I had the pleasure of presenting IP roadmaps and to talk about intellectual property at an AIP event at Club 44 in La Chaux-de-Fonds, a dynamic association which gathers together industrialists in order to exchange their experiences and to promote innovation.
P&TS offers an IP roadmap to SMEs, who are members of this association in order to establish a strategy in terms of intellectual property. This means understanding the company’s business plan, carrying out a panoramic search in the patent data bases to understand the competitive context and then to propose an intellectual property strategy that will support the business plan and the company vision.
This is a new service for the SMEs, but is based on more than 400 IP roadmaps that we have done over a period of more than 10 years for start-ups, particularly as experts for CTI Startup/Innosuisse. That is 400 companies that we have visited, interviewed and examined from all angles to offer them an intellectual property strategy tailored to their needs and their ambitions. In fact, for start-ups even more than established companies, an efficient management of their resources in terms of money and time is crucial for building a solid patent portfolio, convincing investors, avoiding freedom to operate problems and to create some buzz without throwing money away!
In addition, this exercise is often an occasion to review the current IP strategy, and sometimes to identify problems. The number of audited start-ups enables revealing statistics to be drawn up showing the most frequently occurring problems in terms of intellectual property:
- Ownership problems
More than ever, companies need to work together in order to innovate. The problems to be solved are more and more complex, and often multidisciplinary. Start-ups often use technology originating from a university or polytechnic, or created by the founders before the company’s creation. Part of the software is written by external partners. Solutions are found and are perfected while talking to clients and subcontractors. All these exchanges are healthy and feed creativity; it is a question of open innovation, technology transfer and networking.
However, problems occur if the question of the ownership of the inventions and the developed software has not been settled. It is common to come across start-ups who did not thoroughly read the licence agreement that was assigned to them by the school they attended (in exchange for royalties and against equity); the rights are non-exclusive, or cover a field of application in a restrictive manner. External inventors end up being hired by a competitor, who claim their share of the patents originating from these inventions. The problem often arises when a due diligence requested by a potential investor, uncovers that the start-up does not in fact own any rights to the key components of the technology that it is manufacturing,
These ownership problems are particularly common with start-ups due to the special relationship they often enjoy with a school. However, a review of disputes handled by the Federal Tribunal of Patents shows that SMEs and even well-established companies are far from being protected. In this case we probably suffer from a culture based on confidence on a hand-shake, that is of course very pleasant, but not enough when the company’s survival is at stake.
- Strategy problems
The absence of a clear strategy is almost as common as the question of ownership. For example, we work with companies who make 80% of their sales with a product that is strategic but not protected, while a totally marginal product in terms of revenue is protected by numerous patents, because it was the pride and joy of the R&D team. Companies spend considerable amounts of money to protect themselves in China, or in other markets which are of course popular, but in which they do not make any sales and do not plan to develop in the medium term. SMEs benefit from an extremely well-known brand in their market, which allows them to gain the confidence of the consumers – but which omits the protection of this brand. More generally, there is often a divergence between the company’s general strategy expressed for example in their business plan, and the intellectual property strategy which does not support this business plan.
A well thought-out intellectual property strategy should aim to defend the company’s USPs, and to increase the price payable by any competitor who tries to compete with these unique products. It serves also to limit the risk of being attacked by competitors.
- Freedom to operate
Engineers are people who love problems, because they have to come up with a solution. They love research and are justifiably proud of their discoveries and their ingenuity. In general, they are much less interested in what their competitors are doing.
The risk taken when we develop something alone is not only that we may reinvent the wheel (which is already serious enough), but; we may end up developing a solution which cannot be sold because somebody else has already patented it. For example, we had to defend a well-renowned company which had spent 24 months developing and producing a new product, without realising that its number one competitor, a similar Japanese company, had filed a patent application that prevented any marketing of such a product. The sales had to be stopped once the catalogues had already been printed and the first orders had started to arrive.
Not enough companies resort to technological and patent watch, and regularly check on their competitors’ patents. This is indispensable, particularly when a company is active in a crowded technological field. By way of example, a modern smartphone like the Galaxy S7 is protected by more than 250,000 patents, according to the figures cited during the litigation against Apple.
- Quality problems
Like the musketeers, the three problems are in fact four. The fourth problem which concerns the quality of the intellectual property rights is therefore less common. The majority of companies seek advice from specialised firms to ensure that the patents or trademarks registered are generally of professional quality.
Sometimes we come across problems with claims which unnecessarily limit the protection; or which, on the other hand, are so broad that the validity of the patent is called into question. In fact, some applicants file without carrying out the slightest patentability study, or else only make a rough assisted search of a few hours which rarely is enough to identify the pertinent documents.
Quality problems also arise when the patent claims the priority of a provisional patent application filed without fee. In itself, the provisional patent application is a very good system that ensures a priority date with a minimum of effort and in record time, while freeing oneself for example of the time and costs required for preparing a description and formal figures, or to pay the filing fees. However, the system has become so popular that many companies, and even schools, have started filing provisional applications of woefully poor quality, for example patent applications without claims or with hastily written claims. It is extremely difficult to claim the validity of such a provisional application, particularly in Europe. Insurmountable difficulties arise particularly when the invention has been disclosed before the definitive filing of the patent, for example in the form of a scientific article or when the patented product comes to the market; in such cases, this disclosure predates the patent which cannot benefit from the priority date of the deficient provisional application, rendering the patent invalid.
In terms of trademarks, the problems encountered concern for example the choice of class that do not sufficiently cover the proposed products and services, or else the wording used for the products just uses the official wording, without adapting it to what the company does.
An IP roadmap allows not only to detect and to resolve these problems, but also to propose a plan of action to construct a robust and adapted intellectual property strategy. We are of course at your disposal to discuss your needs.
