Patent Strategy: Laying the Foundation for Business Success

All too often inventors and entrepreneurs spend so much time creating that they have their head down, plowing forward, focusing only on the day to day operations associated with inventing and growing a business. Almost without fail, inventors know very well what they have invented and what they plan to do, but they have a terrible sense of what their invention could be. Just the other day I had a conversation with an inventor who thought we might not be understanding his invention because the first draft of the patent application seemed to miss the simplicity of his invention. Our job as patent attorneys is to not only try and protect the invention presented, but to work with the inventor to figure out the full glory of what the invention could be and what it could evolve into.

A patent application should certainly protect what the inventor is doing and what they want to do, but remember that in order to get a patent you do not have to produce a working prototype. You just need to be able to explain the invention with sufficient detail so that others skilled in the relevant technology area could both make and use the invention themselves without having to engage in undue experimentation. What is “undue experimentation” is a topic for another day, but suffice it to say that invariably what the “invention” is from a patent perspective is much broader than what an inventor thinks they have, and that is one critical reason (among many) why if you can afford to hire a patent attorney or patent agent you are always going to be better served by doing so and will wind up with much broader protection than doing it yourself.

I constantly preach to inventors and entrepreneurs that they need to approach inventing in a business responsible way. That means that you should have immediate, short-term, intermediate and long-term goals and plans in place. Treat your invention from day one as if it will be wildly successful, at least when you are dealing with your patent attorney or patent agent. Give consideration to what the next several phases of development will be if phase 1 turns out to be successful enough to warrant phase 2 and beyond. By doing this you will start to fill out those short-term, intermediate and long-term goals, which if they can be defined enough on paper can and should be integrated into your patent application. Always think about where you want to go and how you want to get there, as well as thinking about what the competition may want to do to elbow their way into your turf if you are successful. The business reality is if you are successful there will be others who want to get in on the action, that is simple economics 101. So treat your patent application as a master plan and an integral part of your business development.

It is also critical for inventors and entrepreneurs to have a strategy to succeed, which seems simple enough, but is typically anything but simple for the creative types that are so good at inventing. The goal is not to create an invention that is cool, the goal is not to get a patent, the goal is almost universally to make money. The cool invention and patent are a means to the end, not the end in and of themselves.

If you approach your patent activities appropriately you can lay the foundation of a business plan, at least insofar as the technology and technological advancement of your innovation is concerned. But like almost everything in life, there is a cost associated with succeeding. The cost is hard work to be sure, but there will also be significant financial requirements as well. While you may need to bootstrap your invention and business, as you move forward you will invariably need funding. From Angel investors to start, and maybe from Venture Capitalists eventually.

Regardless of what you may have read or been told, investors love patents and a coherent patent strategy. Patents provide a competitive advantage, and those sophisticated in business know enough to look for and exploit whatever competitive advantage exists. Patents are the 800 pound gorilla of competitive advantage, but realize if you are going to want and need significant sums of money from investors rarely does a single invention or patent command attention. No one wants to invest significant funds into a company that has a one-and-done approach to innovation. You need to understand the road is long. Take a lesson from Apple, Inc. Innovate and then churn your innovation for all its worth, re-purposing the technology, expanding into products and services, constantly push the envelope and milk the golden goose for all its worth!

With this in mind, here are some thoughts to keep in mind as you consider your invention and patent strategy. If you can get one patent you can get more, you can constantly loop back for more protection and you need to keep a vigilant eye on your patent portfolio to continue to look for opportunities. Invention is not a singular event, and neither is innovation and succeeding in the marketplace with your innovation. It is a journey!

Developing a patent portfolio quick

There are several strategies for developing a patent portfolio in a relatively short period of time. First, you can file a patent application, but with the average pendency in the USPTO being well over 2 years you need to have a prosecution strategy that is calculated to lead to easy, quick issuance. While the original disclosure needs to be sufficient to support the entire invention, there is no need to file a large number of claims in the original application. Filing a small number of claims, even exceptionally narrow claims, can significantly increase the likelihood that an examiner will quickly address an application.

Second, Patent Examiners are also now allowed credit for conducting an interview prior to undertaking work on a First Office Action on the Merits. Approaching the patent examiner and offering to discuss the invention prior to a Action on the Merits may pay dividends, particularly given that patent examiners can now obtain 2 full counts of credit toward their quota if they dispose of a case without need for a Final Rejection. So if they allow a case without need for Final Rejection they get full credit and reduce the amount of time they need to work on the file.  See USPTO’s New Examiner Count System Goes Into Effect.

Third, maintenance fees are required to be paid in order to keep the patent from falling into the public domain. Maintenance fees are due at 3 ½ years after the date of issuance, 7 ½ years after the date of issuance and 11 ½ years after the date of issuance. Many inventors, particularly individual entrepreneurs, do not intend on making maintenance fee payments, which means their patents may be able to be inexpensively acquired.

Fourth, design patents are frequently overlooked, but when acquired in bulk they can provide a quick, cost-effective means for building exclusivity. Design patents have gained in strength in recent years due to the altered infringement test, which no longer focuses on the point of novelty. Thanks to the Federal Circuit’s Egyptian Goddess decision infringement analysis focuses on the totality of the alleged infringing product and whether an ordinary lay observer would believe the allegedly infringing device is a copy of the patented invention. Design patents have been issuing of late in as quick as 6 to 9 months. Anyone with a tangible product should not overlook design protection. It is cheap, easy and quick to obtain.

Keep going back for more patent protection

Just because you obtain a patent doesn’t mean you have exhausted the available protection that could be achieved from a patent application. There are at least two strategies that will allow patent applicants and/or patent owners the ability to broaden their patent protection and/or patent portfolio. First, a patent applicant may file what is called a continuation, which is a second application for the same invention claimed in a prior nonprovisional application and filed before the prior application becomes abandoned or patented. At any time before issuance, abandonment or other termination of proceedings in an earlier nonprovisional application, an applicant may file a continuation in order to introduce new claims.

Filing a broad specification with narrow claims (as mentioned above) can lead to the issuance of a patent relatively quickly in some cases. Coupled with a continuation strategy you can get a patent issued and circle back for additional protection. This strategy can be critical for start-up companies and small businesses who need funding. Investors love patents, and if you can get one patent they will know you can get others. So getting the first patent as quickly as possible and circling back for more can help entice investors to provide critical funding necessary for business expansion and further patent protections.

While many will tell you that no new matter may be added to an application once it is filed, you can indeed add new matter through the use of a special kind of continuation application. A continuation-in-part is essentially the same as a continuation except for the fact that new matter is added to the application. The new matter will not enjoy the same filing date as the earlier filed application, but it can be added to previously filed matter through the use of a continuation-in-part application. So you can file an application, obtain a patent and then add newly invented material into a continuation-in-part as you circle back for additional patent protections on the underlying specification. This may not be appropriate in all cases, but is an appropriate tool in some situations.

Additionally, when it is discovered that a patent is somehow defective, whether wholly or partly inoperative, invalid or just because the patent applicant claimed less then he or she had a right to claim in the patent, the patent may be surrendered and ultimately reissued after further examination. If you claim less than you are entitled to you can go back for more, as long as you do this within two years of the patent being issued. This is called a broadening reissue.

Strengthening your patent

There are at least two ways to strengthen your patent. First, you can strategically utilize reexamination. This first method is admittedly a tactic that is not appropriate for those who are risk adverse, but done appropriately in the right circumstances it can be used to significantly strengthen a patent. Of course, all patents are presumed to be valid, but patents that have gone through reexamination are entitled to an even stronger presumption of validity. District courts struggle with what this black letter law means, but seem to agree that it is very difficult, if not impossible, to invalidate patent claims that have emanated from reexamination. In fact, only once has the Federal Circuit declared a patent claim invalid after it had gone through reexamination.

A reexamination request can be filed anonymously, and it is only necessary to establish that a substantial new question of patentability exists as to any one of the patent claims in order to order reexamination. In the examination stage of the reexamination, normally all patent claims will be reexamined, even where the order has made a finding of a substantial new question for less than all of the patent claims.

Given that hindsight is always 20-20, mistakes and errors can and do come to light sometimes after a patent has issued. In this case consideration should be given to seeking a reissue. Unlike a reissue that seeks to broaden the scope of claim coverage, a narrowing reissue (i.e., any reissue that does not seek to broaden the scope of the claims) may be applied for at any time, assuming of course the patent is still in force. A narrowing reissue may be appropriate when a flaw or mistake is discovered in the claims that would render one or more claims wholly or partly inoperative or invalid. Furthermore, the failure to appreciate the full scope of the invention is an error correctable through reissue.

Conclusion

While the universal truth is that most inventions do not ultimately succeed, if you don’t plan for success from day one and chart a course for achieving success you are almost certainly dooming yourself to fail.  The more thought and consideration you give to the immediate, short-term, intermediate and long-term strategies you will employ, both in terms of protection and innovation, the more attractive your company will be to investors, and the more likely you will be to succeed.