Updated: Apr 25, 2020
The next time you are on the brink of a major product release, whether it is software or hardware, ask yourself this: Is there anything in our launch that should be patented? A good question to ask.
The beat of your company’s innovation pulse is based not on the ideas you’ve collectively dreamt about (some of which may have been developed and released to the field already). No, the verifiable heartbeat of a company’s innovation potential is measured by the number of patents and patent applications that are in their arsenal, which in turn bolster their intellectual property clout in the marketplace.
A company’s reputation as an innovator is not just due to the attractive revenue or the popularity of their products. Apple and Google are extreme examples of this patent effect; however, there is no disputing the fact that if your startup pulls in significant revenue, how much of that revenue is (strictly speaking) owed to your ingenuity or borrowed from others?
Breaking news: Many companies develop products that are based on ideas that they in fact do not own.
It is fairly common for the dev teams of many tech startups to have conceived their great ideas to make a product better while just sitting around a table in a conference room or on the deck chairs at the cottage. Yes, it is possible your great idea to develop a next-gen software app was conceived on the dock at the cottage some eight years ago. Yet, the sobering reality is unbeknownst to you someone else already filed a patent that encompasses that “great” idea just a few months later. So, then whose idea is it? Who owns it? I’d like to give the great minds lounging around the dock credit. Most national patent authorities (including the USPTO) recognize that the person or corporate entity that was the first to file their idea as a patent provisional or a comprehensive patent application are the rightful owners of that piece of paper recognizing the invention. Their idea. Not yours.
Furthermore, the patent holder earns rights which exclude others from making, using, offering for sale (such as marketing it) or even selling a patented invention (i.e. “Add to Basket”). Furthermore, if you patent the idea embodied in what you sell, you are entitled to that utility, business-process, or design, plus all of the associated revenue as compensation (also known as damages).
This means the inventors at the dock, who had the idea first and first developed it into a snazzy little e-commerce function three years later, then subsequently released it to the field without any intellectual property (IP) protection may in fact be exposed to patent infringement possibilities. It is feasible when a company runs such IP risks, they could end up in a nasty patent dispute (with or without the courts) and end up paying for damages to the rightful patent holder. (Btw, those patent holders are also probably on their dock at the cottage…need I say more.)
If one could time travel backwards to the point of conception, what we should have done was filed a patent provisional. A provisional filed to the USPTO (or the CIPO) by a recognized patent agent, buys you more time (under a year the moment it is filed) to draft a proper patent application. A provisional essentially provides proof that you intend to protect this idea later.
Patent provisionals are especially helpful if your time to market phase is accelerated, in which case rather than delay the product release, which has a patented method in it, just buy yourself more time. You have a year to file a proper patent application from the point of which the provisional was filed. You could end being granted a patent because you took time the to file it subsequent to a patent provisional.
There is no Jedi mind trick repeating to your competitors “This is not the idea you’re looking for…” over and over hoping to dissuade rightful owners. While startup companies are vulnerable to competitors or even patent trolls because they are often unprotected, reserving some of your venture capital goes a long way if it is used to draft one or more patents and protect what you’re developing. Also, conducting a patent search may also be helpful because it teaches staff that ideas may be protected by someone else’s patents. In which case, by becoming better informed, you can advise the design-team on a superior process and potentially avoid infringement.
Make sure to free up R&D funding to patent ideas and avoid being bogged down by litigation or licensing expenses later. Protecting your IP now ensures a more prosperous revenue projection down the road.