How do you decide whether to file a patent application?

How do you decide whether to file a patent application?

Patents protect new and inventive technical innovations. In this article I set out what I recommend as a good decision-making process for determining whether to file a patent application.

1.     Start with a clean sheet

There is a lot of conflicting advice about patents in circulation, some of which is wrong or based on anecdotal evidence from what happened in the past to individual companies in individual industries. It is better to make your own decisions systematically based on your own commercial context here and now; the structured approach set out below should assist you.

2.     Write down what you have developed which may be new

Write down/type up ideas for technical products and processes which you believe might be new in some way. Don’t worry about whether these innovations are inventive (in the legal sense) at this stage. It is useful for any business to have an organised process for documenting and cataloguing innovations, for example in the form of numbered invention disclosures, or an intellectual asset register.

3.     Consider which of these innovations may be commercially important

At this stage, there is no need to consider whether the innovations are commercially important specifically to you and specifically right now. Are they potentially commercially important? If so, to whom? To you, now? In 5 years’ time? To another company who you might partner with, or who you may license the innovation to, or who might acquire you in the future?

4.     Consider what scope of patent protection might be obtained for the ideas

Now you need to consider what might be inventive and potentially patentable. It is best to involve a patent attorney at this stage as even experienced users of the patent system find it difficult to accurately assess what may be patentable and what claim scope might be achievable without patent attorney advice. You might already have a good knowledge of the field or carry out informal searching on patent databases (e.g. Espacenet), or you might ask a patent attorney to arrange searches for you.

5.     Consider whether a patent would be enforceable in likely markets

It is usually possible to determine whether a patent is infringed and in any event there is some self-policing of patents as companies with sufficient resources will typically research and often avoid infringing third party rights. Potential competitors might never start to compete or fail to obtain funding or be delayed if their intended activities would infringe patents of which they are aware.

However, there are some limited categories of invention for which patents are very difficult to enforce or cannot cover what is commercially important. Examples include some processes for making products which are forensically indistinguishable from products made by known processes, computer-implemented inventions carried out in the cloud without leaving a detectable trace of the process, or patents for drug targets or drug-screening procedures which are unable to reach-through to protect as yet undiscovered chemical entities. If you think one of these categories may apply it is best to speak to a patent attorney before drawing a final conclusion.

6.     Consider the potential benefits of a patent application/patents

The most obvious benefit of a patent is that the proprietor can in principle prevent others from dealing in products or processes which fall within the scope of the patent, without their permission. This right might be useful to maintain a monopoly over a proposed product or process; it may be useful if your company intends to sell the product or process; it may be useful to future business partners, such as distributors; it may be useful to future acquirers of your company. Possession of a patent may reduce competition, or at least slow the competition down; it may encourage other companies to deal with you rather than compete against you.

There are however other possible benefits. For example you might obtain income from the sale or licensing of a patent; or you might obtain a reduction in corporation tax on profits under the UK Patent Box scheme (or similar schemes in some other countries). Furthermore, obtaining a patent can demonstrate that an idea is innovative.

For many early stage businesses, one main benefit of patent protection is that it can help to secure investment – or looking at it another way investment may be difficult to obtain without patent protection. Perhaps costs can be pushed over to investors - would you rather invest £1m in a company who were going to spend the £1m developing and launching a product that could be readily copied or £1.1m in a company which was going to spend £1m developing and launching the product and £100k ensuring it could not be copied?

If you think that you may obtain only very narrow patent protection, or protection which could be easily designed around by a careful competitor, it is worth considering whether a patent might anyway have some value, for example to stop close copies or counterfeits, to enable you to claim tax reductions under the Patent Box scheme or as a marketing tool.

7.     Consider the cost/time profile of the patent process

The total cost of obtaining a patent in multiple countries and paying renewal fees for the whole life of a patent can be high. Having said this, most of the cost is delayed, potentially for a long period of time. When you are deciding whether to protect a new product or service you only need to consider the costs of the earlier stages of the patent application process. Later, once you know how well the product or service is doing in the marketplace, you can assess whether or not to keep incurring costs.

8.     Reflect on the optionality of patent applications

If you file a patent application, then you have a continuing option to persevere with the application and obtain patent protection, provided that you have made an invention. For the first year you will usually have the option of filing corresponding applications in any of many territories around the world with a ‘priority claim’ from your first application. You always have the option as to whether to continue with the application procedure or whether to keep paying renewal fees for granted patents, or you can decide to stop the process to avoid further costs. But once you have disclosed an invention you can no longer patent it and you no longer have an option to protect the process.

9.     Put yourself in others’ shoes

Before reaching a final decision based on your own commercial context you might want to broaden your perspective by briefly thinking through how you would approach the decision and what decision you would reach if you were: (i) the in-house patent department of a multinational, (ii) a well-funded start-up in Silicon Valley or Shenzhen, or (iii) an investor. If you are about to reach a different decision to what they would do, why is that?

10.  Decide

Hopefully by the time you have been through the above procedural steps it will be clear to you whether or not to file a patent application. If the decision remains unclear, then it is worth reflecting on point 8 above (optionality). If you do decide to file a patent application then you will then need to consider what you need to do, and when, but these are separate topics in their own right which we are happy to discuss on request.

11.  If you decide not to file a patent application…

Sometimes you will reach an uncomfortable situation where you don’t want to protect an innovation but are concerned that others might patent it and present you with a freedom to operate problem in the future. In this case you need to think about publishing the information for defensive purposes, whether somewhere that is easy to find or somewhere that is difficult to find. Whether and how to do this is a separate topic.

I am happy to discuss the issues in this article.

Author: Alistair Hindle, European Patent Attorney and Chartered Patent and Trade Mark Attorney

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Any questions?

If you would like to discuss the issues raised above, please get in touch.