I’m always surprised to rediscover that many company executives do not understand that making their innovations public carries a risk. The risk is that someone can file an improvement patent that will effectively block continuous enhancement of their technology.
This means that the product you spent $5 million and 10 man-years to develop can be taken from you by someone who spent just $25,000.
The fact is that most (some say almost all) new inventions are improvements on known devices and technologies. If you search for the word “improvement” in Google patents, you’ll get about 2.2 million results.
Many improvement patents are short-term business assets. They’re filed to block others from doing business as usual.
Your innovations become public when you promote them for sale and or when you publish your patent. Everyone – your customers, vendors and competitors – can see what you are doing, and it doesn’t take long before someone identifies improvement opportunities or new applications. If that person recognizes your innovation’s sales potential, as you do, they are likely to apply for patents on these improvements.
Here’s the problem. Assuming you have R&D activities, a product pipeline, and a marketing strategy in the works, improvement patents filed by a competitor can shut you down.
What can be done? On one hand, nothing. You cannot prevent others from filing improvement patents on your technology.
On the other hand, a lot. You can manage the risk by taking pre-emptive actions. But first you need to understand the risk – how is it connected to your business, present and future? And you need to consider all of the risk mitigation tools that are at your disposal.
How do you prevent others from blocking a path you may want to take in the future? By managing the risk.
For example, timing is critical in IP protection. As the owner of the technology, you have the ‘first mover’ advantage:
You know your technology best – its advantages, its shortcomings and possible improvements
You know how your customers apply your technology.
You know your development roadmaps, and the new features you plan to introduce.
You know your technology’s potential use in other markets.
Further, you can reduce risk before you make your technology public – in other words, before you introduce your product to the market and before you file the first patent:
Prepare a long-term IP strategy that coincides with your business objectives.
Assess the IP landscape for your product and identify protection opportunities.
Consider ‘defensive publishing’ of minor improvements, to create prior art that prevents others from patenting them.
The actual tools and options available for protecting your current and future sales depend on many factors, such as your market environment, your business models, and the development stage of your company.
Cost is always the prime factor when deciding how to reduce the risks of getting blocked. But investing a little more in risk management can prove much less costly than remedying a blocked technology.
Gil Perlberg is an IP development business executive who specializes in the creation of high-value patent portfolios. You can contact him at gil@perl-ip.com.