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Strategic Patenting
 

What to consider when you're filing a patent and strategic decisions you'll need to make.
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What is a patent? In a nutshell, it's a grant issued by the U.S. Patent and Trademark Office that gives you the sole right to manufacture, use, and sell an invention for 14 to 20 years.

But the patent process can be time-consuming -- with one to three years in the application process alone -- and costly. So how can companies patent strategically?

Inc.com recently talked with John Rock, director of intellectual property at Augustine Medical in Eden Prairie, Minn., to tap his expertise in this arena. According to him any patent you secure should be thorough enough and defensible enough that it covers all parts of your invention -- preventing others from copying your idea and lifting your technology, and keeping competition at bay -- or it's wallpaper. You decide.

And if you're going to stand behind your patents, you really need to manage them. You've got to know the limitations and strengths and weaknesses of your intellectual property.

If you're considering patenting your company's inventions and wondering how to go about it strategically, read these other recommendations from Rock:


Understand that patents are important capital assets. Start-ups, says Rock, need to know that patents really help capitalize your company -- they are an asset, an investment in your company. If you're raising start-up or growth capital or if you're selling the organization, having intellectual property can be a significant factor in the company's valuation.


Determine your long-term goals. Are you building a company with the intention of selling it? Are you planning to license the technology you're developing? Or are you in it for the long haul? Those are factors that will help determine how you patent.

If you're planning on building a company for the long term, you'll want to be aggressive by filing many patents around your products and technology, to "own" all aspects of it.

Say you have an idea for a product, and you've determined the best material to manufacture the product with. Naturally, you patent that. But Rock believes you should protect many versions of your product. He says to obtain patents for manufacturing the product using various materials but to take only the best one to market -- hold on to the others.

Strategically, you may want to create a barrier of entry for your competitors. In that case you may file several patent applications on many different things related to your technology, even if you are not interested in developing the technology yourself. That will prevent competitors from getting claims on other aspects of that technology.

If you plan on selling the company or licensing your technology, your patent strategy will differ. You may want to create barriers to entry, but you might take a more limited approach to patenting.


Consider the life cycle of your technology. Let's say you have a new technology, and you know that it's going to have a short shelf life -- in 5 years the innovation will be obsolete. You take 2 to 3 years to get a patent claim, and given the product's life span, you've got one or 2 years during which it will be on the market. So you have a 20-year patent with 17 years of protection left on a product that's no longer viable in the market. Rock asks, What's the point?

An example of a short-term product is a computer chip -- you know it's going to be obsolete in a few short years because someone is going to produce something that's twice as fast. Unless you have patented the underlying technology that every one of those chips needs, consider whether it's worth patenting before you go to market.


Establish your markets. Are there international markets for your product? Make sure you know, because the clock is ticking. A patent will not be granted in the United States unless the application is filed less than one year from the date that the invention was publicly disclosed. Then you have one year from the date you filed that application to file in another country.

The other global-versus-domestic consideration is cost -- obtaining international patents is expensive, and the ongoing annuities that you have to pay to maintain them overseas can be prohibitive. Typically you can spend $50,000 getting worldwide coverage, so you want to be sure about your international strategy. You can mitigate some of that cost by cherry-picking countries in which you'd like to patent. It helps to look at countries that have solid legal systems and strong enforcement rules in place, Rock advises.


Monitor your patent attorneys. Once the patent application is filed, a patent examiner and the applicant argue what aspects of the invention the patent will cover. Let your patent attorney know up front that you want defensible, strong patents and that you want to monitor patent activity. Always review any arguments before they are submitted to the patent office. If you don't get good patent coverage, you might not want to put money in the product, Rock says.

And Rock recommends that you involve your engineers in the process. Engineers can help patent attorneys understand the technology you want to include in the claim, and they can think of alternative embodiments -- different materials, things you left out, the essence of the invention, and other ways of doing what you're doing. Engineers can help you see what is critical to the invention -- and help ensure that you've got the those important elements covered.

Last updated: Jul 24, 2002




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