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Preparing an effective Intellectual Property Exploitation and Protection Strategy

Recommendations and common mistakes

When innovating, intelligence and creativity are put to work to develop a new solution for an existing problem. The fact that the inventor should receive benefits as result of the implementation of the innovation has never been questioned. The problem is how to assure this. The foundation of any innovation is basically knowledge, and unfortunately the only real way to assure that knowledge remains of one’s own is keeping the secret. But do we really want that? The answer is clearly, No.

Keeping the secret may prevent inventions from becoming innovations as, if they are not disclosed to others, they risk not going forward as a consequence of restricting the sourcing of new ideas and collaborations. Additionally, how do you inform about the benefits of an invention to a potential buyer without disclosing the rationale and basements that underpin it? 

This, which might sound initially as a trivial or silly issue, was studied by 1972 Nobel prize winner Kenneth Arrow (1921-2017) and is known today as the “Arrow Information Paradox”. Arrow concludes that this paradox is the basis for an existing market failure in innovation, and the reason for which Governments that foster innovation must build sounding patent regulations to assure that they can be disseminated without inventors losing their rights over them, as a relevant incentive for creativity. 

“Invention Patents” are legal mechanisms that prevent losing the rights over the inventions when knowledge is disclosed. Invention patents are also property titles with intrinsic market value that allow recovering the costs incurred in the development of the inventions (R&D&I). The law regulates the rights over the patents, not over the inventions. Actually, the word invention has no legal definition, and is commonly understood as the materialization of an idea in a prototype that can be converted into an innovation to be used by people, a quite imprecise concept.

Why is it important to have an intellectual property exploitation and dissemination strategy?

The first reason is because our innovation process evolves resulting in new knowledge accumulation added to existing patents, creating patent families or new patents. Patents have tangible market value with potential to increase if they are correctly managed; either sold, licensed, or they can be kept assuring the patent holders’ sole rights to manufacture, sell, use, import or export the product or procedure in the territory where it has been granted.

Having a clear intellectual property exploitation and dissemination strategy should prevent us from incurring in the following four (4) most frequent mistakes:

1. Commercializing and disseminating before patenting

There are three (3) simultaneous necessary conditions for an invention to be patented:

  1. Novelty: The invention is not included in the state of the art at world scale
  2. Inventive activity: The invention is not an evident result of the state of the art for an expert in the field.
  3. Industrial Application: It can be used in any kind of industry, including agriculture.

The first and second conditions mean that an invention described in a commercial or academic article, presented in a commercial fair, or detailed in a commercial brochure automatically becomes part of the state of the art, and therefore loses any chance of patentability. 

It is understandable that an Academic would like to announce his discoveries, but then he must be clear that whatever is revealed in the article will not be considered as novel or a result of an inventive activity after its publication. Often there is a misunderstanding at this point between patent rights and copyrights. Publishing an article under copyright regulations only prevents anyone from copying and distributing the article itself, but it confers no protection on the knowledge and information in it. The knowledge, as pointed earlier, by nature is free and not proprietary.

On the other hand, often we will require collaboration with partners, to whom we need to transfer documents and information. In that case, if strictly required, no information should be provided unless it is under a strict confidentiality agreement, including clear obligations, precise description between what is confidential information and not, and statements on legal consequences in case of breach of contract.

2. Thinking that what one doesn’t know, just doesn’t exist

Novelty outreach is worldwide. To make it clear, a patent granted in the USA does not confer exclusivity in Japan, but it is not patentable in Japan or anywhere else because of lack of Novelty.

Another related issue is that holding a patent does not guarantee the non-infringement of rights of others over their patents. In other words, your strategy must assure that you have the so-called “Freedom to Operate” (FtO) in order not to be in conflict with anybody else. Patent conflicts may be lengthy in time, costly, consume management attention, and often result in a certain loss of image for the parts, so it is also worthwhile to perform a duly FtO search study that will provide you relevant information before or during the process of you filing a patent.

3. Not defining an IP geographic deployment strategy aligned and synchronized with the commercial deployment strategy

It is important to be efficient in the expenditure and time consumed filing and following up patent applications for each and every country where youwant to be present. Your IP strategy must focus on the countries in which yousee the greatest sales potential and where your competitive advantages are most likely to be effective. Therefore, it should be also aligned with your market deployment strategy. Many companies fail at evaluating country market potentials as well as overestimate their competitive advantages, not considering the existing inertias that impede demand to change faster to new and better products. 

If you are only going to work at national level you can apply for one sole national patent. If you plan to be active in a region, such as Europe, the best is to go for a European patent (See European Patent office (EPO)). If you want a world patent you can apply through the World Patent Office (WPO) with only one application and later select the specific countries where you want the exclusivity. Finally, it is also possible to apply for international patents through each national office under the Patents Collaboration Treaty (PCT, Washington, June 19, 1979).

4. Keeping the secret

Actually, this is the worst IP strategy possible -in the long term-. It limits the possibility of sharing information, and always under the fragile umbrella of a case-by-case confidentiality agreement which cannot be repeated too often as there is risk of losing control of where the leak came from. Keeping the secret reveals a certain lack of confidence on the patentability of the product and the expectations on its intrinsic market value. 

Read more:

The role of patenting in start-up fundraising

Is licensing the best business model for your start-up?

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