Building a Patent Portfolio29/07/2014
A granted patent gives its owner the right to recover damages when others implement the patented technology. However, the decision to begin building a patent portfolio is sometimes difficult to justify, as the initial investment in time and money can be hefty.
Each company will have different reasons to build a patent portfolio. For example, companies building products with a low cost of entry may need to rely on patents, and other intellectual property rights, to increase the cost of entry to competitors. On the other hand, companies working towards a product that is many years out will need to finance the research and development efforts until the product is on the market. For these companies patents can help in capital raising rounds.
Once the decision to file that initial patent has been made, many companies will approach a patent professional, and describe their upcoming product or project. Then, they will ask: “can we patent this”.
This approach works well only if the patent professional is well versed with legal, technical, and business aspects of your company. However, in most cases the company’s employees have invested significant hours analysing the technology, the marketplace, and the competitors. Your employees’ advice in those areas is thus vital to ensuring business objectives are met as you build your patent portfolio.
With that in mind, I invite you to consider a different question: “what ideas should we patent”, and let your patent professional consider whether those ideas can be patented. This article outlines a process which can help you identify which ideas you should patent. First, you need to identify the ideas in the company, and then categorize your ideas based on their importance.
Identify the Ideas
The first step in any patenting program is to identify ideas within the company, either by actively soliciting ideas from employees or by creating a system for employees to submit ideas. All ideas related to the company’s business should be considered. It is helpful to think of each idea as a solution to a problem. If possible, identify a problem you are facing, and the solution to that problem.
Categorize the Ideas
After identifying the ideas in the company, the second step is to categorize your ideas based on their importance. The importance of an idea will depend on two main components: (1) your company’s plans to implement the idea in a product, and (2) whether it is likely for competitors to implement the idea.
At this step a value judgement is added to the decision making process, as it requires looking out into the future and making predictions about your competitors. Such a value judgement is best made after considering the opinion of product managers, the technical team, and other stakeholders, as each person will add a different prospective. A product manager is likely to be aware of competitors’ positioning in the marketplace. On the other hand, members of the technical team are more likely to be aware of alternative solutions to the problem which your idea aims to solve.
Various categories are illustrated in the Venn diagram. All ideas collected are represented by the square. A first category of all the ideas collected is “P”, which represents product ideas. A second category of all the ideas collected is “C”, which represents ideas likely to be implemented by competitors. Some ideas are product ideas which are likely to be implemented by competitors, as shown by category “A”. Most resources should be spent on protecting ideas falling within the “A”, “C”, and “P” categories.
Ideas falling in the “A” category are the most important to protect. These ideas are ideas which your company plans to implement in its products, and your team has indicated as being likely to be implemented by others. By acquiring a patent, you can stop others from implementing those ideas. There is a strategic value to be gained by being the only company which implements those
Ideas in the “C” category deserve additional consideration. These ideas are ideas which your technical team has come up with but has no immediate plans to include in your product offerings. However, your team has identified these ideas as likely to be implemented by others. Acquiring patents related to those ideas will not provide the same strategic value as ideas in the “A” category. However, protecting such ideas provides increased leverage if a competitor threatens your company. Additionally, because these ideas do not help differentiate your products, they become ideal candidates for outbound licensing. Thus, the leverage provided can be translated into licensing agreements on terms more favourable to your company.ideas. Ideas in the “A” category will allow the company to differentiate itself from competitors, and further allow the company to attract business.
Ideas in the “P” category also deserve additional consideration. These ideas are ideas which your company plans to implement in its products, and your team has indicated as not being likely to be implemented by others. Acquiring patents related to those ideas provides protection in case your competitor implements the idea, contrary to your initial conclusion. Things can change over time, and in particular, if your company is successful, you will attract copycats. Additionally, it is vital to consider protecting those ideas prior to the release of the product to the public, as this can be a bar to patentability. Thus, by the time the copycats arrive, it may be too late to change course.
The remaining ideas are relatively less important to protect. Nonetheless, acquiring protection of the remaining ideas is important in case a competitor implements one of these ideas. Additionally, this category becomes more important when you’re negotiating cross-licensing agreements. The added volume of patents can deter competitors from threatening you.
Patentability and Patent Strategy
Now that you have identified the ideas you want to protect, the next step is to determine patentability; i.e. whether you will be able to get a patent or not. We recommend that you seek a patent professional’s opinion regarding this. Make sure to discuss your business needs with your patent professional, and to identify the features you consider to be most important to protect.
For each category of ideas, consider implementing a different patent strategy. Again, we recommend that you discuss your business needs with your patent professional to help you identify the best strategy for each category. The patent strategy should consider the company’s goals in obtaining the patent while keeping in mind the resources available. Here are some questions you should discuss with your patent professional when developing a patent strategy:
- Which countries do you want to protect your ideas in?
- Do you wish to pay additional fees to accelerate examination and grant of the patent application?
- How will filing the patent application help you advance your business goals?
The answer to each of these questions will vary for each idea, but should be similar for ideas falling within the same category. By categorizing your ideas and setting a patent strategy for each category you can maintain consistency in your patent portfolio, and you can save time and cost by not having to reconsider these questions for each idea individually.
There are many factors to consider when building a patent portfolio. By considering and discussing your business goals with your patent professional you can maximize the impact of the patent portfolio. Your patent professional will help you build the patent portfolio by guiding you through the process of applying for and obtaining a patent.
To help you build and grow your portfolio, contact one of our patent professionals.
This article is for information purposes only and does not constitute legal or professional advice.