TRICKS & TIPS FOR YOUR PATENTS
Undoubtedly, a patent portfolio is the best investment that a company should do and it takes time and money to achieve this important goal. However, only a strategic plan maximizing the efficiency of your patent portfolio will bring to your business the possibility to obtain a return of profits and consolidate your competitiveness in the market.
In order to consolidate an efficient patent portfolio, you must identify which patent assets represent a real value and which patent assets only generate a maintenance cost.
In order to determine which patents represent a real value, you need to focus on the following aspects:
Quality of the invention…
A patent exists because you have spent time and money in finding a solution or in finding a better solution to solve a problem related with your business. If you company owns a patent is because you are aware of the benefits of having found a solution to a problem with such invention and therefore, you have protected it and you have implemented it in your methods of productions and/or in your products, which indeed are generating an advantage in front of your competitors.
If your patents are in business, you should perform a market research in order to determine how well positioned are your patents in commerce. There is no value in an invention if it does not generate success in market.
Another issue is the relation between the life of the patent and the life of the invention in market. Therefore, the time that your patent will be profitable to your business is not related with the time of validity of the patent.
The advance of the technology is faster than ever before. New inventions are developed and launched daily and this situation makes difficult the survival of a patent in market.
Once you have developed a worthwhile idea, competitors will try to take advantage of it, even, by finding ways of innovate over your invention or finding ways for exploit the invention without the risk of being sued.
In order to avoid the losing of the advantage that your patents give you in market, always conduct prior art and trade searches in order to verify what your competitors are doing. This will give you the opportunity to evaluate your assets and the targets of your company, innovate over your patents in accordance to the market needs or tendencies and protect your innovations with new patents or with infringement actions against unfair competitors.
Remember that your innovations are the most valuable asset that your company may have. If your company bases its business in inventions, you are a target from your competitors. Therefore, always protect your inventions; first, by taking everything confidential while you are developing your idea and then, protecting your inventions as patents. In Mexico, our patent legal system is based under first to file basis, which allows any third party (even your workers, distributors, suppliers, etc.) to steal your ideas when they are in process, securing protection in their benefit and prove the contrary will turn into long litigations and expenses.
Take all the necessary steps to secure the quality of your inventions. If your patents represent an important source of profits to your business, protect them in order to give them their correct value in market since is the only way to keep the competitiveness and take actions in order to prevent the unauthorized use from others.
When your patent are close to lose their advantage in commerce, is the time to substitute them with new inventions, repeating the same steps of protection. If you take these actions as a regular rule for your company, you will have the security that your patents will keep your company on the top.
Quality of your protection…
A patent is an exclusive right granted by the State for 20 years to its owner. This gives you the exclusivity to exploit your invention in the market and prevent others from making, using or selling your invention during the patent’s life.
Not all the inventions are able to mature into patents, they need to be:
- New,
- Result of an inventive activity and,
- Obey to an industrial application.
Once you have conducted all the necessary searches[i] to determine that your invention is able to mature into patent, you need to focus on the documents and the information to protect it.
The quality of the invention needs to be secured by the high quality of the drafting of a patent application.
Your patent title is the sword which defends your inventions. If your patent title does not reflect what you have invented and is drafted without complying with the formalities established by law, probably you have a useless patent. Even more, probably you have an extraordinary invention but for not having complied with the formalities established by law, you are not able to secure legal protection for your invention, losing the exclusivity and the advantage in commerce.
The most common errors in drafting a patent are:
- The specifications and claims do not cover all the aspect of the invention.
- The claims have been narrowed in such way that is easily overcome by others through inventive steps around.
- The specifications are not clear and do not permit someone skilled in the art understand the invention.
- The claims are so general, that prior art easily invalidate the patent.
- The invention does not have industrial applicability since there are other easier ways to obtain the benefits of the invention.
A patent search is conducted through several databases (patents databases and literature available). Before initiate an inventive process, is advisable to conduct a patent search in order to determine if the problem has been resolved in the past and/or determine the strengths and weakness of the invention.
If your business is local, this is only in Mexico, you patent team shall know the law, the technical issues and familiarized with the criterion of the Mexican authorities in order to secure the correct protection of you invention. If your business is global, you need to understand that countries pursue different legal principles and rules in connection with the interpretation of patent claims.
In view of the above, you need to focus the drafting of the patent specification and claims in accordance to the rules that prevail in the national offices. Ask your agents abroad about your claims and the specifications of your patent and if it is necessary, amend the claims in accordance to the local practice.
Your patent protection shall obey to your business purposes. The patent rights are limited to the claims granted. Thus, your claims shall represent the value of your patent and their coverage shall give you the security to defend your inventions.
Enforcing your patent rights is expensive. If you do not have a robust protection in your patent, probably you will lose the litigation case and even, the patent rights.
It is true that some useless patents generate profits and are used as “scarecrows” against unfair competitors. The problem is when the patent faces litigation or is subject to a due diligence by third parties.
You need to be sure that your patents give you the opportunity to act free in business, without the risk of being sued by others. This fact depends of the quality of the protection you have and the researches you have done in order to determine the patentability of your invention.
If you are not sure about the strengths and/or weakness of your patents, conduct a due diligence. This will allow you to determine which patents represent a real value and which ones are weak to launch actions. Once you have determined the weakness in your patents, you will have the opportunity to revert such mistakes in your future filings, consolidating a profitable patent portfolio.
Quality of the exploitation…
If you have your patent, you need to be sure that you are exploiting your rights in the best way possible. The following are the most common practice to exploit your patent rights.
I. Exploit your patent rights by yourself.
If you have the economic and technical capacity to do so, this is a good alternative to exploit your patent rights. Even consider the possibility to exploit your patent abroad.
Patent rights are territorially granted. Therefore, if you do not protect your patent rights abroad, your invention will become part of the public domain in the countries that you have not obtained protection.
In this sense, other companies may take advantage of your invention and obtain profits without being forced to pay you royalties.
If you are able to exploit your patent by yourself, try to obtain protection in all the countries that are from your interest and you have capacity to exploit your invention. Otherwise, you will lose money.
Exploiting your patent by yourself requires a solid business plan but you will have all the control and all the benefits for your invention.
You have to remember that according to the Mexican Patent Law, if the patent is not exploited, third parties are able to request an obligatory license. Once the obligatory license is granted and if the owner does not cure the lack of exploitation of the patent after one year, the patent rights will be declared as cancelled.
II. Grant a license agreement.
This is the best way to obtain profits minimizing risk and obtaining considerable winnings. When you grant a license to others, you give them permission to exploit your rights and you may ask for the payment of royalties.
Handling the manufacturing of your patented products requires a large amount of money and the need to comply with local and/or foreign regulations, etc. the exploitation of your invention by others, will limit your winnings but will limit the risk as well.
You can exploit your patent and grant licenses too. The license opportunities are huge. Moreover, if you have consolidated the quality of your invention and the quality of your protection (this means, your patent has value in market and it has been properly protected), licensee will pay you handsomely.
The patent licenses are exclusive or non-exclusive, cover a single territory, free of royalties or not, etc. In any case, you need to be sure that you have the correct contracts; confidential clauses, non-compete clauses, clear royalty payment clauses, right to audit clauses, peace and safe clauses are always advisable.
It is important to record your license agreements before the Mexican Institute of Industrial Property (IMPI). The inscription of the license before IMPI produces effect against third parties. The exploitation made by the licensee, is considered as a use mad by the licensor.
A license may give you the opportunity to access to markets that you are not able to access and without additional expenses or lowering the cost and risk by doing it by yourself.
III. Cross-licenses
Cross licenses eliminate litigation costs and give you the possibility to exploit technology from others but you need to grant in license your patents too.
Sometimes innovation is based on prior rights that are in force and despite you have obtained a patent, you are not able to exploit it because the production and the commercialization of that product may infringe prior patent rights.
High tech companies generally develop large patent portfolios. However, the innovation in that area is growing day by day. Therefore, these companies cannot obtain royalties for using their patent portfolio without enters in litigation conflicts. Thus, in order to not lose the winnings and keep the innovation alive, cross licensed patent portfolios will give you the possibility to exploit your patent rights.
Conclusions
Innovating and protect your innovations may require important monetary and timing resources. The only manner to obtain a return of profits is by consolidating a strong patent portfolio and ensures that you are exploiting your rights in the best way possible.
If you are able to consolidate a patent portfolio profitable, your company will be always on the top.