Creating a winning patent strategy from the ground up

To some finding an appropriate patent strategy is as simple as searching for the winning scores of last night’s baseball game. All you have to do is hire a patent attorney – any patent attorney will do. Provide your patent attorney with vague, generalized information regarding the technology. Tell the patent attorney to draft a patent application that broadly covers the entire industry in question. Pay the fees due to the attorney and to the United States Patent and Trademark Office (USPTO).  It doesn’t get any more complicated than that. Patent strategy completed.

If only it were that easy!

A linear approach to protecting technology as set forth above is certainly one option, but an option that will at best lead to haphazard creation and identification of intellectual property assets.  At worst, no patent will ever be obtained and you will be left scratching your head, confused as to how your plan went awry.

Anyone who reads press releases or financial news can attest to the fact that companies, both big and small, repeatedly talk of developing a patent strategy for the twenty-first century that will enable them to compete in the global market place and take advantage of existing synergies and ongoing alliances in a manner that will create shareholder value and bring new technologies to market.

All of the talk of synergies, alliances, and shareholder value sounds good, but what does it mean?  Truthfully, this seems to be code for “we don’t really have a clue but want to make it sound like we know what we are doing.”

Unfortunately, little is ever done to figure out what all this actually means.  Perhaps this is because the very nature of preparing a patent strategy is something that requires both understanding of the patent laws and a healthy understanding of the business realities of evolving technologies. In order to plot a course calculated to succeed company leaders need to be cognizant of the actual business realities facing the company, not the talking points of lobbyists or those who write SEC filings or those who get paid to write press releases.  Indeed, a comprehensive understanding of your own research and development, as well as where the industry is heading, is crucial when attempting to create the patent strategy that has any chance of succeeding.

Prior to even considering a patent strategy it is first important for a company to take an introspective look at its own business, including goals for the future, client needs, core competence and existing research and development.  Once the internal review is completed it is necessary to engage in market analysis, focusing on competitors, business opportunities, alliances and industry realities.  Only after a thorough internal and external review do you have any chance of pursuing a winning strategy. After all, a patent is a business asset that can be used to facilitate success. Getting a patent in and of itself is not the goal. Getting a patent is easy if all you want to do is get any patent. Getting a commercially useful patent that can meaningfully be leveraged to enhance the potential for business success is far more difficult. Impossible if you don’t set out from the start with an overall plan for success.

First, allow me to acknowledge that there will be some who will disagree with my previous statement, likely saying: “We succeeded and never engaged in any kind of review or audit as you suggest.”  That is, of course, possible.  Like a blind squirrel finding a nut every once in a while, or the United States Supreme Court getting a patent case correct, the unexpected and near impossible can and does happen from time to time.  Developing a winning strategy, however, will not rely upon luck, good fortune, leprechauns, horse-shoes or the foot of a rabbit.  Frankly, the foot wasn’t so lucky for the rabbit, was it? Superstition is fine if you are an athlete who needs confidence to engage a repetitive task expertly, but for businesses those that prevail most often will do so because they have implemented systems and processes that are likely to lead to a desired result.

[Varsity-1]

Charting a Path for Success

So how exactly do you develop a winning patent strategy?  Here are some things you need to know to maximize your chance of success.

1. Engineering for the Human Element

Engineers inherently know what many other scientists and business people seem to forget, or discount.  Mr. Murphy of Murphy’s Law fame was absolutely accurate.  Whatever can go wrong will go wrong.  Murphy’s Law is so prophetic because of the human element.  Allow me to explain.

The major difference between many computer programmers and most computer/system engineers is that a computer programmer will frequently code software so that it works.  The computer/systems engineer, however, knows that the software needs to be coded so that anyone can operate it without crashing the system.

Most people who use software will not be experts or even knowledgeable about the intricacies of what goes on under the hood, so to speak.  Software needs to be capable of any number of user mistakes without frying the computer or melting down the system. If you do not take the human element into consideration the system created will not be robust enough to actually be used in a commercial setting.

Similarly, any patent strategy needs to be capable of withstanding user error.  There will be times when management on various levels fail to green-light a project to the next level when that project could have been an enormous success.  There will also be situations where projects will be green-lighted to the next level when they should have been weeded out and not pursued.  Establishing clear criteria, as well as creating checks and balances, are essential.  You need to make sure that the human element doesn’t crash opportunity or suck up valuable resources.  You also need to make sure that creativity and ingenuity is rewarded and not stifled.

2. Training and IP Audits

It is always amazing to me how so many independent inventors can convince themselves that extremely ordinary things are patentable and will make them rich.  It is even more baffling to me that many professional inventors at corporations and universities think that what they have developed isn’t really innovative or worth pursuing.  It seems that in the corporate innovation world many professional inventors think that if they came up with it then it couldn’t really be a patentable innovation.  These corporate inventors are frequently their own “obviousness filter” and in many cases their own filter is much more strict than even the Supreme Court’s restrictive views on the matter.

It is essential to create routine training for first line scientists and engineers so that they can understand the patentability requirements.  If these professional inventors are allowed to have a skewed view of what is what is considered non-obvious, for example, then they are going to overlook many opportunities to patent what the company is investing in.  Similarly, first line and upstream management needs training, but of a different sort.  These managers are the choke point of innovation and will weed out things that can and should be pursued while approving things that should be scrapped.  You cannot expect perfection, but understanding the business of innovation and financial aspects of patents should improve decision-making.

Bringing in a patent attorney or law firm to conduct an audit to see what your people are missing that could be patented is definitely a good idea, and one that always uncovers assets previously unknown.

3. Learning from Success

One of the things that drives me nuts is the anti-patent mantra that suggests that patents are not really necessary.  I could call such a position many things, but for now let’s just call it recklessly naive.

Those who do not know history are doomed to repeat it, and those who refuse to imitate successful companies are doomed to an uphill struggle.  Of course, success can be lucky, but that doesn’t mean you should rely on luck as a strategy.  So when seeking to learn lessons and imitate others you should consider looking at those companies that have been market dominant for a very long time.

For example, IBM spends nearly $6 billion annually on research and development and has spent a generation as the top patenting company in the world.  See IBM’s Formula for Success: Patents, Patents and more Patents. So why doesn’t the entire industry learn from the IBM example and seek to duplicate it?  I’ve previously put that question to Manny Schecter, who is Chief Patent Counsel for IBM. Without missing a beat Schecter told me: “I don’t worry about what others are doing.”  Like a runner at the front of the race who knows they have the stamina and speed to win, IBM doesn’t look back, they just keep on keeping on, confident that they will succeed.  Explaining this confidence Schecter went on to say: “I suspect our business executives are more in tune with our IP strategy than with some of our competitors.  We also outspend our competitors in terms of research & development.”  Indeed, there is no substitute for top-level leaders understanding IP strategy, and it is certainly true that the more you look the more you find.  That is why I have never understood why in troubled times companies cut research and development, as if that will lead to greater innovation.

Conclusion

The morale of the story is this: Anything worthwhile is not easy, and pretending that something as complicated as a winning patent strategy will just fall into place is merely a fairy tale.  Providing your creative employees and business managers with training to identify patentable assets will pay dividends, as will periodically having a patent attorney or firm conduct an audit to identify what might otherwise fall through the cracks.  Of course, none of this matters without a commitment to excellence, which requires appropriate R&D spending and a progressive and non-apologetic patent procurement strategy.