What is a patent ?
• The word patent means "open"
• A patent is a 20 year monopoly on an invention
– Requires disclosure of the invention
– Must “enable the invention”
– Should teach “best mode” of the invention
• Patent holder has 3 negative rights:
– Prevent unauthorized manufacturing
– Prevent Transport of unauthorized product
– Prevent Sales of unauthorized product
• A patent must be registered in the country for which rights are requested
• If infringement is in a part, we can block an entire device utilizing the part, or obtain royalties on the entire part
What can be patented ?
• While each country has its own legal definition, as an example U.S. law (35 USC 101) states: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor”
– A process or method (such as a novel algorithm to process sound)
– A machine (something with moving parts or circuitry)
– A manufactured article (such as a tool or another object that accomplishes a result with few or no moving parts, such as a pencil)
– A new composition (such as a new pharmaceutical)
• Abstract ideas are not patentable
• Merely requiring generic computer implementation fails to transform an abstract idea into a patent-eligible invention
What can prevent you from getting a patent ?
• No Patent if:
– Patented or described in a publication anywhere in the world before your “invention”
– In public use, or offered by for sale, before you apply for a patent (a 1 year grace period may apply in US against your own use/offer)
– Release to sample, which means it will be in a customer’s hand, or release of a data sheet, is publication/public disclosure (unless there is an NDA, and customer KNOWS that this is covered by the NDA)!
– Must file for an application before publication
– Telling customer, or putting the invention in a data sheet, without a proper NDA, is publication
– Must file EARLY – as soon as conception! Remember you, and your competitors are all in same market – solving the same problems!
• Grace Period
– In the U.S. there is a grace period of 1 year from your publication for filing. Note, if someone else files in the interim, and didn’t copy from you – you are out of LUCK!
– Rights in ROW (rest of the world) are forfeited
Why is a patent valuable ?
• 20 year monopoly on the "invention"
– The monopoly rights are defined by the wording of the independent claims of the granted patent
– It is a commercial right – i.e. it can be enforced in court in the country where it is registered
– The infringing party will have to pay damages and a royalty fee
– An injunction blocking sales may be possible
– An injunction blocking imports may be possible
What does a patent do for your company ?
• 85% of the value of Fortune 500 companies is composed of Intellectual Property
– Provides licensing, or cross-licensing opportunities
– Having many patents protecting different aspects of a product, means a competitor will have to infringe something.
– A patented product is differentiated from the competition. Particularly if the patent gives an improved functionality!
– Having a patent on the product improves salability – shows it has innovation
– The ability to block potential competitors from competing directly increases the value of the company
– Generally allows you to charge more for your product or service
– To be successful, you want to be “different”. If the differentiation is not supported by patent protection, the "knock off" time may be too small to justify the investment
File early and file often
• First to file – whoever files first - owns the IP rights
• Filing early helps limit the risk that a competitor may obtain a patent on the same idea
• Early filing, and the resulting publication, provides "prior art" to protect against competitor patents
• Filing for each improvement, as it is made, results in an arsenal of patents that a competitor is sure to infringe at least something
• Early filing improves the chance for a valid and broad patent
Some details regarding patent prosecution
• Patent prosecution is the interaction between applicants and their patent professional with the patent office to obtain a patent
• Typically, patents are examined in turn, however in some cases you may be able to advance the application in the queue
• For patents pending in the U.S., the inventor, the company and the patent professional are required to disclose any information that they know of which is relevant to patentability ( filed on an “information disclosure form” - IDS)
• Israel and India have somewhat similar requirements in terms of disclosure of prior art found by other patent offices
• The patent office examiner searches the prior art, and often finds a reason to reject some or all of the claims as either:
− Anticipated by a prior art reference
− Obvious in light of one 1 or more references. References can be combined to teach all the elements of the claim
• The patent professional, if necessary in cooperation with the inventor, modifies the claims and/or explains the difference between the claims and the references until an agreement is reached as to what is patentable
• The patent office issues a Notice of Allowance and the company pays the issue fee
• The patent then issues
• Maintenance payments must be made in order to keep the patent in force for the 20 year period
• In Europe the patent granted by the European patent office must be validated in each target country
• Must prove infringement
• Burden is on the patentee
• Must demonstrate that each and every claim element is in the infringing product
• In the US there is the discovery process which may be helpful if you can only make a “likely” case
• Rest of the world – no discovery process
• Important value question – will I know if the patent is infringed?
Use of Patent in Marketing
• Smart marketers use every advantage they can find to promote their products
• Effective promotion of a company’s patents can differentiate its products and emphasize its novelty
• When a product is covered by one or more patents, you have the elusive “absolute advantage” that all marketers seek
• You can use patent pending as soon as the provisional is filed
• Marketing and R&D teams need to be in sync – are we patenting the sellable features (or at least a key implementation)?
• It is important to file a patent application for each of the innovative aspects of this brilliant new product
• HOWEVER, it is generally not a good idea to get into patent discussions with customers
• For each company, situation, an appropriate strategy needs to be fashioned
Intellectual Property Strategy
• Appropriate strategy must be crafted taking into account:
– Stage of product life cycle
– Size of company
– Size of competitors
– Market situation
– Ease of design around for patents
– Ease of “knock off”
• Use patents to protect your market niche – patent your “technological edge”
– you hold a monopoly on that edge
– competition is more indirect – “can’t compare apples to apples”
– add credibility to your product line
• Defensive patents – prevent a competitor from suing you
– used for cross-licensing
– if you are attacked, you can counter-attack
• Defensive publication
– Keeps potential competitors from filing patents “around you”
• Geographic distribution of strategy – related to value