There is a plethora of blogs and articles about questions startup entrepreneurs typically ask about IP (including our earlier blog post about patenting tips for Swiss Startups). In contrast to these frequently asked questions, this blog will focus on a selection of questions startup entrepreneurs should ask (or should not ask).
1. What degree of disclosure is required for a “good” patent application?
The patent system is based on a simple deal: protection in the form of a limited monopoly is granted in return for full disclosure of the invention. This basic principle seems to contrast with a common prejudice many people have regarding patents: that they are written in an overly cryptic way that actually leaves the core of the invention ill-defined and vague rather than fully disclosing it. Many inventors are therefore wondering if they can “hide” their invention in the shadows of complicated and, perhaps, even deliberately misleading language. However, this is a dangerous strategy which often leads down a slippery slope of increasing legal uncertainty and risk. In fact, a sufficient disclosure of the invention is required to receive patent protection for the invention.
How a lack of sufficient disclosure can impact patent prosecution
Leaving the exact nature of the invention unclear will likely cause severe problems during prosecution, if not inhibit it altogether. It is a general and necessary requirement in most, if not all jurisdictions in the world that the invention to be protected has to be fully disclosed such that a person skilled in the art can carry it out. This requirement is taken very seriously and interpreted strictly during examination. During and even after examination, many jurisdictions offer mechanisms to attack patents that do not fulfill this criterion, including so called third party observations and opposition proceedings. It should also be noted that it is not possible to leave out crucial information in the patent application at first and then hand them in later upon request by the examiner. The reason for this is the equally important and general concept that you cannot add subject-matter that goes beyond the scope of what was originally disclosed in the application as filed.
Risk of legal uncertainty after prosecution
Additionally, leaving out essential features of your invention poses a difficult-to-estimate, if not unpredictable future risk regarding enforceability. Having a patent just for the sake of it may be great and may convince customers and investors alike of the value of your technology. However, like a bicycle helmet that should not just look good but also protect your brain in an accident, a patent should also be strong enough to be enforceable: This includes being specific enough to clearly identify cases of infringement but also being able to resist the rigorous cross-fire during a fierce nullity suit. Once again, leaving out crucial technical information about the invention renders the patent vulnerable towards attack, which may eventually lead to its revocation.
Options for non-disclosure
Taken together, you should be aware that getting a patent comes at the cost of public disclosure of your technology. In other words, this is another ‘no free lunch’ situation. That being said, while the lunch may not be entirely free, certain discount options may be available: depending on your invention, it is not required to meticulously list every single bit of detail about all different aspects of it. Rather, it is can be sufficient to disclose the concept or the essential features of the technology in order to protect it and to prevent competitors from using it. Additionally, you can strategically decide to only patent and disclose certain aspects of your technology while keeping other aspects a trade secret. Striking this delicate balance of disclosing as much as required but as little as possible at the same time is not easy and usually requires years of experience, preferably in prosecution as well as litigation.
2. How to choose a patent law firm?
Choosing a patent law firm can be a daunting prospect for entrepreneurs who may view patents as a necessary evil rather than a valuable asset. However, there are a few questions to consider when choosing a law firm:
Does the law firm have experience in enforcing patents?
It should be noted that there is a big difference between obtaining a patent in the first place and actually enforcing it in the case of patent infringement. Additionally, many patents are actually infringed unknowingly by third parties and it is frequently up to the patent owner to actively identify cases of infringement and take legal action against them. Accordingly, if you are seeking to potentially enforce your patent as well, it may be advisable to choose a law firm that has experience in patent prosecution as well as enforcing patents and, ultimately, patent litigation. An additional benefit associated with this is that experience in litigation typically enhances the process of drafting a patent: practitioners experienced in both areas tend to draft patents that strike the balance between meeting the patent office’s stringent requirements of examination and enabling the unequivocal identification of cases of infringement.
Is the law firm big or small?
There is obviously no right or wrong answer regarding the size of the law firm. You may simply like the family atmosphere of working with a small law firm. However, larger law firms are frequently able to offer distinct advantages by virtue of their size. As an example, larger law firms typically employ attorneys in different technical areas who can quickly exchange expert opinions and provide insights into their respective fields. These synergies may be particularly advantageous if your invention relates to the interface of different technical areas. Additionally, many larger law firms are able to provide a broad scope of different legal services relating to IP without relying on outside expertise. Having a single law firm covering all aspects of IP is not only convenient for many clients, but frequently also translates into cost-efficiency.
Are there attorneys-at-law in addition to patent attorneys?
Even if you may primarily seek assistance in the technical drafting of patents, it is important to note that many questions relating to patents and, more broadly, intellectual property do not exclusively fall under the realm of patent attorneys but also require the expertise of attorneys-at-law. As an example, such issues may range from standard contracts such as NDA’s and License Agreements to more complex questions about indemnity clauses or the legal caveats of different jurisdictions. Accordingly, it may save you time and effort to choose a law firm that is able to draw on the expertise of attorneys-at-law and patent attorneys and is thus able to provide a holistic solution to all different aspects of intellectual property.
3. Why should startups have an IP strategy?
For startups striking the right balance between short-term success like getting your product ready for the market or launching its new generation and the long-term strategy can be difficult. Having an IP strategy definitely falls into the realm of the long-term strategy. However, it can hardly be overstated how important it is to have at least a rough outline of an IP strategy even as a startup company. This is particularly true if your company depends on a small number of technologies, or even a single technology. A basic IP strategy should include defining the core technological areas and their respective importance for the company as well as a thorough analysis of external IP rights to establish the company’s freedom-to-operate (FTO). The latter is particularly crucial for startups because even the possibility of facing a costly infringement suit is not just dangerous but often fatal.
IP strategy without patents
It should be noted that “developing an IP strategy” does not necessarily have to involve seeking patent protection. Alternative strategies to secure IP such as trade secrets are available and have their own pros and cons, as discussed in detail in several other blogs. Regardless what your IP strategy may look like, having a clear and unified view of it ensures that you consistently apply effective measures to protect one of your key assets, namely your technology.
IP strategy impacts business as a whole
Beyond protection of your core technologies, a clear IP strategy also enables you to make informed strategic decisions about the future development of your technologies. To fulfill this function, it is important that your IP strategy is aligned with your overall business strategy. This becomes even more apparent when you consider how many business implications intellectual property has at different levels across the company, including licensing opportunities, royalties and potential tax deductions on expenses relating to research and development (Patentbox). Consequently, developing an IP strategy early on will not just provide a useful tool for managing already existing IP but will also enable you to proactively guide your research and development such that it will serve your overall business objectives.
Patents can increase chances of attracting funding
Finally, a patent on your core technology will significantly enhance your chances of attracting funding. In fact, many investors increasingly require startups to have at least a pending patent application to be eligible for venture capital, particularly if large sums of money are at stake. This means that the cost of a patent should not be viewed as mere expenditure but rather as an investment.
4. Is my invention patentable?
The word patent is frequently associated with groundbreaking achievements such as the development of light bulbs or cars. Awestruck by the genius of Thomas Edison, Carl Benz or Nikola Tesla, many people may not consider their ideas to be worthy of a patent. However, it is a widespread misconception that patents are only available for groundbreaking inventions. In fact, the crucial criterion of “obviousness” or “involvement of an inventive step” is purely qualitative rather than quantitative in many jurisdictions. In other words, even small improvements of the prior art may be eligible for a patent.
Other important criteria
By contrast, there are other criteria an invention has to fulfill in order to be patentable. Some of these criteria, such as the requirement for novelty or susceptibility of industrial application, can be found in one form or another in most jurisdictions. Other criteria, such as what is often referred to as ‘technicity’, are less universal and can be difficult to evaluate. In this respect, questions relating to the patentability of computer-implemented inventions are particularly tricky. Different articles describing the various exceptions to patentability are available, including our blog post on how to protect your AI innovations.
5. What are best practices for protecting your IP when talking to a third party?
Although this is less of an exotic question, it is nevertheless definitely one you should ask. It can’t be stated too often that you should not publicly disclose any details of your idea until a patent application is filed or it was consciously decided not to seek patent protection for it. Even after filing, it is best to keep your invention secret for as long as possible in order to keep the option of filing further applications on improvements of your technology.
If you still have to disclose parts of or even the entire technology, this should be done only after having every recipient of the information sign a specific non-disclosure agreement (NDA). It should be stressed at this point that the use of a generic NDA available online can be risky, as discussed in more detail in this blog post. Additionally, it is advisable to keep a clean documentation record of your disclosures, which may serve as invaluable evidence in potential future disputes regarding the date of disclosure or even ownership. Specifically, we recommend documenting all internal and external communication, e.g. by keeping and distributing meeting minutes.