As a long time patent prosecutor who more recently transitioned full-time into patent litigation, I have the unique benefit of appreciating the value of a patent portfolio from different perspectives. While many clients understand the importance of investing in good patent prosecution strategies, they often struggle to determine what to do once prosecution is over and their patent (or patents) have been granted. Obtaining a patent can indeed be a costly venture, and clients are often left questioning how they can potentially monetize or earn a return on their investment. To answer that question, however, it is important to first understand what exactly these patents mean to the patent owner. For some, a patent may merely be a conversational wall hanging that celebrates their accomplishment of being granted a patent and succeeding as an inventor. Yet for others, a patent may be an extremely valuable asset that is crucial to assuring they maintain a competitive edge and a strong market position within a specific technological field or industry. If the goal is the latter, understanding available options of how best to utilize a patent portfolio post grant (i.e., once the patent application has issued into a patent) is imperative. While there are several ways that a company might offensively and/or defensively utilize its patent portfolio after prosecution is terminated, in this article, we will explore "the second life of a patent" and discuss how these strategic options can serve as essential tools for not only protecting innovation, but also for establishing and maintaining a competitive market share within the relevant field of practice.
What Statutory Rights Are Conferred by a Patent and How Do You Properly "Set Your Fence"
Over the years as a patent prosecutor, I have been asked by several clients about what rights they will receive if granted one or more patents covering their invention. Understandably, many inventors believe that obtaining a patent will proactively give them the right to, among other things, make, use, or sell their own invention – however, this is actually backwards reasoning. Instead, a patent gives its owner the right to exclude others from making, using, offering for sale, selling, or importing their invention into the United States. Said differently, in exchange for telling the world all about your invention, the United States Patent and Trademark Office will grant the patent owner a limited-term monopoly during the enforceable term of the patent. The purpose behind bestowing this monopoly on inventors is to promote innovation and to thereby encourage others to improve upon the patented invention such that these improvements further advance the fields of science, technology, and medicine.
In addition to these statutory rights, it is also important to understand that the strength of a patent is directly related to what is "claimed" to be the invention within the patent. Much like mapping the boundary lines of a piece of real estate, the claims at the end of a patent also determine the "metes and bounds" of what encompasses the scope of a claimed invention. I once heard an analogy that patent protection is much like constructing a fence around a home, where the home serves as the inventive concept that is in need of patent protection. If the fence is placed too far out such that it falls on the neighboring properties, then the claim scope being sought may be too broad in nature, thereby resulting in potential patentability hurdles from other relevant inventions and prior art. Likewise, if the fence is placed right up against the home, then the claim scope may be too narrow, such that others can easily walk on your (intellectual) property by designing around the claimed invention without risking infringement. The key is to "set your fence" such that the claimed invention protects your invention as broadly as possible, yet without encountering unnecessary prior art or invalidity challenges.
My Patent Portfolio Is Strong and My Fence Is Set, Now What?
Once a patent owner successfully builds its patent portfolio, now its "second life" can truly begin. But, what exactly should a patent owner do to adequately take advantage of all the statutory rights it has received in exchange for being granted these patents? One strategic option is to begin carefully monitoring the products of competitors to determine if any of these competing products read on one or more of the patents. If a potential infringement is suspected, the patent owner can take a variety of steps to safeguard its competitive edge through its patent monopoly. The specific strategic approach that is utilized when safeguarding its competitive edge will largely be influenced by how aggressive the patent owner wants to be. This can range from merely sending an informative letter to kindly put competitors on notice that the patent owner holds enforceable patents relevant to their competing products, to sending a more pointed cease and desist letter asking the competitor for guarantees that it will take active steps to remove the infringing product(s) from the market. Either approach can also be supplemented with offers to license the patent(s) to the competitor in exchange for a royalty payment that grants the competitor the legal right to use the patented invention.
While a patent license royalty may be enough in certain circumstances to account for any damages caused by the infringing acts of a competitor, in other instances, a more aggressive approach may be warranted, whereby enforcement of the patent or patents through litigation may be considered. Litigation can be one of the most effective ways to stop infringement and prevent market share erosion, while still protecting the exclusive rights to a patented invention. However, litigation does not come without risks, particularly as the two defenses that any defendant will surely raise throughout the course of the litigation are non-infringement and invalidity. As such, it is important to thoroughly analyze the strength of the patent infringement case with your patent counsel in advance of filing a lawsuit so that it can be determined how vulnerable the patents are to such anticipated defenses. This brings us back to assuring that our claim scope fence has been properly set such that any associated risks that the asserted patents will be invalidated throughout the course of the litigation in light of the known prior art are clearly understood.
Strengthening the Patent Portfolio for the Future and Creating a "Moving Target"
In addition to enforcement and licensing opportunities, it is also wise to consider using more defensive strategies to further strengthen a patent portfolio. While engaging in patent litigation can serve as a means of fortifying a company's patent portfolio, as well as a means for sending a clear message to competitors that the patent owner takes its intellectual property seriously, creating a moving target around the patented invention can also serve as a valuable tool. But, what is meant by creating a "moving target" around the patented invention? As explained above, while the scope of coverage afforded to a patent is determined by its claims, it is also possible to file one or more continuation applications off of the original patent application before it issues into a patent in an attempt to protect the overall inventive concept from further perspectives. In other words, if the invention is described in various alternative embodiments throughout the application, if a competitor tries to escape liability from patent infringement by designing around the invention as originally claimed, it may be possible for the patent owner to actively amend the claims of the pending continuation application to once again read on the invention as claimed. As such, the patent owner has now created a moving target that makes it extremely difficult for a competitor to avoid infringement despite their efforts to design around the invention. This defensive approach gives patent owners negotiating power to potentially force their competitors out of the marketplace if no license arrangement can be reached.
Taft Takeaways
While patents can serve as valuable assets, this value does not come easily without first some strategic planning and financial investment. However, the life of a patent does not end once that patent has been granted. There are several things a patent owner can do to monetize its patent portfolio throughout its enforceable life, particularly if you have "set your fence" appropriately and created a "moving target" that keeps your competitors on the run. Of course, a patent can be a conversational wall hanging if that is all that is desired, but it too can be an effective sword that ensures that the patent owner maintains a competitive edge and a strong market position within its field of practice. To ensure that your patent portfolio does not just hang on the wall gathering dust, consider discussing these available options with your patent attorney. Together, you can customize a strategy that effectively utilizes your short-term patent monopoly, and ensures your business continues to dominate the marketplace and remains one step ahead of your competition.
In the next article in this series, Taft Patent Litigation attorneys will be diving into Strategic Considerations for Patent Litigation: Ensuring Freedom to Operate. Stay tuned!
Originally published in the March/April 2025 issue of the IP Litigator.
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.
