When I asked the scientists if they thought they wrote high quality applications, they exclaimed, “Yes! They were based on issued patents and published applications.”

As you can imagine, we had a lively discussion after that.

Why Not Write Your Own Patent Applications?

Using issued patents as a model is not a smart strategy, especially in cutting-edge technologies. Issued patents contain claim sets that are, at best, several years old. With the courts constantly refining the meaning of the statutes, what was once valid and common practice may now be invalid and clearly ill advised. Your IP professional makes it their business to know the current best practices in light of recent court decisions.

Using published applications may be even worse. While they are fresher than issued patents, one would need to examine the file history of the applications to ascertain if the patent examiner had objections to the claims, or if they had even been examined yet. I know the scientists I spoke with did not read the file histories of the published applications.

The bottom line is you may think you are saving money by filing your own provisionals and handing them off your attorney or agent a year later. But having to rework your application may be more expensive than writing it from scratch. Plus, you are betting that you did not make any fatal mistakes that will result in loss of rights.

Seven Things You Can Do to Save Money

Start with an IP strategy and file applications that fit your strategy.

Seek out an IP professional with background and experience in your technology.

Prepare clear technical descriptions of your inventions and provide those to your attorney or agent. Tell him or her about the breakthrough features and how they fit your product and business strategies. This will make it easier to draft the most comprehensive application.

Provide detailed examples with experimental data if you have them. Comprehensive examples increase your chances of capturing broader claim scope.

Provide supporting references and documentation. This will save time and money for preparing and filing information disclosure statements. And be sure that you do not hide references that potentially disclose elements of your invention. (More on this in a future posting.)

Thoroughly review the application before it is filed. This means more than looking for typographical errors. Be sure the essence of your invention is captured in the claims. But also check that it is not projected too far beyond the limits of your examples. Many patents have been invalidated years after issuance because the claims lacked adequate support.

Finally, listen to the advice of your IP professional. It’s why you are paying them.

And, whether you are celebrating or wishing things had been better, you should use today to take positive steps to secure your company’s IP.

Since IP Day 2009 there have been court decisions affecting the breadth and enforceability of IP rights, and many companies found their patents challenged and invalidated by competitors.  Some of those companies are based in San Diego.  One likes to think that everything is under control.  Then, in what seems like an instant, a court decision changes the outlook for patent or trademark protection, and ultimately for the company’s commercial success.

For example, just this month, the U.S. District Court in Delaware ruled invalid five patents that cover Santarus’s Zegerid for heartburn and acid reflux. The court found the patents invalid due to obviousness.  Santarus will appeal, but their stock has suffered and they will be involved in a long battle.

So, today you could call and thank your IP professional, or party this evening with the Licensing Executive Society, or even download a postcard commemorating IP Day.

More importantly, you should start working on your IP strategy and risk management plan.  Such tasks may seem daunting, but the costs of doing nothing will far outweigh the effort to get started.  So, take a cue from WIPO and make World IP Day 2010 the day you take positive action to secure your company’s IP future.

And while we are on the subject of “days”, don’t forget, Mother’s Day is May 9.

The Status Quo

New product concepts flow from a combination of market research and scientific developments.  Scientists and engineers identify what they believe to be a discovery or invention, and they convey it to outside counsel.  The attorney files a patent application and, with each new discovery, another application may be generated.  Eventually the company has a pile of applications they refer to as a portfolio.  And, unless you have performed a Spring Cleaning, you still have the pile of pending applications.

Who’s In Charge?

Someone within your company needs to be paying attention to this assemblage of patents and applications.  Experience shows that this individual is usually someone who has many other significant responsibilities.  It may be the director of business development, the CSO, a lead scientist or engineer, or even the already over-worked general counsel.  Adding IP management to their role, when they are not necessarily trained in the field, serves to dilute their effectiveness in their already critical functions.  This is a weak solution to managing your portfolio.

Likewise on outside counsel to formulate, manage, and execute your IP strategy may not be the most effective approach.  Indeed, while outside counsel may certainly possess the ability to do it all, you likely do not have the budget to cover the expense.

Formulate, Manage, and Execute

The best solution is to have a full-time employee paying attention to the IP portfolio.  This individual would understand your business plan and the development program, and be trained in intellectual property in order to formulate, manage, and execute your IP plan.

Do you have to hire someone full-time?

These days, companies are adopting virtual business models.  They outsource as many of their core functions as possible to keep their employee and operating expenses at a minimum.  Pharmaceutical companies outsource research and development, pre-clinical, and clinical studies.  High tech companies outsource development and manufacturing.  Financial and marketing functions are outsourced as well.

Outsource IP?  Are you Kidding?

You already use outside counsel.  It’s a natural step to use consultants to assist in developing and executing your IP plan and coordinating with outside counsel. And, while it may seem as if hiring a consultant to assist with in-house matters will put a strain on your budget, it will actually decrease your overall costs by having dedicated expertise available to you when it is needed.  It will also relieve the added burden on employees who have other pressing responsibilities, thus increasing their efficiency.  Applying the approach discussed in Spring Cleaning will actually pay for the help you’ll need.

What are you waiting for?

What does this have to do with intellectual property?

Get Out the Mop and Buckets

Spring is a good time to clean your IP portfolio. I’m only kidding about the mop. However, you will need three buckets. One for the patents and applications you need, one for the ones you don’t, and a third for the ones you are not sure about.

Compare each patent and application to the current IP plan, as well as the R&D and business plans. Has Marketing changed direction and decided to pursue a different product line? Put the application in the “don’t need” bucket. Perhaps one of your candidates has failed in clinical trials. You may still need the application to cover the backup candidate in the series. Each patent or application must be assigned to one of the three categories. Ultimately you would like to have very few in the “not sure” bucket.

The Cost of Not Cleaning

Pending applications cost money. Responses to office actions must be filed to avoid abandonment. In Europe, for example, fees are incurred yearly while the patent application is pending.

Maintaining issued patens costs money. In the US, maintenance fees are assessed at 3.5, 7.5, and 12.5 years post issuance. The current fees total over $7,500 (half as much for a small entity). In Europe annual maintenance fees rise constantly until the final 20th year. Current EPO fees amount to 19,300 Euros (over $26,000) over the 20-year life of a patent.

Virtually every country assesses their own fees for filing, prosecuting, and maintaining a patent or pending application.

On top of the administrative fees from patent offices, you also incur charges for counsel to respond to office actions in pending applications.

If you take no action, these charges will continue to accrue.

What if you could review your portfolio for free?

When you total the costs of maintaining patents and applications across the whole portfolio, amount will likely be substantial. Even the most modest cleaning of your portfolio will more than cover the cost of the review. It’s almost like getting it for free.

When was the last time you did some spring cleaning? Contact me for assistance or to facilitate a portfolio review.

A wise friend of mine once told me, “Hope is not a plan.” This is especially true when it comes to IP protection for your product and business. Having a real IP plan, instead of hoping that all of those applications you’ve been filing will stop infringers, is fundamental to your business. And it’s well within your grasp.

The Invention – Patent Cycle

In most companies, scientists or engineers invent something and send an invention disclosure to the patent attorney. An application is filed and the cycle repeats itself. The result is a sizable patent portfolio but not necessarily the best protection for your product.

Do I Need to Patent That?

Begin with your product requirements document (PRD). It describes the features and specifications that define your product. You will be counting on these features to set you apart from the competition. You should be sure that as many as possible are covered by your patents.

Examine each item carefully. Ask yourself, “How are we going to achieve this?” The answers will lead to an outline of potential patent claims to protect those key elements. Compare the outline to your existing portfolio. Are these claims present in existing applications? Will you need to file more applications?

If you are in the early stages of product development, you probably don’t have solutions to all of the requirements in your PRD. Presumably you have a development timeline leading to the solutions. Add IP milestones to the development timeline.

Examine the PRD again. Ask yourself, “How might our competitors achieve these or equivalent features and specifications?” The answers will help define the defensive elements of your portfolio. You should identify what additional data may be required to support defensive claims and, if possible, build the measurements into your development timeline. While IP does not drive R&D activities, it is certainly easier to gather a little additional information along the way than it is to back track later on.

Build a Timeline

Well, actually two timelines: one for when you plan to file additional applications, and the second for when they will expire.

The timeline for filing applications becomes part of your development timeline and needs to be carefully reviewed as shifts occur in development. Revisit this timeline frequently in project planning meetings.

The second timeline addresses loss of exclusivity. For many products, the length of exclusivity will be a key factor in recovering your investment in development. This is especially true in the life sciences sectors. For products with shorter lifecycles, exclusivity is still important, but mostly for the core technologies, and perhaps less so for ancillary features.

Finally, overlay the patent expiration data you have been gathering for your competitors’ products. You will gain an appreciation for how you will measure up against them later in the lifecycle of your product.

How Much Is This Going To Cost?

I have yet to meet a company with a budget large enough to patent everything they see as potentially important. Nevertheless, the above exercise will allow you to make intelligent decisions to prioritize the applications you file and the expenditures you make. And, just maybe, you won’t feel grilled by the board.

Need help with your IP Plan?   Contact me.

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This type of analysis has been successfully applied in a wide range of situations. Application to an IP portfolio is one step in developing an IP strategic plan.

A knowledgeable, unbiased facilitator working with the scientific and business leadership of the company is needed to perform SWOT analyses. Such an individual will be able to probe areas from a fresh perspective often unavailable to members of the company who are too close to the product or research.

The analysis starts as a chart with four quadrants, each representing one of the categories of SWOT. Within each quadrant, the facilitator will pose a series of questions. The exact nature of the questions will depend upon the product and stage of development. An example for a mid- to late-stage product is shown below. This is only an example and contains only some the questions that could be applied to each category.

Putting the Answers to Work

The information developed from the SWOT analysis is used to prepare IP strategic plans to maximize your strengths and opportunities. Analysis of the weakness and threats helps you articulate IP risk management plans.

A SWOT analysis can be a versatile element in your IP protection toolbox. But it has drawbacks as well. An incomplete exercise could result in non-prioritized lists of things to do rather than bringing focus to critical objectives. Further, without an unbiased approach, individuals may tend to balance strong threats with weak opportunities.

Conclusion

A robust IP program is supported by well-articulated IP strategic plans. This article has presented one tool to assist with the valuation of your patents, applications, and portfolio. Contact me for assistance with this and other IP issues.

Charting Patent Expirations

In Part 1 I showed how to identify competitors and the key patents they rely upon for exclusivity. The first step to positioning your IP is to know where you currently stand in relation to those patents.

Make a chart of the dates when each of the key competitor patents will expire. Next, overlay the expiry dates of your product or technology patents. Now analyze the results.

Analyzing the Results

In many new technological areas, the expiration of key patents will occur in a relatively narrow time frame, often within a few years of each other. This is because companies seem to enter the field at about the same time. If this is the case, you will be competing head-to-head until expiry comes. After that, your branding will be the major force to promote your product.

On the other hand, what if there is a distinct gap between your exclusivity and that of your competitor(s)? In those cases you will have several important questions to consider.

If a competitor loses exclusivity first, will the availability of the once patented technology open the way for lower cost versions that perform similarly to your product? If so, will you be able to demonstrate a competitive advantage over the now more affordable alternatives?

If your exclusivity is going to expire before your competitors’, will the availability of your technological advances give them an edge for their products that you are not prepared to overcome? Will you be able to lower your costs to compete with imitation or generic versions of your product?

Conclusion

Understanding the relative timing of patent expiration dates is not only essential to formulating a business plan for post patent expiration, it is essential in the earliest stages of product development, when you are forming your product requirements document. Even before you begin actual product development, you should be able to estimate when you will launch your product and when you will lose exclusivity. Looking ahead to those dates, envision the requirements needed to make your product stand ahead of the competitive products you have identified during the time it will be on the market. Efforts in this area will ensure success in the marketplace.

Contact me for assistance with this or other IP Portfolio Management issues.

In this installment, I show you how to do some of this competitive intelligence on your own. And, you can do it using free, on-line databases. Once you see the benefits, you can then decide whether to allocate funds for external support of this valuable information-gathering function. In Part 2, I’ll show you how use IP positioning to maximize your competitive edge.

Tracking Patent Applications

You probably already know who your major competitors are. Searching for and reading their patent applications and journal articles is something you should be doing.

Yet sometimes it’s the smaller company that hasn’t quite made a presence for itself that represents the biggest threat to your development work. How then do you find that company and learn about its work?

The trick is crafting a search that narrowly finds the technology of interest. Here’s how: Search for a patent or two that is in the area of your work; the closer the better. Perhaps it’s your own published application or one from a known competitor. Look for the US or International Classifications on the face of the document. Combine those classifications with descriptive search terms, and then execute another search. Look for the key inventors and assignees in the results, and search yet again on those specific inventor names and company names.

Some Words of Caution – Rule 56

When you file a patent application, US law requires that you disclose any information that may be material to patentability. Performing searches will undoubtedly turn up references of interest. Before you start searching, discuss with your IP counsel how you will handle the results, should they be closely related to your work. Failure to disclose certain references could put your IP rights in jeopardy.

Monitoring Trademark Applications

This is very powerful for some areas of development. Companies are allowed to file for trademark approval in the US before they actually use the mark in commerce. The application is made with intent-to-use and can be filed up to 3 years ahead of the actual use without any loss of priority. Some companies apply even earlier.

Monitoring the trademark application activity of a competitor will provide insights into their new product activities because a description of the goods or services must be provided with the application. And, while an applicant can start with a broad description and narrow it later, careful reading may allow identification of the newer goods or services.

Perform searches on the mark holder using your list of companies from the patent searches.

You should also perform searches on the description of goods and services field by specifying the same goods or services you are developing. You might discover additional companies to examine for patent activity. Cross check this list against the one developed from your patent search, and you will have a comprehensive picture of active competitors.

Conclusion

After a few rounds of searching, you will develop a refined, targeted search that will alert you to competitor activity. In as little as 30 minutes a week, you’ll be up to date on new developments that may have gone unnoticed.

Know your competitors’ IP
You can’t compete today without tracking the activities of your competitors. It’s the only way to know that you are really out in front. So, while you naturally read all of their scientific literature, are you also tracking their IP activities? There is a lot of competitive intelligence to be gained by monitoring patent and trademark applications.

Understand the real value of your IP
IP valuation is a complicated area. There are various complex mathematical and computer models that purport to assign scores to patents based on an analysis of the claims. This is not the valuation process I am referring to here, because for the most part, as a startup, you probably have more pending applications than issued patents, and it is likely that you will derive little added information from a complex model. For you, understanding the value of your IP consists of knowing the strengths and weaknesses of each application and understanding the opportunities and threats presented by your competitors’ IP. Using that information you can begin to craft a viable strategy to maximize your IP protection and value.

Have a plan
Many companies take a throw-it-over-the-wall approach to getting their patent applications filed and prosecuted. An exciting new finding comes out of research, and you decide to file an application. More findings… more applications…  The cycle is clear, but each application tends to be independent, disconnected, and not necessarily focused on the ultimate product of the company. In the end, you have many patents but inadequate product protection. Break this cycle; work from your product requirements document to plan the necessary patent coverage that will ensure exclusivity for your product.

Decide who is in charge of IP and empower them
Is IP an internal function or is it outsourced? If it is internal, what other, more pressing responsibilities does that that person have? And, does the individual have a solid background in IP? If it is outsourced, how are you managing it? You still need someone in house to manage the outsourced activities, especially when using outside counsel. And, while it may seem as if hiring a consultant to assist with in-house matters will put a strain on your budget, it can actually decrease your overall costs by having focused expertise available to you.

Execute the plan
Once you have a plan in place, you need to execute it. You also need to revisit it frequently because modifications, changes, and delays arise in R&D or product development. This loops back to the first question, “Who is in charge of IP in your company?”

Pay attention to your IP
Put IP on the project team meeting agendas. Identify and address potential issues as they arise so corrective action can be taken before it’s too late. Review your portfolio on a regular basis. You will actually save money by abandoning patents and applications that no longer apply to the product or technology you are developing. If you think the IP may have value to someone else, consider licensing it or selling it outright.

Prepare for product launch – That’s where the money is
Congratulations!  You are ready to launch your product.  You will need to be sure you have completed your FTO or clearance study.  Ensure you product is labeled with the appropriate patent numbers, and get ready to file the Statements of Use for your trademark applications.  Also, now is the time to draw up your IP risk mitigation plan.

Prepare for diligence – There’s money there, too
Finally, if you are a startup or midsize company, you may be looking for partnering or buyout opportunities. When they present, the timeline is quite fast. You can facilitate the process by having your IP in order ahead of time. A potential partner will be impressed that you have handled your IP so carefully. If you have IP issues, preparing a risk management plan in advance certainly helps smooth the pathway to closing the deal. Remember, the other party will dig up the risks, so it is to your advantage to be ready and upfront about how to deal with them.

Conclusion
A massive IP budget is not needed to get the most out of your portfolio. Careful planning and expert assistance from others will get you there. In future articles, I will delve into more detail around each of the above topics. The goal will be to have your IP performing like the big guys’. In the meantime, if you have more immediate needs, Greenspan IP Management will help solve them. Call or email me.
(858) 442-8152 • bernie@GreenspanIP.com