What big companies can teach startups about patents

Patents are critical for startups, especially in their infancy. It’s important to know the “whats” and “hows” of innovation protection, but they’re not always obvious. A startup can steal the best patent strategies from big, well-established companies even if they have a limited budget. 

There’s no doubt that patents are expensive. Your company can’t beat the value of a strong patent portfolio. There are a few common denominators behind strong patent portfolios:     

• To draft the claims, you’ll need a skilled patent attorney
• Key products get broad patent protection
• Strategic market segments and geographies protected by patents 
• Keep an eye on your competitors’ patenting
• Management of the patent program in-house

How does a patent strategy work?

Patent strategies are steps companies take to protect and position their inventions, innovations, and/or intellectual property. Your patent strategy covers which innovations you want protected, which markets you want protected, and who you hire to prepare your patents. 

A patent claim defines the scope of the protection that the patent will confer, while the rest of the patent provides support and background. Avoid common confusion by aligning the title, summary, and abstract with the claim scope. 

A patent applicant has to explain and distinctly claim the subject matter they consider to be their invention. You need to make sure each claim isn’t too broad to avoid prior art or too narrow to be worthless for enforcement. The meaning of a patent claim can be changed by a single word in unintuitive ways.

Infringement example

Among its products is a traffic radar manufactured by Kustom Signals Inc, which holds a patent for digital-signal processing. It claims to “select either the greatest magnitude or higher frequency search.” It sued Applied Concepts for patent infringement since the accused device searched for both. 

In the end, it came down to whether the word “or” was interpreted as a choice between the two alternatives. Had Kustom Signals used “and” in its patent claim, the result would have been different. “Or” means exclusive, while “and” means inclusive. The two words have vastly opposing claim scopes. Other words have also been interpreted weirdly in courts, which can be a trap for unwary people.

What you need to know about patents

Utilize these five steps to make sure your business doesn’t run into issues like the one above.

Make sure you get a good patent lawyer

Just saving money on patent approval or enforcement for the sake of the financial impact is bad planning. You shouldn’t. Paying for critical review and legal costs to create or enforce a patent almost always ends up costing more in the long run. You should hire someone to draft and submit your patent application

There’s a misconception that all patent attorneys are equally good at drafting patent applications. Within the subset of lawyers who specialize in patents, there is a wide range of effectiveness. To ensure good results, it’s crucial to vet a patent lawyer’s track record and pay close attention to their historical data.    

A lawyer who is less proficient at drafting a patent application will inevitably cost startup founders more in total costs and time. Alternatively, they may think that drafting the patent application on their own will save them money. Both scenarios have a high probability of compromising patent coverage and can delay issuance of the patent for years if extra rounds of arguments are involved.    

Select a seasoned patent attorney who can provide both a realistic timeline and a realistic chance of success for your patent, as well as enumerate the legal requirements for your patent. I’ve mentioned it before, but the wording of the patent is the most important part. It’s vital to hire a high-quality legal expert to draft the patent.  

Patent agents can draft patent applications legally without a law degree if they’re technically trained and licensed. In the same way, they should be vetted for performance, experience, and technical familiarity.  

2. Better patent protection for key products

Generally, the fewer patents covering a product, the easier it is to design a competing product around it. In most cases, big corporations know a single patent won’t protect a product or invention. It’s not uncommon for phone manufacturers to have hundreds or thousands of patents for a single phone. 

Small startups may economize with a single patent per product if they’re on a tight budget. Especially for revenue-potential products, a portfolio of patents protecting their unique features and components is a better strategy.

When you invest across a broad technological landscape, you secure multiple patents, so competitors have a hard time discovering design-arounds with any knock-off. It also opens up possibilities for startups to commercialize by licensing parts of their products or spinning them off.

An enterprise’s patent protection budget should be prioritized based on future portfolio value. A good alignment between your patent portfolio and revenue is smart.  As the product gains strategic relevance in an enterprise, this initial investment creates the opportunity for continuation applications to get more patents.  

3. Strategy that’s based on the market

It’s important to take global markets into consideration when developing a patent strategy. Startups are eager to patent their inventions internationally without due consideration.  Experienced companies realize that registering a patent for every market is overkill. Not only is this cost-prohibitive and commercially unwise, but it’s more strategic to map out protection early. In order to block serious competition worldwide, a clever and calculated approach takes into account manufacturing locations, customer use, and competitor footprints.

Patents should be filed exclusively in key markets with reasonable protection that will secure at least two-thirds of future product revenue.  By securing the essential European hubs (France, Germany, and the UK), competitors can’t release a competing product in other European countries without crossing protected markets. 

The master plan also requires startups to constantly calibrate their patent portfolios to determine when to stop maintaining patents in unprofitably overcrowded markets or where demand has fallen.

4. Keep an eye on your competitors’ patenting

In addition to building their patent portfolios, sophisticated companies continuously monitor their competitors. It’s important for big companies to monitor their competitors‘ patent portfolios to identify attempts to undermine their own patent protection, and take proactive action to challenge or invalidate their competitors’ patents. Patent offices are notorious for missing key roadblocks that prevent patent protection, but offer ways for competitors to fix them.

Patent surveillance helps companies discover new products and marketing strategies competitors are attempting to exploit before they’re known. Competitors filing patents in new product categories or countries probably plan on entering those markets. On the flip side, patent surveillance helps conserve patenting efforts in already-saturated markets by keeping a pulse on crowded markets.

5. Bring in an in-house lawyer

To coordinate with innovators, large companies usually hire in-house lawyers. Most patent strategies are implemented by outside counsel. Aligning business and strategy is easier with a strong in-house legal team. When it comes to more complex tasks like drafting and arguing with the patent office, outsourcing expensive outside counsel makes sense. A full-time internal resource is still a luxury, so an outside patent attorney experienced in managing and creating strategic patent portfolios can fill in until growth justifies an in-house resource.

Having a serious patent claim against a startup’s key product is an emergency that requires in-house counsel right away. There’s an existential risk to patent battles, so you need full-time help. In-house counsel equity is an affordable and practical workaround to get in-house counsel.

Keeping a long-term view

Almost every startup is under budget, so economizing at all costs is understandable. A start-up can protect its most valuable asset, its intellectual property, by adopting the best practices of larger companies. Starting with a well-vetted initial investment and a pragmatic patent attorney ensures long-term success for even the smallest startups.   

Getting broader patents that protect a portfolio starts with hiring a skilled patent attorney. It’s not necessary for startups to copy big companies’ patent strategies. The only thing they need to do is adopt similar strategies that will help them overtake larger competitors. 

The adoption of this strategy means startups don’t have to reinvent the wheel. Scale down these efforts while keeping these best practices in mind.  Adapt your patent filings based on strategic goals, geographical markets, and competitive intelligence. When you hire in-house counsel, you’ll have a baseline portfolio that you can build on with compounding success.

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