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5 Misconceptions Executives and Engineers Have about Patents
Steven G. Saunders, Co-Chair Intellectual Property Department/ Patent Attorney, Nutter
“Patents do nothing for you.”
“I need a huge patent portfolio to defend against fakes and trolls.”
After decades as both a patent attorney and angel investor, I’ve heard it all. A few sticks in my craw. Five of my favorites follow.
1. I have a patent so that I can sell the product.
No! Patents give their owner only one thing—the right to stop others from making, using, or selling what is patented. They have nothing to do with whether the patent owner can sell a product. All of the same usual obstacles still stand in the way of a sale, such as government approval (e.g., a medical device requiring FDA approval), competitive pressures, and…other patents. Yes, another person may own a patent that covers some aspect of the product you want to sell.
2. A patent is a technical document.
Quite to the contrary, a patent is a business document. Why are we patenting an invention? Short answer: to make money. Effective patent coverage requires careful and primary attention to business. This demands many questions: What is the business model? How do you plan on commercializing this technology? Who are your customers? What are your business goals?
All good patent lawyers can understand and apply the technology to the business goals. If they can’t, they will speak up. A quick result: When looking for the right patent attorney, technical skill is essential, but don’t lose sight of the attorney’s business insight and experience. Careful consideration of business strategy is key to ensuring a patent has value.
3. Never search before filing a patent application. It is dangerous.
This one hurts when I hear it. Generally, a patent owner is entitled to significantly more damages if an infringer knew about their patent and then went ahead to infringe it anyway willfully.
Careful consideration of business strategy is key to ensuring a patent has value
Until about a decade ago, this advice almost made sense (I still was against it!). Around that time, however, two significant changes happened. The Supreme Court made it a lot more challenging to prove willful infringement, and then they made it harder to obtain a patent when some similar technology pre-dates an invention in a patent application. If someone tells you not to search, DON’T LISTEN! Instead, seek to see what others have done.
Information is power! It will make your patent stronger and enable better decision-making. If you find something close to what you want to protect, then you can make critical decisions immediately (e.g., drop it altogether, switch the business strategy, or aim the patent application in another direction). This is a much more savvy option than waiting years and tens of thousands of dollars into the US and international patent process only to find something that short circuits the entire effort. And, as I mentioned, with reasonable care, that potential patent applicant can still avoid the problem of the willful damage when they start commercializing the patented technology.
4. Software is not patentable.
I’ve heard this tossed around for decades. When I was a law student, someone gave me this advice and, of course, I naively believed it. At my next interview, I confidently declared this as a fact…only for the interviewing attorney to say, “Oh really. If that were the case, I wouldn’t have a job right now.” The software has been a controversial subject as long as I’ve been a patent practitioner, and the standards seem to change with some regularity. Right now, a lot of software patents (i.e., the processes that are implemented in software) may be in jeopardy, but many are just beautiful. The more technical the idea, the more likely it can be patented. When I teach classes and advise clients about patents, I like to say it this way: “Software is not patentable.” The devil is in the details.
5. My technology is provisionally patented.
This one makes me laugh almost every time. I hear it most often when I listen to startups pitch for investments from my angel groups. The funny part is that quite a few unaware investors buy this line. In short, a provisional application is not a patent—it is an early part of the process for applying for a patent. A provisional application gives its owner a first date of filing for the technology, and the right to try to obtain their patent rights within one year of that first date. That’s all. The technology still must undergo the rigor of the complete patent process.
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Steven G. Saunders is a partner and co-chair of Nutter’s Intellectual Property Department. Clients of all sizes, from emerging companies to multinational corporations, rely on Steven’s counsel for managing all of their intellectual property needs, including IP portfolio development, strategy, and evaluation, patent preparation and prosecution, product clearance, inter partes reviews (IPRs), litigation management, reexamination, and licensing. Drawing on his experience as both IP counsel and angel investor, Steven also conducts due diligence analysis in preparation of angel or venture capital investments, mergers, or acquisitions.