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Patent your innovations

No one can argue against the power of a patent. Patents are integral to any technology company's IP strategy. But some would suggest that you patent all your innovations. In fact, as suggested by the statistics discussed earlier, some companies are currently pursuing this approach.

However, it is simply cost prohibitive to patent every idea. Even neglecting downstream costs such as maintenance fees, your initial cost (for legal and application fees) in a single patenting jurisdiction is $10,000-$15,000 for a relatively simple patent, and up to $25,000 for a patent of moderate complexity. If you want patent coverage in several foreign jurisdictions, you should expect to spend at least $35,000-$60,000, just for the first few years of coverage! At these prices it's important that you have a revenue or financial plan for each patent. There are some patents that are worth every penny of this figure, considering that they are fundamental to business lines worth millions in annual revenue. So go ahead and pay the $250,000 for worldwide, lifetime patent protection on these innovations.

The more challenging question becomes: are all your patents worth that much? Certainly the fundamental innovations that define your market and guarantee your margins are of huge value, but what about the incremental inventions, the new uses of your old technology, the many inventions that only build on your preexisting intellectual property? Perhaps you can patent everything, but is it really cost-effective and efficient? Is it really necessary?

Ignore your innovation?

Some firms do nothing with their innovation, but the risk associated with this policy is both obvious and enormous. Even so, most firms take this risky approach for a significant fraction of their inventions, and only 10-20% of their patentable ideas actually become part of a patent application! What happens to the other inventions? Deemed less important, or not worth the cost of a patent (correctly), or merely not very interesting to the scientist or engineer involved, the innovation gets shelved... and remains at risk. Such companies' survival depends on luck, or on their competitors sleeping at the wheel. The downside costs if you pursue such a policy can be huge! In using your own, unpatented technology, perhaps you infringe someone else's patent and are forced to pay damages and royalties - directly to your competitor. Or perhaps you discover the competitive patent yourself, and choose instead the pain of redesign, paying dearly in time to market, in R&D expenditures, and even in marketing costs for affected products.

Or maybe you were first to invent, yet your competitor got a patent anyway; then you would have to decide how much it is worth to invalidate the bogus patent... is it worth the $500,000 to $1,500,000 to get through the discovery phase, hoping to settle out of court? Is it worth the $1,500,000-$2,500,000 to complete the jury trial? And in the meantime, your business is stalled by temporary injunctions!

In today's IP climate, most companies recognize that doing nothing with their innovation is a recipe for disaster. Even postponing decisions on what to do with an invention creates significant, and often unnecessary, exposure. However, many companies still allow many inventions to be shelved - unpatented, unprotected, at risk.

Hide behind a trade secret

Another option is to try to keep your innovation as a trade secret. Trade secret law offers limited protection in circumstances where the innovation is not obvious to the public and where you can demonstrate that you put adequate effort into keeping it a secret. The value and enforceability of trade secrets is called into question by the significant increase in employee mobility and the ease of information transfer, coupled with a high legal standard for security measures and protective procedures, and the bent of the courts to protect employee rights. There is no trade-secret protection for innovation that can be reverse-engineered; a competitor can independently discover your invention and use it, or even patent it. In reality, with today's aggressive competitive intelligence tactics, your secrets of today may very well be your competitors' patent-pending products of tomorrow.

Trade secret protection is of value in a few situations, but it is simply inappropriate for the majority of your innovative efforts.

Publish a technical disclosure

So if doing nothing with your innovation is too risky, and trade secrets are unsuitable for widespread application, and patenting everything is cost prohibitive, what options remain? Fortunately, there is another way. Technical disclosures provide an inexpensive means to protect your freedom to practice your innovation, effectively reducing the significant cost of patenting and removing the huge risks of someone else getting a patent on your ideas. What is technical disclosure? Quite simply, it is the intentional and purposeful publication of innovation into the public domain. Thus, technical disclosures create prior art which can prevent a related patent from issuing, based on the typical requirements which demand that patentable innovation be new and non-obvious. With a technical disclosure (also called a defensive publication), your competitor cannot patent the invention, and you retain your freedom to practice your innovation.