Leveraging Patent Strategy To Diminish Risk And Cultivate Growth

Innovation thrives on the virtues of patent protection and the challenges that permeate the commercial environment.  Successful technology driven businesses often look to company leadership to implement a patent strategy aligned with the company’s business model.  Broadly speaking, technology companies utilize patent strategies offensively as a revenue source and defensively as a safeguard to threats of infringement.  Regardless of the specific strategy undertaken by a company, most successful technology companies make calculated decisions to develop strong patent portfolios for securing market share and diligently navigate the patent landscape proliferated by competitors to help ensure the company’s freedom to operate.

Realization of the benefits of patent strategies often warrants procurement of patent rights from each country in which protection is sought.  For instance, patent applications can be filed directly with one or more individualized countries of interest or indirectly through regional channels such as the GCC, European Union, ARIPO, or OIPI, or through more global channels such as the patent cooperation treaty (simultaneous filing of one patent application in up to 148 regions).   Although nationalization in each region is typically required through these regional or global channels, such multijurisdictional filings can provide significant efficiencies and cost reduction by eliminating redundancies.

As a whole, the procurement process for a patent requires preparation, filing, and government-vetting stages that are typically followed by one or more post-issuance maintenance or annuity fee payments.  Given the complexities of the patent life-cycle, patent attorneys are typically enlisted at the outset to collaborate with companies and its inventors for strategically describing and claiming the details of invention and filing the same with the commercially appropriate patent offices.

The examination process, which often involves iterations of persuasive argument and/or amendment in view of the prior art, can take a few years before final disposition of the case.  This is especially true when technological areas provide a vast array of prior art references.

Should time be of the essence, which it always is in the patent world, there are various tactics for hastening the process.  For example, countries like the U.S. permit applicants to file for expedited examination as long as certain requirements are met; these requirements often include payment of a government surcharge.   In addition, if one were to file in multiple countries, there are patent prosecution collaborations or highways available between many of the most commercially active countries.  These collaborations generally grant patents on unexamined applications that have already been examined and allowed in a reciprocal jurisdiction as long as the appropriate documentation is filed.  This may save significant prosecution costs and limit delay in patent issuance.

Once a patent is obtained, patentees may utilize the issued patent offensively under the threat of suit to prevent others from practicing (“infringing”) the claimed invention, or to leverage license revenues from potential or realized infringers.  Ownership of an issued patent can also provide some stable ground of operational freedom from a defensive strategy perspective in that it may provide cross-license leverage for other problematic third party patents.   Accordingly, developing a broad based patent portfolio with proper patent strategy can improve market presence and longevity of any company.

This highlights a very important point: the commercial use of technology bears significant risk if proper protections are not in place.

The most obvious risk is that of patent infringement.  New innovations and products are rapidly developing with more and more companies coming to industry.  If prudence is not borne, companies may find themselves infringing patent rights held by others already in the industry.

With the state of the art continually growing exponentially, it is important for companies to be proactive in knowing and monitoring the patent landscape of their technology, particularly when bringing new products to market.  Freedom-to-operate, invalidity and landscape studies can be useful, and often necessary, in identifying and establishing positions on existing patents bearing on these commercial products.   Early identification of potential patent issues can help to avert costly infringement issues down the road, particularly if simple changes can be made to design around problematic patents.

In many instances, products or services include cross-over technologies from previously segregated markets, further broadening the spectrum of potential patent infringement risks.  For instance, the building blocks of today’s cell phones utilize many types of technologies including, among others: connectivity, imaging, and audio.   This increased dimension of technology opens the door to more problematic patents, provides heightened competition, and results in a greater likelihood of patent litigation.

Risk further presents itself to companies, typically unwitting start-ups, who fail to file for patent protection at the outset because such companies may forfeit or otherwise miss the opportunity for procuring protection of their proprietary technology as the scope of prior art expands.   In other words, patent laws generally provide patent protection if the invention is novel and non-obvious.  That means that if some else invents, files, or otherwise publicly discloses first, then a dilatory company’s right to a patent may be forever lost.

Generally speaking, while many companies and individuals consider filing patent applications solely to prevent copying, there are many ways to leverage patents for business growth that go beyond protection and license negotiation.  Patents can facilitate collaboration between competitors, attract buyers, and enable companies to influence standards.  They may also serve as quantifiable evidence of innovation leadership that can engender new customers, suppliers, investors, and even employees.

To that end, the more a technology company and its leadership understand the value and the pitfalls associated with patents, the better the company will be able to optimize patent strategy and ultimately deliver business growth with improved margins and better relationships.

 

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