PATENTS PRIMER Patenting and IP Strategy for Startups

Dino Talic – 9 Dec 2011

Freelancer.com

Disclaimer

This does not constitute legal advice. Just a quick intro to the basic concepts.

Forms of Intellectual PropertyIn

dust

rial P

rope

rty Design

Patent

Trademark

Trade Secret

Cop

y-rig

ht Music, Art, etc

Term

Life + 70 years

14 years

20 years

10 years * X

∞

Forms of Intellectual PropertyIn

dust

rial P

rope

rty Design

Patent

Trademark

Trade Secret

Cop

y-rig

ht Music, Art, etc

Term

Life + 70 years

14 years

20 years

10 years * X

∞

This presentation

Patent• Exclusive monopoly in exchange for disclosure of

invention

Disclosure

Time-limited Monopoly

Patent Jurisdictions • A patent is only valid in the jurisdiction in which it is

granted• World Intellectual Property Organization (WIPO)

• Patent Cooperation Treaty (PCT)• Provides World filing for Patent Application

Criteria for Patentability• Patentable subject matter

• Some exclusions – e.g. Scientific discoveries, mathematical theories, etc.

• Useful • Invention must give rise to a specific, substantial and credible utility

• Novel • Not already known or previously disclosed

• Non-obvious • Must be inventive. Non-obvious to a person versed in the art. • Combination of prior art is not inventive – must be a distinct and non-

obvious advantage

What can Typically be Patented

General Concept

Specific Product

Not valuable

Not patentable, not enforceable

Invention

Valuable Patent

• Enforceable – obvious when a competitor is using patent and it will succeed in court

• Not easily avoidable – no obvious alternatives

Lifecycle of a patent

Filing of Patent Application

Formal Examination

Publication of

Application

Search and Substantive Examination

Grant and Publication

Opposition Proceedings

Lifecycle of a patent

Filing of Patent Application

Formal Examination

Publication of

Application

Search and Substantive Examination

Grant and Publication

Opposition Proceedings

Engineering involvement

• Prior art search• Patent Application draft• Claim drafting (with aid

of IP lawyer!)

Lifecycle of a patent

Filing of Patent Application

Formal Examination

Publication of

Application

Search and Substantive Examination

Grant and Publication

Opposition Proceedings

Engineering involvement

• Response to Office Actions

Lifecycle of a patent

Filing of Patent Application

Formal Examination

Publication of

Application

Search and Substantive Examination

Grant and Publication

Opposition Proceedings

Engineering involvement

• Expert witness in litigation

Anatomy of a Patent• Take as example US5579430

• Patent covering the MP3 format for audio compression

• Assigned to the Fraunhofer Institute

• Eventually lead to the development of the open source Ogg Vorbis file format as an alternative

Anatomy of a Patent

Title

Inventors

Assignee (Owner)

Patent #

Priority Date

Date granted

Relevant Prior Art

Abstract

Anatomy of a Patent

Anatomy of a Patent

Anatomy of a Patent – Detailed Description

Anatomy of a Patent - Claims

Reasons to file a Patent• Protect competitive advantage - prevent competitors from

using our inventive technology

• Prevent competitors from patenting similar technology

• Generate licensing revenue

Realities for a Startup• Protect competitive advantage - prevent competitors from

using our inventive technology

• Prevent competitors from patenting similar technology

• Generate licensing revenue

Takes 4 – 6 years to get a patent granted. On average $3M US to enforce

Realities for a Startup• Protect competitive advantage - prevent competitors from

using our inventive technology

• Prevent competitors from patenting similar technology

• Generate licensing revenue

Patents cost ~$50k each. Disclosure is free.

Realities for a Startup• Protect competitive advantage - prevent competitors from

using our inventive technology

• Prevent competitors from patenting similar technology

• Generate licensing revenue

Very costly and difficult to negotiate, especially for small companies

Reasons a Startup should file a Patent

• Increase leverage over a partner

• Deter a patent lawsuit

• Increase attractiveness for investment or acquisition

Why does Freelancer care?• Our competitors have patents

• We are worth suing

• Raising capital or selling company is difficult without IP

• Deter trolls

Patents – joint effort• Think about what is potentially innovative in your work

• Can we patent something now what we are likely to do in the future

• Seek help:• Fleshing out a concept• Preliminary Prior Art search• If your idea goes through to filing you will be an inventor!

Controversies• Particularly for software patents

• Non-tangible – should they be patentable:• US says YES• EU says NO

• Patent trolls – Intellectual Ventures

Further Reading

• Inventing the Future – An Introduction to Patents

• Patent Absurdity: How Software Patents broke the System

http://www.wipo.int/freepublications/en/sme/917/wipo_pub_917.pdf

http://patentabsurdity.com/

References• What Do Startups Need to Know about Patent Law

http://www.slideshare.net/JSchox/what-do-startups-need-to-know-about-patent-law

• Inventing the Future – An Introduction to Patenhttp://www.wipo.int/freepublications/en/sme/917/wipo_pub_917.pdf