For SMEs, protecting intellectual assets can be problematic even in their home markets. As well as the cost, there are issues with identifying the ‘right’ level of protection and what to do should IP rights appear to be infringed.
Once overseas and emerging markets enter the equation, matters become even more complex and expensive. In this article, I’ll look at simple actions that can help a company develop a cost-effective patent strategy.
The patenting system has many fixed-length and variable-length delays between the initial filing and the grant of a patent in a particular geography. These delays provide advantages in identifying what to pursue, where to pursue it and cost management.
So how best to use these delays to reduce both cost and risk? For SMEs, we suggest filing an initial patent application in their national patent office as late as possible, typically close to any product’s launch date. This gives the greatest flexibility when choosing international geographies.
It does carry the risk that a competitor may be able to file in the same area beforehand, and this should be borne in mind in areas where there is much competition (early filing is recommended in such cases).
With the initial application filed and before the first anniversary, this application should be modified to add supporting detail to strengthen the application; claims will also need to be added to fully define the coverage of the patent. There is also the possibility of generating related patent applications for wholly new material.
Once claims are added and the application finalised, it should be carried forward into a PCT application. A PCT application is a single international patent application that can be carried forward to most geographies around the world and with PCT applications the final choice of geographies does not need to be made until 18 months after the application has been filed.
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Companies should use this time to determine which markets will offer the most revenues for the new product and pursue patents in only the potentially profitable geographies. Long-term decisions need to be made based around the lifetime of the product, the lifetime of the patent (typically 20 years) and which geographical markets are going to be most important in this time.
SMEs can find enforcement of patent rights a challenge. Typically, there are two main ways of enforcing patent rights: negotiated exchanges or patent litigation. Both methods require the engagement of lawyers but litigation is much more expensive than negotiation and should only be used once negotiation has failed.
Historically, litigation has been too expensive for SMEs which gives large corporations an advantage when SMEs try to enforce their patent rights. Whilst there is some indication that the patenting system may change to make patent enforcement easier for SMEs, there are two recent options that may provide assistance.
The first option is through the use of ‘no win, no fee’ legal support – such companies assess whether there is a valid case to be made and, if there is, seek to enforce the patent rights and claim damages, taking a proportion of the damages as their fee. The second option is through patent enforcement insurance, although care should be taken when selecting these insurance products as they may be limited by geography and may not cover enforcement in emerging markets.
Despite the current economic conditions, companies should prepare for a recovery, be this in traditional markets or emerging markets.
Such preparation must include securing IP rights in markets based on current and predicted value and ensuring that these rights are enforced accordingly. Done correctly, both cost and risk can be reduced and valuable lines of business can be comprehensively protected.
Related: Patent risk: understanding the best way to deal with it – patent attorney Peter Arrowsmith discusses why you should be careful when applying for a patent in your business.