Why is patent due diligence important for your organization?

Hewlett-Packard (HP), the information technology giant, bought Autonomy for $11.1 billion, in 2012. They wanted to move away from computer hardware to computer software and buying Autonomy seemed like the smartest move to make. Inaccurate income statements, balance sheets, cash flows, and footnotes were a part of the due diligence oversight. Within 14 months after the deal, HP sold Autonomy by writing down more than 80% of the purchase price. 

 

If HP had followed the due diligence practices that they regularly did, they shouldn’t have had to write down the value of their purchase. Organizations should be mindful of following due diligence if they don’t want a botched deal. 

 

What is patent due diligence?

The process of carefully analyzing a company’s patent portfolio is called patent due diligence. It audits the quantity and the quality of IP assets owned by or licensed to a company, business, or individual. The assessment also includes how intellectual property is captured and protected by the business. 

IP due diligence is usually performed by a prospective buyer in relation to the IP assets of the target company. It can also be carried out by a company on its own assets in preparation for a business sale or to close a licensing deal. It tells you whether you can monetize your patents through licensing, enforcement or divestment. 

It also helps you assess the infringement risks posed by competitors’ patents or the patents of another business. 

 

Why conduct IP due diligence?

IP assets have become one of the most important assets that businesses could own. Therefore, it is imperative for businesses to understand the following: 

  • The quantity and quality of the IPs with them so that 3rd parties can put a value on them 
  • To identify IP assets that are not being used currently and whose maintenance costs are being unnecessarily paid
  • To assess whether all the IP assets are adequately protected 
  • To ensure that you have all the necessary rights to your IP assets in order
  • To check whether a third party is infringing on your IP rights 

 

When should a patent due diligence be performed? 

 

  • After you receive a Cease and Desist Letter, or a Notice Letter:

A cease and desist letter or notice is usually sent as a warning to infringers about the existence of the patent rights to initiate licensing discussions, enforce their patent rights, or secure the opportunity to collect damages. 

Such letters claim that the accused infringer stop their infringing conduct immediately. If a company receives such letters, it should ensure that they have a strategy in place to respond properly and reduce its risks. 

They should note the depth of the infringement analysis (usually provided by the patent holder). It will have details about the patent expiry date, and applicable state statutes which talk about the consequences of acting in bad faith. 

 

  • During Mergers & Acquisitions:

During an M&A transaction, the following things are assessed, whether the seller’s patent portfolios include critical company technology to confirm if all fees have been paid and no ownership issues or chain of title defects exist. Following these steps will permit the parties to assign a monetary value to the portfolio. The analysis at this stage can also include assessing the patent infringement risks posed by third-party patents on the technology that is going to be acquired. 

 

  • During divestment, or licensing

Divestment and licensing strategies allow the patent owners to determine how their patents will be utilized. If their portfolio affords broad patent protection, then the value of the technology is high. Valuing patents can be performed in a number of techniques, both quantitative and qualitative. Qualitative analysis helps in determining the scope and strength of the patent rights. On the other hand, a quantitative analysis leverages these findings to assign a monetary value to those rights.

 

  • For contingency reasons:

Patent due diligence can also be done for contingency reasons. If you believe that you might be sued for infringement, and would like to have a deeper understanding of your patent portfolio and how it fares against your competitor’s, then it is wise to conduct patent due diligence. Let’s say you are planning to sue a company that is infringing on your patents, then it is wise to invest in conducting patent due diligence.

 

  • Before filing a patent application:

Patent due diligence is also performed before filing a patent application. They are performed to identify and assess prior art references.

 

How to Conduct IP due diligence. 

Conducting IP due diligence requires professional skills and has to be done thoroughly. IP due diligence should be performed during the initial stages of negotiations itself. By doing so, you will identify if there are any legal issues that affect the value of the IP. While every business transaction is different, there are a set of requirements that should be met when conducting IP due diligence. Here are a few of them. 

 

  • Identify IP assets: 

You need to find the patents, trademarks, brand names, domain names, and any other tangible and intangible assets of the company that you are investigating. 

 

  • Verify ownership and existence of IP: 

One of the first things that are usually investigated during an IP due diligence process is IP ownership. To establish and recognize the seller’s rights, a series of questions are asked about each of the IP assets that are being considered. The IP assets should be easily transferable and there should not be any disputes. If there are disputes, it becomes difficult for the seller to transfer the title and rights of the IP asset to other parties. 

 

  • Check for areas covered in the IP

When you’re validating each IP asset, it is imperative that you check for the countries where IP rights are covered. Therefore, you need to identify which of the territories are protected. If the business operates in multiple countries and has not secured their rights in all the areas where they operate, you might not be able to leverage the IP in those areas. Do remember that IP assets like copyrights and patents are only valid for a certain period of time. You need to study the local IP laws of each directory to check the validity.

 

  • Checking for third party claims:

Apart from identifying IP ownership, it is also wise to check if there are any third-party claims with respect to the seller’s IP assets. There are times when a third-party might have got rights to an IP asset unknowingly. You need to check all the license agreements, franchisee agreements, joint venture agreements, MOUs, and other contracts to ascertain that you will be receiving exclusive rights once you buy the IP assets from the seller. 

 

  • Evaluate potential IP infringements:  

You also need to ascertain whether a third party is infringing on the seller’s IP rights or if the seller’s IP rights are infringing on another company’s assets. In either of these cases, the disputes that arise from it will negatively affect your business. You have to mandatorily conduct a freedom-to-operate search to check whether the investor can make use or sell their IP assets without infringing on any third-party rights. 

 

An FTO search will give you deeper insights into patent rights and tell you if there are any other roadblocks that you need to be careful about. It’s the FTO searches that show any roadblocks. You need to take the necessary steps to overcome them.

 

Steps to conduct due diligence properly:

  1. Ensure that you have a proper IP due diligence team in place. Discuss with IP professionals to see what can be expected from the transactions.
  2. Come up with an IP due diligence checklist based on what is necessary. 
  3. Segment the IP assets of the target that is relevant for the transaction. Segregate IP rights or protectable intangible insights from those that are not relevant. The IP due diligence should show the importance of connecting such additional IP rights with the main IP rights for the transaction. 
  4. Find out the nitty-gritty when it comes to IP ownership. Ensure that you collect information on other IP rights that might pose an issue in the future. 
  5. It is important that the facts collected are also double-checked so that there is no discrepancy. 
  6. Analyze the protected and protectable IP rights. Check for the IP’s status, validity, ownership, claim, and conflict. 
  7. After conducting all the above, prepare the final due diligence report. It should highlight the risks that are a part of the strategies and ways to reduce the risks and the liabilities. 
  8. Document, execute, and record the IP agreements. 

 

Conclusion:

Conducting due diligence is a non-negotiable activity for businesses to mitigate the risks involved. It should be done no matter what your IP portfolio composition looks like. Having a proper due diligence strategy and following it rightly provides a world of benefits for all the stakeholders involved. 

If you are looking for an end-to-end IP services firm to help with patent due diligence, ResearchWire will be glad to help you with it. Get on a call with us to understand how we can assist with your IP needs.  

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Everything you wanted to know about Freedom To Operate search

Also known as infringement analysis or clearance search, the objective of freedom to operate search is to check if any product or process utilised is infringing on a live patent’s claim. If there is no due diligence, the chances of infringing on someone’s intellectual property is high. An effective FTO search is what you need to do to stay safe from the dangers of litigation. 

 

What is Freedom to Operate Search?

It is used to find out if there is the freedom to operate and invent in a particular jurisdiction from a legal view.  If an FTO is found to be negative, then the entity aiming to operate the invention should not proceed to go ahead with the invention. 

An FTO search is part of the due diligence that organizations should carry out before they apply for a patent. A patent clearance search is also conducted during various places in the innovation process so that there is a proper allocation of R&D resources. When you conduct a thorough FTO search, it demonstrates due diligence on your part if you were to be ever accused of IP infringement. 

 

When should an FTO search be conducted? 

It should be conducted as early in the product development cycle as possible. Doing so will help avoid unnecessary costs, reduce the allocation of wasted resources, show opportunities to license existing technology,  save time, and mitigate the risk of litigation. A good FTO patent search can also enable the inventor an opportunity to develop a design ground early. 

 

Questions to consider before an FTO search?

Here are some of the questions that you should ask to determine your FTO search strategy. 

 

  1. Which stage of the innovation process are you in?

During the R&D process, you should have completed the FTO search a number of times. Depending on which stage of the innovation you are in, the way you approach the search will be different. Why? Because the claims in the potentially risky patent might change by the time you are ready to launch your product in the market.

      2. What is the investment for your invention?

If there is a lot of money involved, you should be sure about your freedom to operate. Ensure that you conduct extensive searches. For technologies (read inventions) that will only give a modest ROI, your FTO search need not be intensive. 

      3. What is your risk tolerance?

If you do not have much idea about your freedom to operate, then you have to be tolerant of the risk associated. Even risk-tolerant organizations might not want the threat of an infringement suit hanging against their heads. You might want to invest in a thorough FTO search at multiple points during the product development phase. 

      4. Does your industry patent often? 

There are some industries that are a lot more crowded with prior arts than others. If yours is an industry that creates patents often, then it is imperative that you conduct in-depth FTO searches. You can start by searching your direct competitor’s patents, industry-wide patent searches and utilize a search tool that has semantic and Boolean search capabilities. 

      5. Does litigation happen often in your industry?

Industries such as electrical equipment, biotech, electronics, consumers, telecommunication, will see a lot of patent infringement cases. If your product belongs to any of the industries mentioned above, then you need to protect yourself from infringement suits by conducting patent clearance searches. 

     6. Where will you operate?

The type of search strategy that you should use will depend on where you want to launch your product. 

 

Best Practices for Conducting Effective FTO Searches:

 

  • Jurisdiction Coverage:

FTO search is performed based on the jurisdiction where the inventor or company is likely to launch the products. It is necessary to consider and cover all the channels related to a particular jurisdiction. Otherwise, the searcher might miss important patents. 

 

  • Date restriction: 

While performing an FTO search, date restriction is an important aspect. Usually, all the alive patents are considered. Some alive patents might fall outside the 20-year criteria, even if they are not from the below-mentioned industries. One more thing to keep in mind is the domain in which the search has been conducted. There are domains like veterinary, pharmaceuticals, food additives, medical devices, etc., where there is the concept of patent term extension. 

The patent term extension cannot exceed five years. The aim is to offer an extension for the time period when the patent holder is waiting for regulatory approvals. Therefore, it’s pivotal to vary the date restriction based on the domain you are searching.

 

  • Targeting important domain players: 

There are important players who have a huge portfolio of patents in each domain. You should concentrate your searching efforts carefully to evaluate their updated portfolio. It is important that a searcher evaluate the portfolio of their company’s competitors and ensure that all-important patents owned by the competitors are being searched thoroughly. 

 

  • Citation search:

The backward and forward citations of a patent are usually the closest results to that particular patent in the domain. After the analysis is done, it is considered a best practice to do the citation search of the shortlisted patents. It will help the searcher to identify patents that could have been missed during the FTO search. It could be missed because of factors such as missing classification, translation mistakes or a missing keyword.

 

  • Similarity Search: 

Many databases provide you with a feature called the similarity search and it is crucial for FTO searching. This feature helps searchers identify close prior arts which might have been missed otherwise. Since each relevant patent has a huge significance with respect to FTO, we advise not to miss standard searching steps so that you can capture all the patents that disclose similar inventions. 

 

  • Patent Segregation to prioritize efforts:

Dividing the patents into different sets based on their claim length and legal status can help with effective searching and analysis. 

Claim Length: Comprehensive claim analysis of the patent is required during FTO searches. The scope of the invention is defined by the length of the main independent claim. As a rule, the shorter claim length of the main independent claim, it has a broader coverage of the domain. There are many searching databases, which provide the main independent claim length as a feature. 

Legal Status: It is also possible to divide the patent result as per the family legal status.

of the patent family. When you’re launching a product, only active and granted patents can pose obstacles. Therefore, these patents need to be carefully searched. 

 

  • Keywords and Classifications:

By searching the patents and products in the domain, it is possible to identify the keywords and classifications. Observe the diversified keywords that are used to disclose the same invention. You also need to track classifications throughout the search process as it’ll help you gain insights as to which class includes most of the patents of interest. Iterate the old strings with the help of updated keywords so that no obvious buttons are missed while reporting the FTO search.

 

  • Report the findings:  

The findings need to be put in an easy-to-understand manner. Ensure that there are no communication gaps by structuring the findings in the report properly. 

 

Categorizing the results:

The results should be categorized to define different sets of results in an easy way. At ResearchWire, we use the following labels- High, Medium and Low Risk. The claims of the ‘Relevant’ patents can be quite broad and the product could appear to infringe the protected subject matter of these patents. The ‘Potentially relevant’ and the ‘Related’ categories are patents whose claims might include a few restrictive features. The product may or may not be infringing on the claims.

 

Report the patents in the decreasing order:

For FTO searches, it is best to report the patents in the decreasing order of their risk level. It reduces the time taken by the client to check the results quickly. 

 

Legal Status:

The legal status is dynamic in nature as it gets updated regularly by the patent office. The update is based on factors such as patent life, the status of the maintenance fee payment, disputes, etc. While preparing the reports, make sure that you check the legal status of all the relevant patents. 

 

Latest claims:

Since the FTO patent search is a claim-oriented search, the latest claims and pending applications are considered for analysis. To ensure the best quality, each claim of all the active and granted patents should be ratified with the National patent office websites. 

 

Conclusion:

There is immense potential to calculate the chances of infringement in advance through FTO analysis. A correct FTO analysis can not only measure the probability of avoiding patent infringement litigation, but can also provide you with new business opportunities by showing what is available in the technology that you’ve chosen. It also minimizes the risks of infringement of the rights of third parties. 

Are you looking for a partner to take care of your Intellectual Property needs? The team at ResearchWire is capable of handling any type of IP issue that your company might be facing. We are experienced at building custom solutions for your specific intellectual property needs.

Get in touch with us to understand how we can help you. 

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How to leverage the full potential of Google Patent Search

There has been a tremendous improvement in patent searching in the past decade. The objective behind searching for patents is to find prior art for an existing patent or for an invention for which a patent application is yet to be filed. Earlier, searchers and inventors used to manually search, spending hundreds of hours to find invention(s) similar to their idea. 

 

A quick way to search for patents is using Google Patent Search. The world’s most popular search engine does more than just crawl websites to send you their search results. Google’s sister search engine Google Patent (Database from IFI Claims) can not only search scholarly literature, but it also has the ability to search a huge repository of non-patent literature too- software, applications, manuscripts, and published articles. Google Scholar lets you search government databases too, thus increasing the reach of the patent search. 

 

What is Google Patent Search?

It is a search engine powered by Google which indexes patents and patent applications. Google Patents indexes 87 million patents and patent applications, with full text from more than 17 patent offices around the world. Launched on December 14, 2006, it uses the same technology as Google Books. Google Patents includes text-searchable patents dating back as far as the 1790s. 

 

Advantages of Google Patents:

One of the biggest advantages of Google Patent Search is that it is free. Although there are a number of free patent databases such as Espacenet, PQAI, Lens.org, Patentscope by WIPO, and more, none of them matches Google’s in terms of user-friendliness. There is a lot of content to navigate for the average searcher, and the experience on these sites while browsing, is important, otherwise, it can be too difficult to get the work done. 

There are many paid databases too, but a solo inventor might not be able to cough up the costs to get the license for them. Google Patents has a much better interface than all of these paid databases. You will also be able to get the results faster, they are provided in an easy-to-share PDF format, and the information is presented in a digestible format. 

  • It understands results with PDF, image and citations
  • Its relevancy ranking makes quick searches a reality
  • The results can also be filtered by date
  • Proximity Operators can be leveraged to improve the score if the documents have expressions near one another
  • Keyword and class-based search is possible  in the patent documents
  • Co-operative Patent Classification (CPC) code searching is easier
  • Searching on Google Patents is similar to searching anything on Google
  • You can get the most relevant results for your search query.
  • It is possible to find prior arts 
  • Provides similar documents/patents to the subject patent

 

How to use Google Patent Search?

Quick Search:

If you want to conduct a quick search, all you need to do is enter the term in the search field box. The search term can be a set of unstructured words, a large block of text relating to the invention or keywords pertaining to the technology. 

 

The searcher can also enter the following to get information about related patents:

  • Application number
  • Exact phrases with double quotes
  • CPC code 
  • Country code
  • Language
  • Publication number
  • Search for the inventor or assignee

For example, we have entered the search term as ‘medical equipment,’ and we are shown a list of patents that are in the medical equipment field. You will be able to see a number of options on the left side using which you can further filter the search results. The results are sorted for relevance, you can use other sorting options such as newest or oldest. The searcher can navigate through the result pages to find relevant patents. 

 

Importance of Boolean Operators in Google Patent Search:

To fine-tune one’s queries, searchers should use boolean operators and special characters. One of the best ways to leverage Google Patent Search is to understand how it interprets search requests. Here is how you can use it to its full extent. 

 

  • Keyword search rules:
  • The keywords that you use must be exact and specific
  • Be aware of the right keyword order in which you need to input your search query. The search term medical equipment is going to fetch you more relevant results relating to medical equipment than ‘equipment medical.’ 
  • The keyword searches are not case-sensitive. 

 

  • The AND Assumption:

If you type the keyword medical equipment, Google Patent Search is always going to assume it to be medical and equipment. Therefore, it will search for patents that contain the words medical and equipment. 

To search for a particular term, add a ‘+’ (plus) sign in between the words in the query.

 

  • NOT Command:

If you want to find patents without a certain search term, then you need to use the ‘-’ (minus) sign in front of the word in the query. The ‘-’ sign indicates that the searcher doesn’t want results of patents that contain that term. 

Make sure that there is no space between the minus symbol and the word. 

Laptop-touchscreen

 

When searching for patents related to laptops, if you don’t want anything that pertains to touchscreen technology, this is how you should input your query. For the above search, you will not get patents that talk about touchscreen.

 

  • While searching for a specific phrase:

When searching for an exact phrase, you can use quotation marks around the keywords. For example, if the searcher inputs:

“Contract Lifecycle Management”

Google Patents will only search for patents that will contain the entire phrase “contract lifecycle management.” 

Searchers can include more than one quoted string in a query. The implied AND works not only on individual words but also on quoted phrases. 

 

  • The OR Command:

When the searcher wants to search for one word or the other, they should enter OR (in capitals) between the keywords. Any or all the search terms separated by the OR should appear in the record. 

Chip OR Charger

In the above scenario, Google Patents will search for patents containing either the word chip or the word charger. 

 

Google Patents Advanced Search:

On the Google Patents interface, you can get the advanced search option by clicking the link ‘patents.google.com/advanced.’ It has more search fields that will help you search for the desired patent applications. Let’s see what these fields are and how they can be used for different types of searches.

 

Search Terms: Use the space to enter all the relevant keywords.

Before priority/publication/filing: In this search field, you can enter the priority date, date of publication or filing date of any patent. By entering the relevant details, you will be able to search for documents that are published, filed or have a priority date before a particular date. This feature can also be used for invalidity searches where the intent is to find out documents that have been published before a particular date. 

After priority/publication/filing: Using this search field, you can search patent documents that are published, filed or have a priority date after a particular date. 

Assignee: In this search field, you can search for patents that have been filed by a particular company or person. It is possible to track the patent filing activities of that person/company using this field.

Patent Office: If you want to search for patents from a particular jurisdiction, this is the field that you need to use. You can search patent documents from more than 23 jurisdictions around the globe using this search field. 

Inventor: With this, you can search for patents filed by a particular inventor and can also track their patent filing activities. 

Filing status: You can search for the status of specified patent applications.

Patent Type: You can do a patent search for design or utility patents here.

CPC: Search for patent documents based on a particular CPC.

Citing Patent: It allows you to search for patent documents for which only one particular document was cited during the examination.

Languages: You can search for patent documents in 14 languages. 

With more and more filters added to your patent search, you will be able to get more accurate results. 

For the same search term, we have added the patent office as the US and the type of patent as design, the number of search results has dwindled down to 2,884. Earlier, it was 134,000+ results. 

Source: Google Patent Search

It is best advised to use relevant parameters to get the most relevant results. 

 

Limitations of Google Patents Search:

Since the patent database of Google is not updated regularly, you might not be able to find the latest data, and it may only have the first version of each patent. Also, since this is a free portal, Google does not take responsibility for the information that is presented in its search results. Therefore, you need to check for the veracity of the information from the respective patent offices or use a professional to confirm the same. This might not be the case with paid databases as they will verify the claims made here. 

For those who are beginning, Google Patent Search is a wonderful tool, but if you are looking for a comprehensive set of results, then it is advised to take the services of a professional. There are some inventions that are so complex, and are not easy for inventors to search nor would they have the time to pore through the vast literature in a reasonable period of time without professional help. 

 

Wrapping up:

If you are looking to get a basic idea related to your invention, then Google Patent Search should be your go-to tool. As we have mentioned above, it does come with a few limitations. When the purpose of your search is not critical, you needn’t think twice about using it. Let’s say you spend hundreds of hours poring through a large amount of patent literature, you are either doing it wrong or you’ve struck gold in terms of an invention. 

Are you looking for a partner for all your Intellectual Property related needs?

The team at ResearchWire is capable of handling any type of IP issue. We are experienced at building custom solutions for your specific intellectual property needs. 

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Patent Buying Strategies for Businesses

The Intellectual Property strategy that you have in place should have your best commercial interests in mind. It would be unwise to add patents to your portfolio just to add it to your repertoire. Most companies want to know where to invest using their R&D budgets. Many of them are on tenterhooks about buying patents because they wonder if it will become a burden in the future. 

In this article, we are going to learn patent buying strategies that businesses can use to get ahead in their industry. 

 

Patent buying strategies:

  • Patent Pool:

Think of patent pools as a partnership of at least two companies who have agreed to cross-license patents. The pooled patents are made available to the licensees and the licensing fees are shared among the parties based on each patent’s value. 

Many industries will cease to function without patent pools since the risk involved would be too high and reduces the need to negotiate with other patent holders. For example, the automobile industry shares patents to standardize components. 

 

  • Target companies that have filed bankruptcy:

The difficult business circumstances caused by Covid-19 has made multiple organizations file for bankruptcy. This presents a hotbed of opportunities for those who want to purchase assets at reduced costs, including intellectual property. You can get a heavy discount for patents, especially with companies that have filed bankruptcy. 

In the communications field, the bankrupt Nortel Networks sold their portion of patents to Sony, Microsoft, Apple and Research in Motion for $4.5 billion. Google was also fiercely fighting to get a piece of Nortel’s patent tranche. If Google had won the bid, they would have been able to protect Android from various patent infringement claims. 

 

  • Look for inventors:

There are many inventors who work alone or with a small team, and are not part of a business entity. These inventors are looking for someone to purchase or at least license their patents. It is also a chance for businesses to get patents at a reasonable price since the inventors know that their invention has a sell-by date. Businesses should always be on the lookout for investors who keep filing patents in their niche. 

 

  • Check out universities:

Universities spend a significant amount of money on their research and are always on the lookout for either buyers or funders. More often than not, universities are ignored when businesses are on the lookout to buy patents. The patent filing rate in universities has increased of late, and they are also aggressively looking out to license their inventions. If you are looking to acquire patents from a particular niche, we would advise you to contact the universities and take a look at the research that is being done. 

 

  • Defensive Patent Aggregation (DPA):

Purchasing patents or patent rights just to keep them off the hands of companies that would use them against operating companies is called defensive patent aggregation. Companies have to often defend themselves against claims of patent infringement, and sometimes, they must purchase patents in technologies which they use or develop. 

The opposite of DPA is called Offensive Patent Aggregation (OPA). In this, the patents are purchased in order to assert them against companies which would use the inventions protected by these patents and to provide licenses to get licensing fees or royalties. 

 

  • Patentleft:

It is the practice of licensing patents where they could use them royalty-free. The only condition is that the adopters create improvements under the same terms. Also called a copyleft-style patent license, it seeks “continuous growth of a universally accessible technology commons” from which everyone will benefit. 

The idea of such an open patent ecosystem is practiced by a group of research-oriented companies. It is worth noting that most of the businesses that follow this strategy are usually biological patents. 

 

  • Stick Licensing:

Licensing a patent or any form of intellectual property where the patent owner threatens litigation for patent infringement if the company does not take a license from them. The opposite of this is called carrot licensing where there is a friendly approach to adopt their invention to take a license. An example of carrot licensing would be universities that approach businesses to license or buy their patents. 

 

  • Assortment of patents:

The reason behind diversification is to reduce your risks to market conditions. The same goes for your patents as well, but it is not only to minimize the risks, but also to expand your research. 

Seattle-based retail giant Amazon is an example of a conglomerate that has a diversified patent portfolio. In 2010, they had less than 1,000 active patents, but by 2019, they had more than 10,000 of them. Their patent portfolio encompasses a wide array of technologies- cloud computing, machine learning, drones, retail, robotics- you name it. The reason why Amazon is aggressively diversifying its portfolio is because it gives them the leverage to enter any field that they want to. 

 

  • Fire Sale:

In April 2016, Yahoo transferred more than 3,000 of its current and pending patents to a new subsidiary called Excalibur. It was created exclusively to auction these patents. While the executives at Yahoo vehemently denied that it was a fire sale, nothing could be farther from the truth. 

What is a fire sale? It is the sale of goods at extremely discounted prices. Another example of a patent fire sale was Kodak selling off its patents for $527 million. It was estimated that their entire patent portfolio was valued anywhere between $2 and $3 billion. Google, Amazon, HTC, Facebook, Huawei, Apple and Samsung were able to buy it at such a discounted price because Kodak was forced to sell them to avoid bankruptcy. While you would not come across a fire sale often, you might get lucky if you closely monitor the conversations in your industry. 

 

Conclusion:

Patents can do a world of good for your business if you have the right patent strategy in place. The patent buying strategy that you employ should be in accordance with your company’s unique goals. Having patents can have a huge impact on how your potential customers and partners view you. 

If you are looking for help with any patent portfolio analysis or any other end-to-end intellectual property services, ResearchWire is the right partner for you. We are one of the world’s leading technology and intellectual property companies and offer assistance during each stage of the patent lifecycle. Get in touch with us to get an idea of how we can transform your IP strategy. 

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Things To Do When The Patent Examiner Rejects Your Patent

Filing your patent application is an exciting part of the process. But the chances of your patent being rejected will always loom large over your head. Thankfully, there are steps that you can take when the patent examiner rejects your patent.  

Dealing with your patent getting rejected is also a part of the process. In a Yale University study of over 2.15 million US patent applications from 1996 to mid-2013, more than 90% of them were rejected. So if you have filed a patent and it has been rejected, do not fret, you can argue against the examiner’s rejection and get things fixed. 

Before you go about arguing against the rejection, make sure that you know why your patent application has been rejected in the first place. When you understand the reason behind the rejection, you will be able to find a common ground and will also be in a position to seek the right kind of counsel. 

Who denies your patents?

The rejection or approval of patents happens at the patent office. Since there are a large number of patent applications that they receive, you should make it easy for the patent examiner to go through your application with ease. Ensure that your invention is patentable, unique, and non-obvious. Indulge in patent search to make sure that there is nothing similar to your invention. Give enough reasons for the patent examiner to approve your patent application. 

Why do patent requests get rejected? 

For your patent to be approved, it has to pass the patentability criteria. Below are some of the criteria.

Your invention is obvious- If your invention is not unique enough, then the chances of your application getting rejected is high. Your invention must at least be different from other inventions that are similar to yours. 

Poorly filled application- If your application is dotted with errors, you run the risk of getting your application rejected. Ensure that you follow all the guidelines that are to be met when drafting the application. To bring validity to your claims, add as much technical details as possible in a way that everyone can understand. 

Your invention is not novel- The invention for which you are seeking a patent should be the first of its kind. Before you file the application, it is wise to do a patent search to find the novelty of your invention. 

The importance of hiring a patent firm:

While there are a number of measures that you can take to increase the chances of your patent application being accepted, there is a crucial step that you can take to swing things in your favor. If you want a highly efficient solution, then it is wise to seek the expertise of a patent firm. They will not only help you in drafting the patent application, but will also be available throughout the entire process. A reputed intellectual property (IP) firm will have a team of experts who will help you wade through the process efficiently. 

 

Steps to take when the patent examiner rejects your patent:

  • Show why your invention is different:

There are chances that the patent examiner is misinterpreting the prior art incorrectly or too broadly. Or they may be applying the prior art references wrongly. What you can do in such a scenario is to argue how certain claim features are not found in the referenced prior arts. The examiner will then review your arguments, and two things can happen. 

  1. They can review your arguments, agree with them and find new references (or)
  2. Disagree with your arguments and maintain their stance on rejecting your patent. 

Here is what you can do in this scenario. Take the drawings that have been filed in the initial application and highlight a component or a processing step which isn’t shown in the records. You can ask the examiner-”Our invention has X, can you find X in the art of record?” 

  1. Adjust or modify your claims:

There are times when the examiner wants you to make the application easy to understand, so they would advise you to phrase your claims differently. If you make the changes that they have suggested, then the issue could be resolved. 

How you phrase your invention on your patent application has a huge impact. Using irregular terminology or slang is one reason why many patent applications get rejected. Having the advice of an experienced IP team will solve this issue as they are more careful while writing down your invention in the application and are better equipped to handle the entire process.  

  1. Show how your invention works:

There are times when the patent examiner gets back with a comment that reads-”Does the invention work?” 

Here’s what you need to do in this scenario. 

  1. Explain the landscape of relevant technology which existed before your invention.
  2. Explain how your device works.

One of the best ways to explain your invention clearly is to make a video where you outline everything about your invention. If you can schedule a direct meeting with the patent examiner, you can describe your invention directly. 

  1. Check if your patent application is complete:

The first thing that the patent office will review is your application and see if it includes all the necessary parts. To move your application to the next process, the examiner will even go through the technical aspects of your patent application. 

For your patent application to be complete, the following should be included:

  1. At least one patent claim
  2. Inventor’s oath or declaration
  3. Payment for filing the application
  4. Drawings to describe the invention, if necessary

If any of these are not met, the patent office will get back to you saying that you have submitted an ‘incomplete’ application. 

Conclusion:

Your objective should be to convince the patent examiner to allow your claims by modifying them and also by presenting your case properly. It may take a bunch of responses before you can find a middle ground and get your patent application approved. Do not worry about getting your patent rejected, you can make changes to address the objections raised by the examiner.

If you are looking for a one-stop IP solution, ResearchWire is more than happy to onboard you as a partner.When you are not sure about what to do when the patent examiner rejects your patent, get in touch with us- and we can help with next steps.

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Everything You Wanted To Know About Invalidity Search

What is a patent invalidity search?

 

Also called an opposition search, the objective of a patent invalidity search is to identify patent and non-patent documents that may impact the claims that are present in a specific patent. When a competitor attacks you with patent infringement claims, your best resort is to prove the patent invalid. A patent validity/invalidity search is also done to calculate the strength of a patent to see how much it can guard itself against claims of validity. 

 

Using the results from this search, you can block patents and validate the claims of a patent portfolio which can be useful during a licensing or a company acquisition process. An invalidity search is conducted by a defendant to invalidate a patent by conducting a prior art search. 

 

A patent invalidity search is performed for three important reasons:

 

  • To check whether someone holds an authentic claim to the patent
  • To invalidate claims of patent infringement
  • To search for patents before any new patent enforcement

 

How do you perform a patent invalidity search?

 

The first step towards performing a patent invalidity search is to establish the priority date of the patent claims. Disclosures that are publicly available before the date of the filing of the patent is considered to be prior art. Also, if a patent application has been published by you after the patent’s filing date, it will receive a prior art rank. 

 

You might not always get enough material to stab at your patent’s novelty, but patent validity search will give you an idea as to where to look for if there is an anomaly. Below are the steps that you should take while performing a patent invalidity search. 

 

  • Understand the subject:

 

You need to know which are the technical and patent issues so that you can fully interpret the claim during the validity search. Since validity searches are usually performed on patents that have already been allowed, you need to have a broad sense of the claims to find further relevant art. Read in detail about the prosecution history at the beginning of the search, including the file wrapper to interpret the claim which needs to be invalidated. 

 

  • Do not leave out even a small detail:

 

To conduct an invalidity search successfully, you need to pore through innumerable patents and literature documents. A thorough examination will include an evaluation of the specification text, figures, chemical formulas, tables, etc. The searcher should focus on a variety of matters that will be of relevance to cover most grounds, if not all. 

 

  • Conduct a broad search:

 

When thorough invalidity searches are conducted, the findings will help you make the right business decisions. Missing prior art could cost you millions in patent infringement suits or having to re-work the product. You need to gather all your resources and search to the broadest extent possible. Start with works such as patent office search reports, history of the prosecution, opposition proceedings, litigation proceedings, etc. 

 

  • Do not ignore non-English literature:

 

Even though the volume of non-English literature is not much, you should not neglect or underestimate its importance during your searches. 

 

  • Know when to halt the search:

 

The problem with invalidity searches is that there is so much information to gather and so many places to seek them from. What happens if you don’t know when to stop? You will end up extinguishing your resources and burn a lot of money, not to forget the amount of time you will end up wasting. Your search strategies should also mention clearly when exactly you will stop so that it doesn’t go on for a long time. 

 

  • Do reporting properly:

 

The final report should be submitted in an easy-to-understand manner. While it is tempting to cite all the resources, all these references might not be relevant to the client. Offer a brief interpretation of the results and add any other supporting information if necessary. Report the findings in a matter of fact manner instead of offering opinions as they can be used against your client. 

The final report for the search should include relevant prior arts, key features, search strategy, keywords, classes, key assignees, key inventors, and claim charts that map relevant prior arts with the features of claims. A detailed report will help you understand the validity or invalidity of the claims in the patent. 

 

Factors involved in a patent invalidity search:

 

It is different from a prior art search because of a few factors that are involved in a patent invalidity search. Let us look at them.

 

File wrapper information:

 

File wrapper, or the dossier content, provides the most updated information regarding a patent application’s progress. It includes information on the examination process, search reports, office actions, correspondence with the patent office, and so on. When you read the file wrapper, it will give you an idea about the aspects on which the patent has been granted or if there is any novelty feature for the patent. The searcher will be able to identify if a claim has not been identified by the examiner. 

 

A file wrapper will also tell you about the kind of search strategy that was utilized by the examiner. Based on this, the searcher can find references to invalidate the claims of the patent. 

 

Cited references:

 

Both patent and non-patent literature which have been cited for the targeted patent are called cited references. You can gather the cited references from the file wrapper. When the analyst goes through the cited references, they can see the ones that have already been used against the targeted patent. By doing this, it becomes easy to get an idea of the missing part to invalidate the claims of the targeted patent. 

 

Date Restriction:

 

To find out prior arts and prior right cases, Date Restriction plays a big part in the invalidity search. A prior art case is published before the priority date of the patent that is to be invalidated. Prior right cases are those which are published after the priority date of the targeted patent, even though their priority date is before that of the targeted patent. 

 

Conclusion:

 

With all that said, the first thing you need to do before conducting a patent invalidity search is to consider the patent’s filing date. With patent invalidity search, you might be able to find prior art which the previous examiner might have missed out on. If a business is challenging the patent of a competitor or is preparing for a defense against an infringement charge, then the ideal retort is this. 

 

If you want to find out the validity of a patent, reach out to ResearchWire, our expert analysts will be more than happy to take care of it. Our in-house experts understand the patent laws for different countries, and are adept at conducting an expert search. 

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How to file a patent in a few easy steps

Inventions have the power to change the world. 

A simple example would be the patent named “Navigation system using satellites and passive ranging techniques,” or the GPS. 

Can you imagine traveling these days without the help of a GPS system on your smart phones? 

When an invention is protected and the inventor stands to gain from it, that acts as an inspiration for every inventor out there to do more. That’s why protecting your invention is important. 

Getting your invention patented is the best way to protect your invention from others. If you have heard about how difficult it is to file a patent, then you probably are right. There are a lot of things that need to fall in place for you to get your invention patented. Thankfully, the entire process can be broken down, and thus becomes less complex than it actually is. 

 

Let us look at how you can file a patent in a few easy steps:

 

#1 Have a deep understanding of your invention:

The first step towards getting your patent is to ensure that you know your product inside out. What part of the invention makes it unique and useful? Once you are clearly aware of what makes your invention worthy of getting a patent, the next step is to consider the scope. You need to find out if there are other ways to invent your product. Write down all the other ways of making your invention work, even if they are not the most ideal way to do it. 

You need to find if your invention has a broader application. If that’s the case, then you need to do more modifications to narrow it down. Doing all of this will ensure that you will be able to protect and will also benefit from being aware of the full scope of the invention. Your patent application will be tighter and more likely to be approved by the patent office.

 

#2 Keep a record of how you came up with the idea:

Make sure to keep a record of how you arrived at the idea and the step-by-step process that you took to come to this stage. A written record like this can actually help your case if you face any issues and it even helps bolster the creative process. Write down everything, from the changes you made, corrections, mistakes, and even the slightest line of action. 

Keep records of who has been given access to your idea. Ensure that all of these people have signed a Non-Disclosure Agreement (NDA) which specifically states that the rights to your idea and their work on your idea are all yours. Hire a patent firm and make sure that you get the NDA drafted by their lawyer so that there are no loopholes which might eventually come to bite you. 

 

#3 Does your invention qualify for patent protection?

Ideas cannot be patented. Everyone knows that. So if you want to protect your invention, you need to show the patent office how exactly it works. For an invention to be patentable, it must be new, non-obvious, and useful. 

New means that the invention cannot be known, used, described or patented before the filing date of your patent application. 

Non-obvious means that the invention should be significantly different from similar inventions which are already known. 

Useful means that the invention is useful, as in, a chemical, mechanical or electronic invention. 

 

#4 Patent Search:

Doing a patent search will help you figure out if your invention is new. Searching for prior patents and going through previously published patent  applications will assist you in understanding if the patent is patentable. While a patent search isn’t really a must, it will help you determine the proper scope for the patent application. 

If you plan to do patent search by yourself, we will advise you against it as it requires technical expertise and complex tools that only an IP firm will have. Do remember that the patent office will conduct its own search after you file your patent application. 

 

#5 How do you want to protect your invention? 

File a provisional patent application at first. This offers you protection in case someone says that they had the idea before you did. You can even take a year after this to file your patent application. During this period, you can add claims to strengthen the prototype that you have built, but you cannot add anything new. 

Let’s say you have added a piece of technology or something that adds more firepower to your invention, then you need to file a new patent application to add them. 

There are three main types of patents: Utility, Design and Plant patents. You have to figure out the right patent type for your idea. 

Utility patent- It is an exclusive right that is granted to an invention which doesn’t allow anyone else to profit from the invention without the inventor’s permission. 

Design patent- This type of patent is usually granted if the product has a unique configuration, unique surface ornamentation, or both. 

Plant patent- This patent protects a new and unique plant’s key attributes from being copied, sold or used by others. 

 

#6 Write your patent application:

You need to prepare a specification that also includes an abstract, summary, background, detailed description, conclusion, the scope and so on. Patent applications are a complex affair if you are doing it by yourself. They have several parts, and each of these can be rejected for many reasons. Ensure that you double and triple check what you have added in your patent application before sending it. A mistake might end up costing you a lot of money, more importantly, a lot of time too. Drafting the right patent application requires a lot of practice and technical know-how. It is strongly recommended to hire an IP firm to take care of your patent application. 

 

#7 Wait for the patent examiner’s response:

For your patent application to be processed, it takes at least one to three years. Make sure you get your application right the first time itself as you do not want to find that your application has been rejected owing to mistakes that could have been avoided. One patent examiner will be assigned to your invention and if you ever receive any communication from them, ensure that you respond to it immediately. 

If you have an attorney, the patent office will reach out directly to them. You can also get things expedited by arranging an interview with the patent examiner. It will help clarify the concerns they have about your invention, if any. 

During this period of time when you are waiting for a response from the patent office, make sure you are working on the business side of things. Since your patent is pending and the invention is protected, you can still talk business to interested parties. 

 

#8 “Notice of Allowance”:

The patent office will issue a “Notice of Allowance” if you are going to receive the patent. After you pay the required Issue Fee, you will receive your patent approximately after one to three months.  Once your patent is granted, your invention or design will be protected anywhere from 14 to 20 years, depending on the patent that has been granted. 

After you receive the patent, make sure you keep the patent alive by paying the maintenance fees. 

 

Conclusion:

Above are the steps using which you can file the patent easily. Unless you are 100% sure that you can handle the patent application process because you have dealt with it earlier, do not do it by yourself. If you still plan to do it by yourself, make sure you scrutinize each and every point that you add with excruciating detail and thoroughness. There cannot be any lapse because that would mean that the patent office will get back with a rejection. It can be a terrible cycle if you do not get the application right in the beginning itself. 

Get in touch with Researchwire’s patent experts who will help you with filing your patent application if you have an invention that you think deserves formal protection. 

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HOW TO SPEED UP THE PATENT PROCESS

32 months.

That’s the average time taken to obtain a patent from a patent office. 

In this cut-throat world of business, that’s a lot of time. There are a number of factors that affect this time duration. From patentability searching to application drafting, filing, and so on, all of these take up time. The patent process can be an excruciating wait if getting your patent ready will mean immediate business results for you. 

Patent offices are looking over thousands of patent applications. Ensuring that each one of them meets all the formal requirements takes a lot of time.  There are certain fields where getting a patent in an accelerated manner becomes pivotal to protect their R&D efforts. 

A reason why patent applications are not quickly approved is because the examiners want to ensure that they get it right. Any lapse from their part can result in a lot of damages to the business that has filed the patent application. 

 

Why should you speed up the patent process?

When you speed up the patent process, it can immensely benefit your business. Here are some of them:

  • Competitive advantage: Having a patent issued in your name offers you a great amount of protection when compared with just saying that your patent is pending.
  • Licensing: It can be an additional revenue and a patent awarded to your name will give you immense leverage during discussions on royalty and licensing.
  • Enforcement: There is no way to enforce your patent rights against infringers unless you have the patent issued in your name.
  • Raising money: When you do a solid patent portfolio analysis, your prospective investors will be able to trust in your business more. It will help with raising funds for your venture. 

 

Here are a few steps that you can take to speed up the patent process:

#1 Write a clear patent application:

The best way to reduce the chances of any delay in your patent approval process is to be excruciatingly thorough when you draft the application. Do remember that many applications are being handled apart from yours and you need to reduce as much friction as possible for them. 

Before you send the patent application, make sure that you do prior art search. The objective of prior art search is to ensure that your invention is new and non-obvious. By doing prior art search, you will be able to identify the closest prior arts, thus helping you define the scope of protection in your claims. It can even reduce your prosecution time as it will require lesser office actions and claim amendments.

When you write the patent application, describe the invention, how it works and what makes it a new invention and so on, in detail. If there is something that makes the invention unique, write about it in detail as well. It is important that you have a clear understanding of what makes your product ‘patent’ worthy. 

If you end up receiving a notice asking for more clarification, then ensure that you respond to them immediately without a delay. 

 

#2 Petition to Make Special:

It is possible to request that your application be given special privileges so that it can be expedited. You need to qualify to make your petition special. Here are the categories, the applicant should qualify for at least one of these:

Age: If any of the inventors is 65 or older, you can ask your attorney to get this petition filed.

Illness: If one of the inventor’s health is “such that he or she might not be available to assist in the prosecution of the application if it were to run its normal course,” then you can request for the patent approval process to be expedited. 

Invention type: If you want to make the petition special regardless of the age or illness of the inventor, here is the criteria. The patent application that you file should be for an invention that does the following:

  1. Helps fight terrorism
  2. Increases the quality of the environment.
  3. Helps in the conservation of energy resources

 

#3 Be well prepared:

Once your patent application has been submitted, it may take years before you even get a sly nod from the patent office. You need to keep this in mind when you are about to file the patent application so that you have a strategy in mind to tackle any unforeseen delay. Make sure you are aware of all the examples, technical terms, and how you intend to negotiate your rights with the patent office. 

There are six months for you to respond to the patent office before you are supposed to start paying fees. Have your team ready to respond to the questions as soon as there is one. Every single day’s delay will also rack up your fees. It is a lose-lose situation if you are not well prepared. 

 

#4 Communicate with the patent officer:

When it comes to patent applications, it makes sense to communicate directly with the patent officer. Instead of sending emails back and forth, a face-to-face conversation will clear up things faster than you could imagine. Or even a video call would suffice. Instant communications will also help you avoid any misunderstandings. 

Even your examiner wants to get done with your patent application because it is his/her job. It is in the interests of both the parties to pick up the phone and have a conversation. When you talk to the patent examiner, hear their side to understand their view of the invention. More often than not, patents are technical, but the examiners need not necessarily be able to understand some of it. Having a one-to-one conversation can help clear the issues that they are facing and it will be easy for you to explain the invention without any jargon. 

 

#5 Original claims should be reasonable and few:

When you file broad patent claims, it is good for your business, but patent examiners prefer if you have claims that are narrow. There are high chances that a broad patent claim will cover more than what was invented, and that is a turn off for patent examiners. Keep in mind that you should make your invention sound novel and the non-obvious features of your technology should be clearly spelt out. This will help immensely with the fast tracking of your application. 

There are time constraints under which patent examiners work since there are a lot of patents that they need to pore through. When your claims are narrow, they are more likely to be cleared by the patent office. 

Here’s a tip- File narrow claims first so that you can cover the core elements. It will help in getting the patent fast tracked. After this, you can file for continuations so that you can cover every future application of your technology. 

 

#6 Use special programs to fast-track your application:

There are other ways to speed up patent prosecution as well:

  1. Prioritised Patent Examination Program
  2. Patent Prosecution Highway (PPH)

The Prioritised Patent Examination Program gives a utility or a plant patent application priority which allows a final deposition within twelve months. It offers special status and has fewer requirements, and it also doesn’t ask for a pre-examination search. 

PPH fast tracks the examination of the patent applications in participating countries with claims that have already been allowed by a foreign patent office in a corresponding patent application. When you receive the final ruling from the first patent office where you have filed your patent application, you can ask for a fast-track examination of your claims in the corresponding patent application pending in the other office. 

 

#7 Hire an IP firm: 

More often than not, it is best to get the help of experts instead of trying to do it yourself. Get the much-desired clarity by talking to an experienced Intellectual Property firm who will be able to evaluate your unique predicament and you offer the right solution. There is no one-size-fits-all solution when it comes to speeding up the patent process which makes it difficult for those who are not privy to the workings of patent offices to do the right thing by themselves. 

 

Conclusion:

You have to remember that the patent office and examiners are there to help you. If you follow the seven strategies that we have listed above, you will be able to speed up your patent application. Filing a patent application and getting it approved in a time that you want requires a lot of things to fall in place. Concentrate on things that are in your control and do it in the right way. 

ResearchWire is a leading intellectual property consulting company that takes care of all of its client’s IP needs. Our IP experts have immense domain and industry experience, that’s how we have been able to add value to each of our clients. If you are looking to speed up your patent process, we will be more than happy to help you with it and guide you in the right direction. Get in Touch

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IP Best Practices in the time of Covid-19

IP Best Practices in the time of Covid-19

 2.8 million. 

That’s the number of patent applications that were filed at the IP5 offices (IP5 is the name given to a forum of the five largest IP offices in the world) in 2020. Also, 1.3 million patents were granted by the IP5 offices in the same year. The year 2020 has been unprecedented because of a strain of virus called Covid-19 that has wreaked havoc across the world. 

The world of IP has faced major setbacks during these turbulent times. Covid-19 has affected almost every industry that you can possibly think of, and businesses need to have a trick or two up its sleeve to make things right, or at least get back to normal. Even having to operate majorly in an online-only tech-based environment has put pressure in the existing systems, and on the people running it. It has been more than a year since the term Coronavirus has become a mainstay in our lives, but the repercussions from it are far from over. Also, the virus is still there. 

 

Below are some of the best IP practices that businesses can follow during Covid:

 

#1 Review your IP inventory:

Make a note of all your patent, trademark, copyright registrations, pending applications, and any renewals and deadlines. Write down all the confidential information that gives your company a competitive advantage. 

Here is what you need to do:

  1. Write in detail about the confidential information in a separate file
  2. Name the stakeholders who have access to it and how they can access it.
  3. List out the measures that you have taken to keep the information confidential.
  4. Ensure that you are in a position to meet any renewals or deadlines
  5. Do check for any royalty agreements and see if the payments are being made on time. 

Once you do all the above, you will know where and how your assets are parked. It will allow you to take immediate actions if necessary. 

 

#2 Be up to date with the happenings in the world:

The pandemic has affected the day-to-day operations of patent offices across the world. While some of them are in a complete state of lockdown, others have adopted a hybrid structure with respect to filings, physical hearings, procedural compliances, and so on. 

Businesses that are looking to file their trademark or patent application internationally should consult with their IP firm to get apprised of the various rules that are being followed this time. World Trademark Review that constantly updates the measures taken by IP offices during this time. 

 

#3 Evaluate your product strategy:

There is no doubt that the pandemic would have caused a seismic change in how consumers behave. Everything from their buying process to even reviewing and searching patterns will change. Find out the changes in user behavior with the help of user surveys, focus group discussions, face-to-face interviews, 3rd party agencies, and so on. 

Analyze the results to find out which are the products in demand. Build these products with the end consumer in mind. Make sure that the products are created with innovation and diligence at its core so that even the consumers are able to emotionally connect with it. 

 

#4 Leverage international filing protocols:

Agreements such as the Madrid Protocol and the Patent Cooperation Treaty (PCT) have made it possible to streamline IP filing and search procedures, thanks to making the information available in a centralized database. Thanks to the Patent Cooperation Treaty, major expenses can be deferred for international filings, not to mention the time that is saved in going after this. 

 

#5 Keep strategically investing in IP:

The new normal doesn’t mean that one should go entirely on the defensive and not engage in innovation at all. In fact, innovation is at the core of adapting to the new normal. Businesses should make use of technologies like automation, machine learning, internet of things, etc. to reduce the Go-To-Market time and monetize the product. It is also wise to assess your existing protocols to look for IP that has untapped potential. 

 

Despite the challenges that all of us are witnessing at this moment, one can safely assume that there will always be opportunities. If you don’t look out for them actively, it will not be possible to seize them. The opportunities will not only be limited to finding new areas to innovate, it could also be about acquiring IP from a competing firm that is looking to pivot or monetize their portfolios or finding a means to improve the strength of your present portfolio. If you keep looking hard enough, you will eventually stumble upon something worth the pursuit. 

 

#6 Manage your legal spending wisely:

Having good counsel or an IP firm to help you out immensely, especially during these troubled times, is a wise strategy to indulge in. You can let go of assets that are not important to the company anymore. 

By choosing to let go of IP assets that are no longer valuable, you will enjoy the following:

  1. Won’t have to spend time in extending the validity of the patent.
  2. Avoid paying maintenance costs.
  3. Avoid paying fines for forgetting to comply with regulations.

Do not hesitate to hire an IP firm assuming that it would increase your costs, they will be able to offer you the best advice that will help you capitalize on your existing IP while minimizing your risk. The IP firm might even find ways to increase your revenue through the IP assets you have. 

 

#7 File single-class trademark applications:

Businesses should make it a point to register their brands or marks which are not too descriptive in nature around the world, especially in areas where you plan to expand. You can file single class applications as it will reduce the filing and registration maintenance fees. When there are multiple classes in your application, the higher is the risk of an opposition. On top of that, single class applications are easier and faster to register, and less expensive. 

 

#8 Protect your copyright/design:

The reason why we would like to specifically insist on protecting your copyright and design is because most businesses view it as an extra expenditure. The truth is that these forms of IP can be used to protect innovation. Make sure that the agreements and compliances are in order and updated. 

 

#9 Be investor ready:

Even if you are not expecting a windfall in terms of investors knocking on your doors, you need to be prepared for such a situation. Businesses should proactively take steps to protect and safeguard their IP. It offers an assurance to the prospective investor that you have lucrative IP assets.

 

Wrapping it up:

During these uncertain times, businesses should strategically look at all their options. There is no room for any uncertainty or not having a plan in place. They should protect their IP at all costs by filing and enforcing their IP rights, plan effectively, use the right legal tools, hire an experienced IP firm, and so on. 

The immediate future will bring us ample opportunities. Businesses which have a deep understanding of its IP assets and follow the best practices for protecting and managing its assets will be able to rise to the challenges posed by this pandemic and come out a winner. 

When you have a strong IP firm providing you sound advice, you will be in a good position to tackle this Black Swan called Covid-19. By taking their advice, you can effectively balance your IP portfolio and wade through this uncertainty with little to zero troubles to your brand or IP. 

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How to valuate patents

How to valuate patents

To thrive in the market, you need to aggressively innovate. Otherwise, you will not even be able to survive, forget about thriving. Innovation is what made Honeywell go from a retailer of heat regulatory systems to developing smart technology for climate regulation and home security systems. Lack of innovation is what forced the likes of Compaq, one of the largest PC sellers in the world during the 90s and 80s to shut shop in 2013.

Google bought Motorola Mobility and its 17,000 patents for $12.5 billion to protect its Android mobile OS from competitors. Thanks to its 1,100 digital photography-related patents, Kodak was able to sell those patents for a dozen licensees for $525 million, although it was expected to fetch much more than that.

The gene-splicing patent of two Stanford professors that was world-altering enough to launch the biotech industry, generated $255 millions. Within 24 years of the patent, more than 2,000 biotechnology companies had been launched.

Did you notice the difference in the monetary value of the patents? Everyone knows that all patents are not equal, some are more valuable than others. There are different factors which contribute to the monetary value of patents.

Your intelligence assets are usually in the form of patents. In this dog-eat-dog world of litigation and patent trolls, you need to secure your intellectual assets. Patents provide protection for businesses from their ideas being stolen by their competitors. Since it is an intangible asset, assigning a dollar value to it can be difficult. We can use a variety of methodologies to see if a patent would be a cash cow or not.

What are the instances when you need to assess the value of a patent?

Only when you know the value of your patents would you be able to make use of it appropriately. Knowing the valuation of patents becomes important when there are business transactions/situations such as the ones below:

When there are negotiations while selling or licensing intellectual property rights as it is essential to reach an agreement in good faith.
Patents can also be used as security for bank loans, it is imperative that you show them that the IP asset is of a particular value.
Organizations are legally bound to report their assets, even of those that are intangible.
For your internal team when they want to define strategies for patent protection.
When there is a patent conflict or dispute, in situations like this, knowing the correct value of the IP will enable you to claim fair damages.
While trying to evaluate the value of the company for an M&A, JV or when filing bankruptcy.

How to find the value of patents:

Businesses use different methods to find the value of patents, but most of them can be classified into two types: 1. Quantitative approach and 2. Qualitative approach.

The quantitative approach uses measurable data to calculate the value of patents while the qualitative approach relies on the prospective uses for a company which owns the patent.

Quantitative valuation includes metrics like the cost in obtaining the IP, cost of similar market transactions in the industry, cost of creating a similar technology, and so on. Qualitative valuation includes assessing the IP through a non-monetary lens, such as its technological impact, strategic impact, brand loyalty, and other intangible metrics that will help you come up with a credible value for the patent.

Quantitative approach to valuate patents:

There are four methods which are widely used to find patent values in the quantitative approach. We will talk about each one of them in detail, below:

Cost-based method:

The cost-based method works on the assumption that the costs incurred while developing the IP is directly related to how much it is worth.

Here, the replacement cost of the patent or the amount equivalent to replace the protection right on the invention is considered to be the cost of the patent.

In other words, how much would be paid to replace the patent is considered to be the replacement cost. Or how much would be spent in developing a similar patent is assumed to be the right value.

When we calculate the expenditure, we base it on the current prices. Some of the other cost sources that are included in the cost-based method are: material costs, labour costs, overheads, opportunity costs, profits that are lost when you bring it to the market at a later date, etc.

Income-based method:

In this method, the value of the patent is calculated based on the income that it generates for the patent owner. Even the cost savings that owning the patent will provide is considered when using this approach. When a business or an inventor is developing a product, it is with the hope that it will help increase their profits or at least save them a tonne of money.

Market-based method:

In this method, you need to keep an eye on the market transactions and see if there are any assets which are similar to yours. The comparison between your asset and a similar asset is made with regards to its utility, perception, technical superiority, and so on.

How can you find such data?

It will be available in the annual reports of companies.
Databases where royalty rates are available
Industry-specific publications
Court decisions where damages were discussed

The above sources can give you a fair idea of the rates. Based on the numbers that you get from these sources as well as based on the present market situation, you can arrive at a value that is reasonable to all the parties involved.

Option-based method:

It uses the options-pricing theory to determine the value of the IP. This method considers the options and opportunities related to the investment. When using the options pricing model, patents are valued using financial options. The key point in using a financial model to find the value of a patent is that even stock options provide exclusive rights to the owner while excluding others from using it (that’s how patents work too).

Qualitative approach:

In the qualitative approach that is used to find out the value of patents, there is no reliance on pure financial data. There are a multitude of factors that are used to determine the value of the patents in a qualitative approach. It could be assessing the various aspects that affect the value of the patent. Here are three methods that are widely used:

Value indicator-approach:

It uses rating methods like IP Quotient where the strength of the portfolio and the surrounding variables are assessed. Using this analysis, a qualitative rating is attributed to the patent. This data can be used to draw internal comparisons in assessing the value of the patent, but it cannot give you a decisive number.

Competitive advantage:

In this method, the competitive advantage that the business will get by owing the IP asset is taken into consideration. If it is just bragging rights, then it wouldn’t make any difference to your bottomline. Below are a few questions that you can ask:

Does it cause a significant shift in how your customers perceive you?

Will it increase sales?

Does the IP asset better the quality or performance of your product?

Rating approach:

Businesses can use a variety of parameters to assign a dollar value to patents. You should also determine the type of function that the IP is going to play for your business. Does it align with your objectives for the near future?

Qualitative methods are usually used for internal purposes as the number is arrived without taking financials into consideration. It is a great method if you want a sense of how it will fit into your portfolio by giving you an idea of the opportunities and risks involved. There are more common-sense inputs than hard data which will make a much better case to come up with a number.

Conclusion:

Now that you know that there are different methods which can be used to find the valuation of a patent, the method that you eventually choose should be binding on your business objectives. As seasoned professionals in this area, we would advise you to employ more than one method so that it is easy to corroborate them. Finding the value of IP can help you make significant business decisions which can alter your entire business trajectory.

If you need help with finding the value of a patent, get in touch with the Research Wire team and we will be able to assist you. We have processes and workflows in place to arrive at the value for a patent based on our extensive experience over the years.

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