By Douglas L. Lineberry, shareholder, McNair Law Firm
Like the lucky dog that has finally managed to latch onto a car, patent owners sometimes face the question of “We have patents; what do we do now?” While having the bumper, or patent, in your grasp seems like the end goal, it really is a growth opportunity. By properly leveraging your patent portfolio and using your patents to work with others in industry, you can expand your business.
A valuable and strong patent portfolio is developed by tracking and aligning patent filings to secure rights in your technology segment via protecting your product lines and innovation streams. The strength of a patent portfolio is based on the probability of use in the industry; ease of proof of the claims; and perceived risk of uncovering prior art/prior use that undermines the patent(s).
Exploitation of a patent portfolio involves a multifaceted approach. Four general exploitation rules apply: (1) keep high-value patents that impact your desired business sector(s); (2) license high-value patents that apply outside of your desired business sector(s); (3) sell low-value patents that apply outside of your desired business sector(s); and (4) dispose of low-value patents with little applicability.
A portfolio may be defensive in nature. It can help a company level the business playing field with competitors, provide leverage for warding off lawsuits, or increase bargaining power for negotiating royalty rates. A portfolio may also be offensive in nature. It can be the basis for alleging infringement against third parties. It can increase licensing revenues by allowing third parties partial or exclusive rights to certain technology segments in certain business areas. A portfolio may also be created, or purchased, to enable entry into a new technology segment discrete from your existing business.
Portfolio exploitation is not limited to direct business applications. Instead, strategic use of patent filings enables companies to direct claims to a specific competitor or field of use, drafting narrow claims to avoid newly discovered prior art, as well as pursuing broader claims to provide more comprehensive coverage of new developments and innovations. Further, active portfolio exploitation may be used not only to obtain patents but to provide a competitive edge. This can be done by patenting both the owner’s technology as well as technology relevant to competitors’ businesses.
Robust exploitation not only looks at the product being protected but how the protection fits within its technological ecosystem and how to exploit the patent’s impact on distribution channels and markets. Key technical components that are necessary to compete in certain markets may be protected and then exploited. Importantly, portfolio exploitation is not limited to the U.S. Companies should evaluate whether to file foreign applications by considering where competitors are filing, where potential investors are doing business, where you sell/manufacture/distribute your product, and where your competitors want to sell/manufacture/distribute their product.
With respect to Joint Development Agreements (JDAs), a patent portfolio enables a party to bring pre-existing intellectual property to a project. Careful use of the portfolio via licensing the pre-existing intellectual property may allow the other party to help jointly develop new and exotic innovations. However, be sure to consider how the license of pre-existing intellectual property will apply to commercializing the results of the JDA. Importantly, how the newly developed intellectual property will be folded into an existing patent portfolio should be addressed. While it may seem a simple matter to jointly own any developed patents, one must consider that joint owners may make, use, sell, offer to sell, and import the patented invention without the consent of, and without accounting to, the other joint owner(s). The joint owners may also freely license to any third party without the other joint owners’ consent. Further, enforcement is complex, as all owners must join in a lawsuit to enforce the patent. Thus, expectations of how the parties respective portfolios will function long after the JDA has terminated should be negotiated up front.
Obtaining a patent is just the beginning. Proper exploitation of patents once acquired separates the novice from the master. Further, JDAs revolving around pre-existing portfolios can help lead to significant joint development opportunities, as long as the limitations of the parties’ uses of the other’s portfolio are considered and negotiated beforehand. Indeed, entering into a JDA may open a company’s view as to how to best apply their portfolio in their current and future markets.
Doug’s practice focuses on intellectual property representation and assists clients with protecting intellectual property through patent, trademark, and copyright prosecution, as well as intellectual-property litigation. Doug has experience drafting and successfully prosecuting patent applications for various fields, including mechanical, medical, and chemical technologies. He helps clients with establishing and protecting trademark portfolios, guarding same against improper third party use, and conducting enforcement actions. He can be reached at [email protected]