Patent Startup Pills

Every day, communicating with startups, I often hear the following question:
And why should a startup think about patenting his development, if this is a rather long and expensive process? It's not a secret that there are a lot of opponents in the whole system of patenting, especially in the IT field. Even on Habré holivars occur quite often. Nevertheless, this is a very important step in the life of a product, which, above all, increases the likelihood of attracting investment, and only then protects it from competitors.

As practice shows, startups that receive large venture capital investments have several patents or patent applications, not only national but also international. At the same time, companies that do not have patents face difficulties in attracting investments. Venture capitalists and business angels prefer to deal with patented technologies and consider patent availability to be an important factor in making investment decisions.

Of course, a start-up needs an experienced patenting expert who will help identify a patentable subject matter, prepare a patent application, point out requirements that exist in various patent jurisdictions. In some cases, it will be rather difficult for a startup to prepare its own patent application for an IT solution or business method, and sometimes it is even impossible.

It is very important that, from a legal point of view, a patent gives its owner a monopoly on the use or sale of a technical solution in the country in which the patent was obtained and this allows for obtaining a good competitive advantage, as well as avoiding attacks from third parties with claims of infringement of intellectual property rights.
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The patenting strategy is important at the earliest stage of the product’s activity, and the strategy must be cascading with an increase in the number of intellectual property.

It is also important that the validity of a patent is territorial in nature, that is, it acts only in the territory of the country where it was issued, therefore the cost of patenting in several countries can be very high. Therefore, it is very important for startups to understand their market niche and decide on the geography of patenting. A good asset to save time and expenses is the PCT international patenting procedure, which provides the applicant with 30 months from the priority date to decide in which countries to apply for a patent. The priority date of a patent application is the date that a patent application is filed with the Establishment (central executive authority for intellectual property rights) or the appropriate authority of a state party to the Paris Convention for the Protection of Industrial Property, for which priority is claimed. The term of the patent is usually limited to twenty years, so the decision should be made consciously, assessing the commercial potential of the technology.

If a technical decision is published or disclosed on the Internet, at a conference prior to filing a patent application, the applicant has only half a year or a year (in some countries) to file a patent application, this is the so-called novelty benefit. It is better for her not to use or disclose information about the product in open sources before filing a patent application. Otherwise, there is a risk to receive a refusal to grant a patent in novelty according to its own publication or materials.

An important question is who will be only the inventor of the technical solution and who will be the patent owner in order to avoid further litigation. Effective use of the patent by the patent owner allows him to receive the maximum income from the production of products in which the patent is implemented. Also, a significant profit comes from the sale of licenses for the use of a patent. But do not forget that not every patent holder actively uses his intellectual property.

When thinking through the strategy of patenting, you should try to cover the widest possible protection of your product. If it is, for example, a web product, then patent the interface, register the source code. If this device, then try to patent the device itself, its appearance, a non-trivial way of its operation. The analytical online publication ArsTechnica published the results of research by MIT professor Katherine Tucker, according to which “patent trolls” cause the main damage not to large IT companies, but to startups. The claims and claims of such patent holders have led to a loss of $ 22 billion in venture capital over the past 5 years. Professor Tucker found that the higher the amount of investment or investor interest in the project, the more often lawsuits and other claims on copyrights and patents are filed. Thus, patent regulation in general is a positive tool for protecting intellectual property. The patent portfolio is analogous to “nuclear deterrence”, only in this case it provides the patent owner with patent deterrence.

Do not forget about such a concept as cross-licensing, this is when companies exchange licenses for patents, and now each of them has the right to use an improved invention. One of the important tasks of cross-licensing is to stimulate competition in the market. As a result, the agreement expands the boundaries for designing and creating new products based on our own developments using elements of the inventions of other parties to the agreement. That is why this type of license is widespread in the West, and especially in the United States of America.

To understand in the first approximation whether it is worth to patent a technical decision and whether there is a potential to get a patent, the following list of necessary conditions for making a decision will help:
• novelty - the algorithm / device or their combination should not be known, and they should not be published or disclosed, even for marketing purposes;
• usefulness - the technical solution has a commercial potential, it can be implemented in production;
• competitive advantage - obtaining a monopoly in the market, which puts an order of magnitude higher than its competitors;
• scalability - the technical solution is applied in several areas or has several purposes;
• inevitable publication - the product is hard and impossible to protect as a trade secret.

In the event that a technical solution meets one or several conditions, it is worth contacting an experienced patent examiner for immediate assistance in patenting.

The list of issues considered is not exhaustive and reflects the author’s position regarding the patenting of products for startups.