clauses as well as confidentiality clauses and non-competes are often the most vital. They should be drafted to safeguard the business from the employees it employs.
Should you consider using patents to safeguard your IP? Well, it depends. What is important is creating a corporate culture with a focus on IP. What is important is to establish an environment that begins in the lab and creates an internal drive for employees to become involved in the process of protecting patents.