The office works while looking at an Excel spreadsheet. Image by Tim Sandle
Three hundred seventy-four thousand six is the total number of patents. Statista.com quotes granted by the U.S. Patent and Trademark Office (USTPO) in fiscal year 2021, up from 352,066 in fiscal year 2020.
This relatively high figure comes despite the adverse impact of the pandemic on the global economy.
“The number of applications and grants of patents continues to grow because companies and organizations better understand the value of patents to their business,” says the patent attorney and intellectual property authority. Jeanan Glasgow George tells digital magazine. “Indeed, building an effective IP portfolio is vital to high valuation, which makes companies attractive to investors.”
According to George, understanding patent trends can greatly protect existing intellectual property and increase its value as businesses develop something new. However, she cautions that there are a few specific myths and misconceptions about “killing a business” to be aware of and to be wary of.
Help digital magazine business readers, here are her top six.
Submission for everything
George says: “Business owners who are learning about IP for the first time often experience a pendulum effect: Let’s write it all down!” You may have felt this when you picked up a book on IP strategy. Because you’ve read this article, you probably have great ideas that require patents. But don’t try to patent everything in the Idea Cache or Prototype Cache just yet, as not everything is worth patenting. First, you need to determine where you have the best chance of a return on investment.
“Besides, it’s a cliché, but it’s true in the field of intellectual property: quality is more important than quantity. It’s better to have one huge claim with lots of details, data, and use cases than a dozen failed claims of five to ten pages each. The minimum filing requirements are not those required to obtain a patent. Even if you manage to secure a patent or trademark by filling out a 5 or 10 page application, you may find out too late that it does not cover what you intended in terms of exclusivity, your company valuation, enforcement, and other important tasks. . benchmarks”.
George has an alternative recommendation.
Do it instead: Sort the IPs you think deserve a patent and file them with care based on ROI simulations. What you initially consider to be the most valuable IP may turn out to be less valuable to monetize than other ideas in your cache.
Waiting too long for a file
Make no mistake, says George: “Filing for intellectual property is a race. Whoever applies first and gets accepted wins and may shut down others, even those who originally had the idea. Waiting too long to file an application usually means that a patent will not be obtained. Too many companies are hedging and needlessly enduring a missed opportunity. In most cases, it’s not too late to apply for a patent on a new idea, unless you’re already on the market, because anything that’s already being sold and bought isn’t eligible for a patent. However, not obtaining a patent should not be the end. Most likely, you already have new IP candidates related to the original concept. By asking yourself questions like “What is the next generation of my idea?” and “What new capabilities and features were planned but not rolled out?” can spur new applicants for intellectual property.”
Do it instead: Collect all your “ducks in a row” and register as soon as possible. This avoids termination and better overcomes unforeseen obstacles that may delay or completely derail approval. If investor funding is relevant to the project, please note that you have a fiduciary responsibility for prudence.
Regarding the third area, George says, “Even for an expert in this area like me, I don’t even deal with my own contracts and securities. While I certainly can, I don’t. Instead, I prefer to do this work through a law firm because the stakes are high. In short, this is too important for me to risk missing an important line and losing everything. If you are going to take other people’s money at some point, hire a lawyer. Apart from the risk of serious losses, without an IP lawyer, you can still waste your time and money – even on something as seemingly important as filing an IP claim yourself. I was privy to information from lawyers that showed that every time a new IP client comes in and says “I wrote and filed this myself”, the law firm has to charge double just to cancel what was already there made. Many great writers contact me to correct their mistakes, but all too often this happens when their patents or trademarks are rejected. Wasted time, wasted money. Moreover, a response to a refusal is usually not enough, since a full retry is most often required. Such delays and major repairs require additional time and money.”
Do it instead: Safe fit performance. Hiring a lawyer with in-depth knowledge of the processes can save you time, money, and prevent lost profits.
Assumption of ownership
George asks, “Who owns your intellectual property?” and replies, “It seems reasonable to assume that if you create it, you must own it. But what if you hire someone—an employee, contractor, or salesperson—to also work on the prototype of your invention? Who created your application? Who developed your company’s website? Assuming that intellectual property is inherently “yours” can put you in a difficult position, as happened to a high-tech life sciences data company that turned to me for help. The company has developed testing protocols and algorithms that are unique to its business. The technology served to automate their work:
“Optimization of the workflow of employees; productivity increase; and, as a result, increase revenue and profit. They hired a third party to develop the necessary software, but did not ask an IP lawyer to revise the contract. The executive team assumed that by paying for software development, the company gets results. Unfortunately, once the software was finished and deployed, word got out to the company that their vendor was trying to license the software to their competitors. When reviewing the development contract, I found that they didn’t include an “assignment” clause. Although they conceived it and built it from scratch, this client simply agreed in writing to purchase a license for the off-the-shelf software they ordered. All they got was a license. While some will see this as mean and unscrupulous on the part of the developer, it is also a mistake on the part that commissioned this work due to a lack of due diligence. All terms must be read and fully understood before signing on the dotted line. Otherwise, what is yours may become theirs, even if you conceived it and paid for it.”
Instead, George recommends:
Do it instead: Use the utmost care when reviewing a contract and, ideally, seek legal advice to help review the terms of the agreement. Assumptions of what may seem like common sense can turn out to be fatally flawed thinking and the legally binding mandate that comes with it.
Patent get rich quick fantasy
George asks, “What if one patent generates $1 million in revenue?” Here she cautions: “Many people have a quick-witted fantasy and treat patents like million-dollar lottery tickets, mistakenly believing that if they apply, they will automatically ‘win’. However, as with a real lottery, the odds of winning are greatly inflated. In most companies, creating a product or service that owns the exclusive rights or licenses intellectual property to others does not, in some percentages of cases, generate a measurable level of return on investment. Not all patents or IP assets are of sufficient quality to be of value in the marketplace. In truth, most patents are half-baked and poorly researched, if not researched at all, and poorly registered. The invention may also not be perceived as valuable in the market.”
As an alternative, George suggests:
Do it instead: Stay realistic. While this may be patentable, it may be disadvantageous because there is no targeted market willing to pay for this solution. Even the best inventors often have to go through several iterations before they find the right idea that is both patentable and marketable.
Assuming only patents protect
Regarding the sixth and final idea, George says, “Did you know that having a patent doesn’t prevent competitors from suing you for infringement? Most inventors are unaware or fully unaware of this risk, often only becoming aware of it when they receive a dreaded cease and desist letter. It is essential to conduct research to identify patents from other companies that should be considered in the development process to ensure that your own products or services do not infringe on the IP claims and protections of others. If you are in a highly competitive environment where many companies obtain and modify intellectual property, you need to be aware of permission even if you are not pursuing patents.”
George’s last tip:
Do it instead: Conduct a clearing survey immediately. The earlier in your product development schedule you do this research, the easier it will be to design with other patents in mind. It’s much more difficult to fix a problem after you’ve launched your product, perhaps with financial support from other third parties, and then received a legal notice.
According to George, one of the most significant areas of missed opportunity for inventors, entrepreneurs and corporate leaders is a lack of understanding of the strategy and dynamics of patent applications. Because patents are often the most valuable intellectual property assets, she argues that it’s best to act in a prudent, professional, and risk-free manner.