Planning A Rock Solid Patent Portfolio Strategy

8 minutes

Table of Contents

Picture of Andrew Rapacke
Andrew Rapacke is a registered patent attorney and serves as Managing Partner at The Rapacke Law Group, a full service intellectual property law firm.
Patent Portfolio Strategy

The Patent Act of 1790 (1 Stat. 109), enacted on April 10, 1790, was the first patent statute in the United States. During the 19th and 20th centuries, rapid industrialization fueled by scientific advances and a veritable explosion in practical innovation by inventors as captured in patent filings by patent attorneys served as the foundation for the development and more effective monetization of patent rights, both in the United States and globally.

This process is still developing.

Today, businesses, governments, stakeholders, inventors, and patent attorneys continue to engage with each other and drive economic expansion worldwide. These interactions occur in the context of patent application filings and grants, patent licensing transactions and transfers, patent litigation, judicial decisions, and legislative developments. Businesses that develop a solid patent portfolio strategy are better positioned to timely identify valuable intellectual property and technological innovation, select and budget for the protection of technologies through patent prosecution, and monetize and profit from their intellectual property portfolio.

So, what is a patent portfolio development strategy? A patent portfolio development strategy is a business plan to develop commercially valuable patents, protect innovations and technology with patents, and monetize the patents.

How can you develop a patent portfolio development strategy? The starting point is to first understand the basics of patents and the scope of their protection and then to determine what innovative aspects of your business and its technology are patent eligible. Combined with your knowledge of innovation trends in your industry, you can then develop a short and long term strategy within your vertical.

What you need to know

Before discussing strategies, you should know that there are a myriad of activities you may engage in or fail to perform that could potentially harm or even completely bar your opportunity to file for and obtain a patent for your technological innovation and inventions. Typically, these activities appear benign or harmless and may even be beneficial to other aspects of your business, like marketing your products, offering your technologies or products to clients or customers at sales meetings, delivering a presentation disclosing features of your technologies, or publishing information about your invention on your website or social media pages. Timing is everything, since patent law is strict about deadlines based on timers that are set in motion, intentionally or unintentionally, by initial public disclosures. These types of deadlines also apply and/or have analogs for other intellectual property rights, such as trademarks, trade secrets, and copyrights.

While it is impossible to convey all patent portfolio development strategies in one article, here we address the basics below.

Business basics of patents

There are three types of patents:

  • Utility patents – the most common type of patent, these patents are directed to the functional aspects of inventions
  • Design patents – these patents are directed to new and original ornamental designs that are non-functional forms of innovation
  • Plant patents – these patents are directed to a new variety of plants that are invented and asexually reproduced

This article will focus on U.S. utility patents, but the strategies discussed may also apply to other types of patents.

What is patentable eligible subject matter? According to statute, patents can be granted for any process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereof, that is new, useful, and non-obvious.

What is a patent? A patent is a grant from the government to the patent owner (generally, the inventor, applicant, or an assignee who received the rights over the patent) for “the right to exclude others from making, using, offering for sale, or selling” the invention in the United States or “importing” the invention into the United States. Note: a patent does not give you a right to make or sell a product or service, but rather gives you the right to exclude others from making, using, offering for sale, selling, or importing the subject matter claimed in the patent. Other applicable laws and regulations may also restrict your ability to make or sell a patented product or service. For example, if you obtain a patent for a medicine, you still need to go through the approval process required by the U.S. Food and Drug Administration (FDA) to sell the medicine.

How do you obtain a patent for your invention? You must prepare and file a patent application with the United States Patent and Trademark Office (USPTO). Patent applications have different sections or parts, and generally include drawings (also called figures), a written description of the invention (also called the specification), and one or more claims. Each claim is written as one sentence and may include a number of portions, called limitations. Claims state the metes and bounds of the subject matter protected by the patent. Each claim is read separately, and the differences between each claim allow for variations in the description and limits of what the patent protects as your invention.

How are patents infringed? If a product or service contains or performs every element included in a claim of a patent, then that product likely infringes the patent. A product may infringe on more than one claim of the same patent and often does.

Obtaining a patent is not guaranteed. A business or individual may spend time and money to prepare and file a patent application and respond to USPTO Office Actions and still fail to obtain a patent. Generally, when you file a patent application with the USPTO it is placed in a queue for examination. Once the queue progresses, a USPTO Patent Examiner will eventually be assigned to examine and review your application. The Patent Examiner will search for applicable prior art that discloses the features recited in your claims and issue an Office Action explaining any reasons for the rejection of your claims based on the prior art they discover. To better understand how broadly you may draft your application in light of how “crowded” the prior art space is, it is recommended to perform a prior art search. This will be further discussed in the Planning your strategy section below.

Strategy – Know your business

While most patent portfolio development strategies will have common elements, it is critical to outline and understand your business goals.

When you are initially starting your business, chances are that you have a limited budget. A key consideration is timely identification and selection of the innovations and technologies that will best grow and protect your business. Once your business begins generating significant amounts of revenue and you are able to operate within a larger budget, your business is likely to expand the criteria for selecting inventions to patent. You may want to file patents for alternative technologies to block or bar competitors from developing competing products or services. At this point, your business should consider filing for international patent and intellectual property protection. For large / multinational businesses, patent-related activities include active monitoring of competitor products, patent assertion though litigation, setting aside defensive budgets for defending patent infringement allegations, management of patent prosecution through outside counsel, and management of international intellectual property portfolios.

Knowing your business and industry is essential when discussing patent portfolio development strategies with your patent attorney.

Strategy – Selecting inventions for patent applications

You probably know intuitively which inventions you want to pursue protection for through patent applications. However, when you have multiple inventions and a limited budget, how do you choose among the alternatives? Ask yourself, if you had the perfect patent, what would that patent block your competitor from achieving? What are the minimum number of elements, parts, components, processes, and the like, that, if incorporated into a product, would be a copy of your innovation? When answering these questions, you might notice that different products, components, or inventions, you will necessitate different answers. Gather those inventions and answers and organize them in order of competitive and economic importance.

Now you will have a list of inventions and technologies in order of importance to your business. With your budget in mind, you can select and prioritize the inventions for which you intend to file patent applications. However, before filing a patent application, you should consider the value that a prior art search might bring to your patent applications.

We’ve compiled a list of recent software examples from top companies so you can better understand how to select an invention for a patent protection.

There are at least two basic benefits to a prior art search.

First, a prior art search informs you about whether your invention warrants filing a patent application or whether the prior art shows that a patent application for your invention is likely to be rejected because its features have been previously disclosed. While prior art searches are not exhaustive and not as nuanced and detailed as the searches done by USPTO Patent Examiners, they often save inventors time and money by identifying easy-to-find prior art that could otherwise result in an easily avoided rejection of a patent application.

Second, a prior art search provides knowledge of some existing prior patents and patent applications, which can be used to improve the details and focus when drafting the patent application for your current invention. Understand how “crowded” a prior art space is will help you determine the scope of your claims.

How do you obtain a prior art search for your invention? Generally, your patent attorney will provide you with a disclosure questionnaire that you will complete. Businesses that are innovation focused may even have Invention Disclosure Documents that employees use to report innovations and potential inventions to management. Your patent attorney can develop an Invention Disclosure Document for internal use with employees to better understand what questions are most relevant to identifying the novelty and patent-eligible subject matter. 

It is also common to have an invention disclosure meeting with the inventors. In these meetings, inventors have an opportunity to explain the details of their invention with their patent attorney and answer any questions that the patent attorney may have about the invention.

What strategy should you use for the prior art search? While there are publicly available search engines that may provide you with prior art, for a more thorough search you will need a professional patent search engine that includes patents and patent applications from the U.S. and from other countries. Searching these additional databases is likely to reveal prior art that might not be easily accessible to the public, but that a Patent Examiner may find using the USPTO’s powerful searching tools. Whatever search engine you or your patent attorney use, the next step is to identify the most important elements, parts, components, processes, and the like, that together make your invention. A proper prior art search strategy includes searching for those identified elements in patent applications and patents, including using relevant targeted keywords and similar concepts.

Strategy – Offensive and Defensive Patent Strategies

The most common strategies employed by businesses is to develop a defensive patent strategy aimed at preventing competitors from obtaining patents in the same field and technology area of your business by utilizing your patent filings as prior art for competitors.

When people think about patents, most often they are thinking about an offensive strategy where companies can commercialize their patents through licensing. However, the amount and scope of the patent applications that you file will vary depending on your overall strategy. For example in a defensive patent strategy, is common to see longer disclosures and descriptions, and may further include patents and published applications previously identified by Examiners as prior art in an information disclosure statement.

You can develop your patent portfolio by continuously identifying, selecting, and budgeting for applications for patent protection, and aligning your innovation with your busines goals and filing your application.  As your business evolves, so should your patent development strategy.

Special Considerations for Tech Startups

Technology startups often find themselves at risk of launching a technology in an economy that rewards first-to-market strategies. However, first-to-market strategies can result in short-term gains at the expense of a long-term strategic patent portfolio. Remember these two points: (1) you do not have to create, test, or finish your product before filing a patent application, so you can prepare and file an application while developing your product or service, and (2) when time is of the essence, file a provisional patent application to immediately establish your priority date.

A provisional patent application is an effective placeholder for 12-months before a non-provisional patent application has to be filed. You can describe and detail your invention and its elements without the formal requirements of a non-provisional patent application. Later, when you convert and file a non-provisional (regular) patent application, you can claim the benefit of the earlier filing date of the provisional patent application. The content of the non-provisional patent application that is covered by the provisional application receives the benefit of the earlier filing date. You can learn more about provisional patent applications by clicking here.

If you have a SaaS business, we invite you to see our SaaS Patent Guide by clicking here.

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