What You Need to Know About Patents

Should I obtain a patent?

Patents provide inventors exclusive rights in their discoveries. Entrepreneurs in the pharmaceutical, life sciences, medical device and many other fields look favorably upon the benefits of patents, including:

• Creating barriers to entry for competing products.
• Discouraging potential patent litigants.
• Enhancing company valuations.
• Generating licensing revenue.
• Facilitating cross-licensing and other strategic partnerships.

There is some debate over whether entrepreneurs building products in the computers, mobile devices, semiconductors and software fields should spend precious time and money on obtaining patents. While the benefits identified above are applicable in these fields, patents may not be a necessity if you conclude that:

• The expense in time and money outweighs the potential upside.
• The patent may be obsolete by the time it grants in a fast-moving industry.
• You can keep the “secret sauce” of your technology confidential and therefore protected by law as a “trade secret” (learn more in our article on Protecting Your Company’s Intellectual Property).
• You don’t want to antagonize engineers who are opposed to the idea of patents in these fields.

These are complex considerations. Any patent strategy should be informed by advice from a strategic patent attorney. Be wary of any management or engineering personnel that claim to have all of the patent answers. They may be right, but patent answers should be vetted in an open dialogue between engineering, management and a strategic patent attorney.

Utility versus Design Patents

Utility patents cover the functional attributes of a device or method. The vast majority of patents are utility patents. Design patents cover aesthetic features of an object.

What is a “provisional patent application”?

Provisional patent applications are patent applications that are not examined but are used to establish a priority date for an invention. Provisional patent applications are commonly filed as informal documents – such as a white paper, a software requirements specification, a product manual and the like. A provisional patent application may be converted to a utility patent application within one year of the initial filing date. Provisional patent applications need to contain a full and enabling technical disclosure (as do normal utility patent applications). If such a disclosure is absent, then the priority date is not established.

Where should I file for a patent?

A patent is only enforceable in the jurisdiction in which it is granted. Therefore, if you want worldwide protection, you must file a patent in individual countries worldwide. However, filing in multiple countries can be prohibitively expensive for a startup. Your business plan will dictate your strategy with respect to foreign patent applications. We consistently advise companies to focus on the US market, which is an economic behemoth, has well established patent rights and has relatively inexpensive enforcement mechanisms.

How to obtain a patent

Think of your innovations in economic terms: Would a customer pay for this feature? Would a competitor want to appropriate this feature? Does this feature reduce expense and save time? The technology to be protected also should align with overall business goals and strategic initiatives.

Here is a sequence of events once you’ve identified an innovation for protection:

1. Initial disclosure meeting with inventor and patent attorney.
2. Patent attorney prepares a draft patent application for review by inventor.
3. Iterations on draft patent application.
4. File patent application.

This process usually takes about a month. Afterwards, the patent application will be pending for several years prior to substantive review by the patent office, although there are various mechanisms to accelerate this process.

The US patent system is now a first-to-file system, so there is a large incentive to file patent applications as soon as possible. That being said, the US still allows filing of a patent application within one year of a public disclosure of the technology. The rest of the world does not observe this one-year grace period.

After substantive review of a patent application by the patent office, your attorney may submit a communication with patentability arguments and possibly claim amendments. This process may be repeated until the application is allowed or you appeal a rejection. It typically takes three to five years to obtain a patent, although this is highly dependent upon the field, claim strategy and prosecution strategy.

There are various fees associated with a patent – including filing fees, petition fees, issue fees and maintenance fees, which are incurred over a span of approximately 15 years. Of course, you also will incur attorney fees. The majority of the fees are incurred in the first several years. A patent is enforceable from the time that it grants until 20 years after the initial filing date.