Tuesday, November 15, 2005

intellectual property

In my experience IP protection is a necessary part of creating any non-commodity related business. Even though the patent may never be defended it is a check mark for customer, partners, and venture capitalists that is a sign that you've done your homework in bringing the product to market. That being said, the patent process can be an extremely frustrating excercise and is somewhat enigmatic.

As I said before, if you have a non-commodity company than you must have some special sauce that enables you to do something better or faster, or something that was not possible to do in the past. Identify that thing and do your homework regarding whether it is truly novel or whether someone has done something similar either in your space or in other markets in the past. Even if there is a similar invention in existence this does not mean your idea is unpatentable. What it means is that you have to discover what makes your idea unique. Now, you have to do this for the business anyway in order to build out your marketing collateral identifying your differentiating characteristics.

If you can afford one, the next step is to contact a patent attorney. You can file yourself, but a good patent attorney will make a big difference in following the patent through to issuance. An interim step that you can also pursue is to file for a provisional patent. The provisional patent is n't laid out into formal clams but does outline what your invention does. This puts a date stake in the ground that is documented and placed on file in the patent office. The provisional patent is not public information and will expire within 1 year if you do not file for a full patent. The provisional patent does let you claim patent pending and has a much lower cost of filing.

Once you have filed, you wait, and wait, and wait. The clerks in the patent office are buried in patent review work. There are not enough of these guys/gals to handle the number of patents coming in and they typically have broad but not deep experience. Therefore, once your patent reaches the top of the heap, the clerk assigned will need to learn enough about the area of your patent to make a determination whether to approve or reject the claims you have made.

Claims will be individually accepted or rejected. If a claim is rejected, the rejection must either be refuted or the claim take out altogether. You will typically write a number of claims in your patent application beginning with very general and moving to more specific. General claims are often rejected. The more general of a claim that you can get accepted the broader the patent's applicability will be. For the claims that are more specific and your company's IP hinges on you will want to refute the rejections (this is where a patent attorney comes in handy). I've copied a section out of a patent I'm currently working on and you can see what I mean...

The undersigned also questions the motivation to combine X and Y as the two systems solve different problems and propose incompatible methodologies for identifying ------- performance issues. For example, X attempts to identify a current problem in a -------- by comparing current data collected regarding a --------------- to its associated --------- whereas Y is focused on ------------ problem by way of evaluating company policy regarding maintenance procedures, the time required to complete maintenance work, performance criteria, observed changes in the ---------- and projected performance criterion. Consequently, the undersigned is not in agreement with the Examiner’s conclusion that “[o]ne of ordinary skill in the art … would have been motivated because it is desirable to have a ----------- system that detects problems or potential problems” (page 6 of the Office action).

In the overall scheme of things the success of the company will not come down to IP protection but market value of the product, sales, and execution. IP protection is a tactical component that will come into play in the early life as a company before it can be valued by ttm revenue.

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