United States: Growing Pains: IP Strategies For Growth-Phase Companies

As your company grows and expands, it is critical to evaluate your intellectual property strategy, because what may have worked during the early stages may need to change. Securing IP rights can be expensive, so IP strategy for a startup is frequently dictated by limited resources and confined to filing a handful of patent applications covering some early technology.

Once your company has grown, a more finessed approach should emerge. As you are hiring great minds, developing new technology and launching new products — and as new competitors are emerging — your IP strategy needs to adapt.

A good place to start is to consider the following three questions: (1) How are you innovating? (2) How will you protect your innovations? (3) What are your competitors doing? The answers to these questions may change over time, but reviewing your answers regularly can reveal how your IP strategy should evolve along with your company and its business goals.

How are you innovating?

As your company grows, so does your number of inventions. There is new technology, new products, new features for existing products, and improvements of the technology developed during the early stages. But you can't protect any of these inventions if you don't know what they are.

A growing company should create an internal process for identifying innovations and evaluating them to determine whether protection is warranted. Identifying innovations may involve encouraging employees to report them, actively identifying innovations during technical meetings and reviews, and evaluating new products being developed to identify any new features or technology. Public recognition and financial awards can be used to incentivize disclosure and reporting.

An internal review committee can decide which of the identified inventions should be protected — for example, by filing for patent protection or taking steps to keep the invention a trade secret.

How will you protect your innovations?

What to protect

When there are many innovations, how should you decide which of them to protect through patents? This decision should be made in the context of your business goals. For each invention, you should consider whether a patent covering the invention adds value to your company. For example, a patent on a technology that is part of a current or future product may provide value as a barrier to entry to competitors. If excluding others from incorporating the technology into their products makes it harder for them to compete with your products, then patents should be strongly considered. A patent on a core technology, even if not yet part of any product, may attract investment or even an acquisition.

What about innovations relating to a technology that's not currently the focus of your company, with no immediate plans to include it in a product? Here, patenting may still add value, because the technology may become more important as your company grows; business goals and products change over time. Additional factors to consider include (1) detectability of the invention (if it is difficult to detect whether someone else is using the invention, you wouldn't know to enforce your patent even if you had one); (2) the cost and likelihood of obtaining a patent; (3) the amount of time and capital invested in developing the invention; and (4) the likelihood that others may be trying to develop and/or use the same technology, even if they are not your direct competitors.

Where to protect

After deciding to file a patent application, it is important to decide where to file it. Even for a growing company with a healthy IP budget, the cost of filing and, subsequently, prosecuting every patent application in multiple jurisdictions worldwide is prohibitively expensive. Yet some technology should be protected both at home and abroad. Deciding where to file patent applications is critical to ensuring that the protection you ultimately receive provides value and aligns with your business goals so that the expenses are warranted.

Although the simplicity of a fixed rule may be attractive (for example, always file in the U.S., Europe and Japan), deciding where to file on a case-by-case basis is a preferable approach because different jurisdictions may be relevant to different technologies, and different products have different markets. For each patent application covering a product, consider filing in countries where you are manufacturing that product, where you are selling the product, or where competitors may be doing so.

Also, an adaptive approach may reduce your costs. Spending less money on protection in countries where it is not as important to do so frees up resources to get the strongest protection possible for your most valuable IP in jurisdictions that matter.

When to protect

Since March 16, 2013, when the "first-to-file" provisions of the America Invents Act (AIA) went into effect, the first inventor to file a patent application in the patent office is entitled to patent protection. Though limited exceptions exist, patent applications should be filed promptly, as the current system is really a race to the patent office. You want to get there before any of your competitors.

In any event, you should file your patent applications before otherwise disclosing the technology. For example, you should file a patent application on an invention before telling anyone outside your company about the invention and before releasing a product that incorporates it. On the other hand, if a technology is not yet mature and there is much development yet to be done, it may be worth delaying filing until the technology is more fleshed out or filing a provisional application.

An additional consideration to keep in mind is whether to pay the patent office to expedite review of your patent application, which may be advisable for your most important technology and products. For a fee of about $2,000 to $4,000, the application will be examined within 3-4 months, on average. By contrast, without a request for expedited review, the application may not be examined for 18 months or longer.

What are your competitors doing?

When it comes to the IP rights of your competitors, what you don't know can hurt you. As your company brings new products to the marketplace, you should consider taking steps to ensure that doing so does not infringe on the patent rights of your competitors or other companies. Understanding what is in the patent portfolios of your competitors and the IP landscape in general is key to avoiding surprises and reducing risk when commercializing products. To this end, many companies perform so-called "freedom to operate" (FTO) studies with the goal of identifying any potential IP barriers to market entry and the associated risks of future litigation.

An FTO study may be narrowly focused on clearing a particular product about to be launched, and may involve analyzing a patent portfolio of a competitor or doing a targeted search to identify patents having claims that may cover the product. FTO studies of a wider scope may involve searching for and analyzing a broader group of patents and patent applications to identify potential risks at early stages of development. The analysis may include considering whether a patent is valid and whether your product may infringe on any of its claims.

Consider the identification of any potentially problematic IP as an opportunity to manage risk. Options for doing so include designing your product around the identified IP, purchasing the IP or licensing the IP.

Intellectual property strategy should serve your business goals and adapt to changes in your company. Re-evaluating your IP strategy periodically as your business grows is critical to the health and continued success of your business.

(as published by Business.com)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Matthew H. Grady
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.