Why Patenting is Important

Many startup founders recognize the importance of patent protection for their company, but with limited resources, they may ask themselves if the benefits outweigh the investment. Are patents really worth it? Some of the primary reasons for patenting include:

• Patents protect your innovations. Startups are often founded on their comprehensive research and development and proprietary technology, and a patent provides a competitive advantage by protecting this investment.
• Patents serve as a roadblock to competitors. With a patent, you’re able to take action against infringers or copycats who may try to piggyback on your success or move into the same space.
• Patents are important to investors. Many investors expect that your company has patent protection on its key technology to protect their investment in your company.
• Patents are an effective marketing tool. Patent-pending or patented technology often generates consumer interest in the underlying technology, lends credibility to the company, and can promote “customer stickiness” or brand loyalty.
• Patents can be used for revenue generation. Licensing agreements allow for the use of your patented technology in exchange for a specific fee, as outlined in the business contract.
• Patents provide employee and company recognition. Many bloggers and publications cover issued patents, showcasing breakthrough innovations. This often leads to positive publicity for inventors, startups, and the venture capitalists that have backed these companies.

What Can Be Patented

Even whilst recognizing the importance of IP protection, startup founders may wonder if what they are developing meets the most basic set of patenting qualifications. Is my technology even patentable? In short, patenting may be applied to any process or method, machine, manufactured article, new composition asexually reproduced plants, and aesthetic designs. Additionally, a basic requirement for patenting is that the technology must be novel, non-obvious, and have some usefulness. In this context, novelty should be defined as new and not known, and non-obvious refers to the invention being different and not an obvious extension of the technology before it.

Keep Your Ideas Secret

An important aspect of novelty involves maintaining the secrecy of your invention. In many countries outside of the United States, there is an absolute novelty bar. If you are seeking patent protection in a country with an absolute novelty bar, you should be wary of publishing your invention on a website, public product releases, customer demonstrations, scientific publications, and even investor conversations where specific information about your technology is disclosed. In the United States, there is a one-year grace period that allows for filing even after disclosure. Additionally, business information and processes that are kept in secrecy allow for protection through trade secrets. Therefore, it is extremely important to consider what may be patentable at your company before disclosing the technology. And if disclosing the technology is necessary or appropriate, make sure that you have an NDA in place to protect your intellectual property.

IP Harvesting to Patenting Process 

Before assessing the key innovations at your company for patent consideration, it’s extremely beneficial to have an IP harvesting process, whereby all innovations are captured. To establish an IP harvesting process, you’ll need to dedicate someone to this particular responsibility. For a startup, this generally falls under the scope of one of the co-founders, the CTO, or head of engineering. You’ll also need a database for collecting innovations, like a Google spreadsheet or Excel document.

The first step in this process involves the completion of an invention disclosure form by an inventor or by the individual or team responsible for obtaining information from your product or engineering teams. This document is simply a summary of the invention. Once a catalog of inventions exists, a designated invention review committee at your company will score these inventions to determine which to patent. The preliminary information gathered can be used to kick-off patent conversations with in-house or outside counsel, who will move forward with the patent preparation and filing.

An IP harvesting process also looks at setting up a periodic review of potentially patentable inventions. Regardless of whether or not your company seeks to patent, an IP harvesting process is an ideal way of highlighting company innovations, and this is especially useful for conversations with investors. Once your IP harvesting process is established, you may consider an inventor recognition or reward program for idea submissions or patents to acknowledge employee contributions and encourage continuous innovation.

Invention Cataloging and Scoring

Cognition IP has developed an Invention Cataloging and Scoring Worksheet which you can use to evaluate company inventions and steer patenting decisions. The overall score takes into consideration aspects of business value (what the invention means to your company) and aspects of leverage value (what the invention means to your competitors). Core invention involves how core, or important, the particular invention is to your company. If the technology is foundational to the company or may generate significant revenue, this should be considered core to the business. High-scoring inventions are those that give your company a competitive advantage or may be considered the “secret sauce” to your business. Used in product refers to whether or not the particular technology is actually used in some type of offering for your company. If this invention is being marketed to customers, it’s likely to receive a higher score for this area. Technology evolution measures how fundamental the innovation is, and new and nascent technologies would receive higher scores than smaller improvements in technology.

The factors used to determine overall leverage value should be considered from the viewpoint of your competitors. Interest to competitors looks at the appeal outside of your company. Technology with the potential for a lot of use or with a high likelihood of being copied should receive a high score. Detectability of infringement takes into consideration how easy or difficult it would be to identify competitors infringing on your technology. If your process is harder to detect, you should rate this lower. Claim scope takes into consideration the claims within a patent application. When a patent is filed, the claims are generally broad; they tend to narrow over the prosecution of the invention as an examiner tries to locate prior art and set the scope of your invention. The broader a patent is, the more valuable it is because of its coverage. When scoring this section, you may make an educated guess not knowing what the patent examiner might find, but should weigh broad claims higher than those that you figure to be more narrow. Patentability is somewhat of a legal determination, but the more that you know about where your invention sits within the technology landscape and about any prior art, you’re able to better assess patentability. For this ranking, keep in mind novelty and non-obviousness and give a higher score to inventions meeting these criteria.

While it’s important to note that some lower-scoring inventions may be deemed worthy of patent prioritization, this worksheet will provide you with a valuable frame of reference for analyzing inventions by quantifying their business and leverage value. And importantly, it will provide the backbone for establishing a fruitful IP harvesting process for your startup.

Resources:

Webinar: Creating an IP Harvesting Process for Your Startup

TechCrunch: IP Strategy: How should startups decide whether to file patents

Worksheet: Startup IP Catalog