Grade A Entrepreneurs

Google results: 139,000,000 for “patent; “46,100,000 for “intellectual property.” However, the significance level of these numbers may not be much higher than that of a googol in math.

When you are a startup, where do you start as far as IP is concerned? One simple, or “simpler” item on your priority list should be to get your “domain name,” which includes the generic & country code top-level domain names, and as many variations/spelling mistakes as you can think of. You may spend significant money, but if your business is successful, you do not want to have to negotiate with too many forgers and impostors. If the concept of your business evolves as you get deeper into your project, do not hesitate to add more domain names. 

What about the great ideas of trademarks that cross your mind during the design/concept/sketching phase? You may want to protect a few of them. Don’t rush, though. Early illuminations often hide the horizon or prematurely freeze the intricate thought processes that foster creativity – and in the end, trademarks are not just catch phrases that you think are cool, they are part of your overall branding strategy, which itself is part of your overall business strategy. 

This leads me to a great conversation I recently had with David Jakopin, an Intellectual Property attorney at Pillsbury. David has been involved in IP matters (ranging from litigation to strategic IP counseling) for twenty years. His non-jargonic way to talk has something to do with his background in Electrical Engineering and his Middle-Western “show me” style.

•  “What do you do when a startup comes to you for a patent?,” I asked him.
•  ” I ask them to first tell me about their business and their real priorities,” he responded.

David Jakopin

While quite a few patent attorneys would jump at the opportunity to get your business the minute you tell them that you want to patent your technology, David Jakopin recommends that you take your breath and consider this:

1. What is your purpose when you want to file a patent and how does it help your business?
2. Patent is one thing, but have you thought of your overall IP strategy? Is trying to protect your IP with patents a meaningful business strategy, or are trade secrets or copyrights a better way to proceed?

1- What is your purpose when you want to file a patent and how does it help your business?

“In a way, you can make almost everything patentable,” David says, “but is that where your real value is? What if your real value is in your ability to execute? Where do you fit in the overall industry landscape? The approach vastly differs depending on whether you are on a greenfield (yet, make sure that you are not deluding yourself) or in a crowded environment. When you are on a greenfield, patents can be a business priority. If you are in a crowded environment, you may want to consider your overall business plan. The question you must ask yourself is: Do I want to spend a lot of time and money getting a narrow patent? I tend to advise entrepreneurs to put their time and money in places they know are viable. Do you want to spend $15-20K on a patent application that may never issue into a patent, or do you prefer to give the engineers who create your product a symbolic salary? It’s unethical to encourage people to file a whole bunch of patent applications, spend a lot of money and let them discover three or four years down the road that the patent applications were rejected if you believe they don’t stand a very good chance of issuing as patents in the first place – unless the client understands the true landscape. When you file a patent, there is always the risk that it could be rejected, especially in crowded fields, so it’s important to look at this within your overall business strategy.” In the end, filing patents, strong, moderately strong, or even weaker must be part of a well-thought out business plan.

2- Patent is one thing, but have you thought of your overall IP strategy? Is protecting your IP with patents a meaningful business strategy?

“Patents are not on the whole thing,” David warns. “What you may want to protect are your inventions, know-how and ideas in general. You may want to think of a global IP strategy using several means that include patents, trade secrets, copyrights and trademarks.  You have a product strategy, a sales and marketing strategy or a financial strategy, you should also have an overall IP strategy even if you are in a crowded field. Then, multiple other aspects come into play.” David gave a few well-known reasons for this: Patents, copyrights, trade secrets and trademarks may increase the valuation of a company several years later down the road.

“Lots of startups can end up in a quandary,” David says. ” Patents will not cause a company to be successful initially; it is quality of execution on many fronts that results in success, when the company does take off, it’s better to have protected what could have been protected. When you start to sell your product, by statute in the US, you get one year to get your application filed for anything that is patentable within your product, but you do not have this one-year grace period for other countries. In the rest of the world, you need your application to already be on file. Filing a provisional patent can help, but can also give a false sense of security. The Patent Office considers you have made the invention only at the time you file the utility patent application. All the provisional is (although it is better than nothing at all) is a timestamp on whatever is disclosed at the time of the provisional. So if you filed your provisional a year ago and added a lot since then and have disclosed what you’ve added since the provisional, your utility will need to differ from the provisional (something that litigators will jump on), and international patent protection won’t be available for the additions since you disclosed them before filing any patent application.”

Bootstrapping your IP Strategy?

I asked David if he thought entrepreneurs can “bootstrap” part of their IP strategy. His response was “yes” and he even advises entrepreneurs who want to file provisional patents by themselves to make the extra effort of creating a few claims and go for a utility patent. The additional filing fees are not such a big deal (a few hundred dollars), and you can proceed in a way that minimizes legal fees. However, if it makes sense for your business to build a comprehensive IP strategy (and if you are – even moderately – funded), I advise that you talk to an attorney. For example, are you in the best position to decide by yourself or with your team what should be “patented” versus what should be kept as a “trade-secret,” or what should be copyrighted and how? I am not so sure! And if you leverage, as you should, the huge amount of open source code that is out there, you really want to know what you are doing – and not end up spending endless sleepless nights figuring out how to respond to the tons of questions that a corporation willing to buy your product or acquire your company will undoubtedly ask from you. If anything, a good IP attorney will help you instill good practices from the start.

I like David’s down-to-earth approach and his balanced perspective as he talked to a company I am familiar with. “I work in a law firm that offers a wide range of services,” he explains, “and I try to see how the IP strategy fits into the entity they are creating to make money. I am not over emphasizing the importance of patents to an extent that would just be a skewed viewpoint.” 

Marylene Delbourg-Delphis

Web site: http://www.pillsburylaw.com/david.jakopin