Patenting for the small companyThe 50 to 499 person high-tech company

Jonah ProbellJonah@Probell.com

Nothing presented here is legal advice.Information in this presentation may be inappropriate for some businesses.Consult your own knowledgeable advisor.

A government-supported monopoly◦ For a limited time◦ In a particular region

On a technological improvement

To extract the economic value of a market segment

The intersection of law, technology, and business

Not playing the game is not an option

Under a first-to-file system, a company must act or be blocked by a later competitor

A company must understand both the rules and strategy

Patenting is mandatory

1. Desperation◦ In need of a patent to get funding

2. Disregard◦ Too busy on product development to spend time patenting

3. Exuberance◦ Behind a competitor in the patent race◦ Patent, patent, patent

4. Discipline◦ Significant maintenance fee and foreign filing costs◦ Thoughtful patenting decisions

The four stages of small company patenting

Comprises: CTO, Legal, and Marketing Meets quarterly Reviews market developments and competition Prioritizes invention disclosures for filing Checks product release schedule against invention

disclosures Plans US and foreign patenting strategy Reviews patent budget

The ideal patent committee

Maintains an accurate docket Solicits invention disclosures

◦ Hangs around the water cooler Conducts prior art searches Conducts inventor interviews Coordinates with outside counsel Routinely writes and files the highest priority invention Checks conference papers against invention disclosures Stimulates innovation

◦ See Michael Moore article: Hands-on counsel

The in-house specialist role

Each claim element limits the market scope◦ Fewer potential infringers have all features

Less market value Each claim element eliminates prior art

◦ Fewer references describe all elements Greater (re)exam strength

The double-edged sword

Claim elements

Value Strength

Value-strength inversion

Both allowability and enforcement are per-claim, not per-application or patent.

A motor vehicle (large market, much prior art)

A motor vehicle having:◦ Four wheels; (eliminates motorcycle and airplane market)◦ Two seats; and (eliminates sedans and SUVs)◦ A bed for carrying lumber. (eliminates sports cars)

A motor vehicle having:◦ Four wheels;◦ Two seats;◦ A bed for carrying lumber; and◦ 1001 colored lights. (no prior art, but no market)

Fancy truck claim exampleThe name of the game is the

claim.

1. Propose various claims of different breadths◦ Describe conceivable products of competitors, prospective

licensees, and potential acquirers2. Search for prior art and eliminate non-novel claims

◦ All material prior art must be saved and filed3. Analyze the market size that each novel claim can capture

Testing whether to patent an invention

Avoid focusing on your own products

Avoid searching patents, lest you learn that your product infringes

Thoroughly search non-patent prior art to save the examiner time◦ Examiners only have a few hours for each application

Let the examiner find patent prior art Add and amend claims Finding prior art strengthens a patent

◦ Acquirers and investors study patent applications’ histories

Searching prior art

The examiner is your friend.

Brainstorm frequently and informally◦ Start in the kitchen, move to the whiteboard

Be aware of projects underway Query inventors on:

◦ Recent problems solved◦ Product differentiation◦ Competitors’ developments◦ Market needs

Never reject an idea◦ Encourage creativity◦ Keep a long list◦ Solicit invention disclosures

Harvesting ideas

Effective brainstorming can spawn product innovations.

What is the problem being solved? Draw one or more diagrams showing all elements How does the invention work (a few paragraphs) What are the minimum basic components / steps What are some useful variations? Propose some claims (optional) What competitors and markets would be captured by

patenting this invention? Who contributed to the invention?

The invention disclosure form

Capture whiteboard drawings Edit claims together using a projector

◦ Keep the invention disclosure at hand1. Have inventors dictate a picture claim2. Break out dependent claims3. Achieve the broadest reasonable claim 14. Define technical terminology

See D. C. Toedt paper: Reengineering the Inventor Interview

The inventor interview

Avoid inventor “myopia”.Describe other companies’ conceivable products.

No visible deadline for many filings Product deadline pressure is ever-present

◦ There is never a good time to work on patents Bonus programs are insufficient motivation Assign inventors time to review applications

The busy inventor

No part of a well-executed strategy◦ Used by pre-funding startups◦ Used by unrepresented inventors◦ Used for unplanned filings before public disclosures

Conferences Postpones receiving an enforceable patent Encourages careless drafting

Provisional patent applications

Foreign applications must be filed within one year of US filing

Consider where likely-infringers reside Consider foreign market size

◦ But only what products might be made if the US market is closed

Use PCT procedure to buy an extra 18 months if needed

Determining where to patent

Budgeting

These are gross

approximations

Activity Approximate attorney fees

Approximate Office fees

US non-provisional (regular) patent application

$10,000 $1500

Strong US non-provisional patent application

$20,000 $1500

Provisionalpatent application

$500 $130

Strong provisionalpatent application

$8000 $130

Provisional conversion $6000 $500Translation (per language)

$5000

PCT procedure $500 $2000Per-foreign office filing $3000 $1500Enforcement litigation $4,000,000

Patenting is mandatory Draw a team from technology, legal, and marketing Harvest ideas Be quantitative in choosing inventions to patent Search thoroughly, but only non-patent prior art Allocate inventors’ time for patenting work Consider international strategy and budget

Conclusion

Thank you