A well respected patent lawyer in the technology field once said that “90% of patents held by businesses backed by venture capital investors are worthless.” How could this be? Surely savvy venture capital investors are experienced in assessing the value and strength of patents, isn’t this part of their job? Campbell Ventures has discovered that this is not always the case.
The old adage “there is no point applying for a patent unless you are not prepared to defend it,” still holds true but defending a patent in court can be a very long and expensive process. Campbell Ventures has recently reviewed a number of process based patents held by technology businesses and many are almost impossible to enforce. Commonly the patent focuses on the internal details of the product and the process. In many cases it does not clearly highlight the truly Unique Selling Points (USPs,) features or intellectual property that sets the patent aside from its competitors’. But more importantly, little thought has been given to how the patent can be enforced and how breaches of the patent can be detected. This is often not apparent from just reading the patent document.
Strong patents exhibit a number of common characteristics which greatly benefit the owner to quickly detect if another party has breached the patent. These include:
- The end product or process output exhibits clear and measurable characteristics or features that can be undeniably linked back to the process and patent.
- The characteristics and features of the end product/ process output can be very quickly and easily assessed to determine if it has been produced by the patented process.
To illustrate these points here are a couple of very strong patent examples where the need of enforcement and detection has been thoroughly thought-out to strengthen patent:
Case Study 1: Water Jet Cutting Technology
This example includes a technology that can cut delicate and temperature sensitive materials to micron tolerances. An application of this technology would be to dice semiconductor wafers to produce silicon chips. The use of fine mechanical saws can damage the complex sub-micron structures of the latest generation of semiconductor devices. This technology uses water jet and laser technology to cut the silicon wafers with great accuracy and without damaging the edge structure of the chips. The patent is strong because the smooth finish of surfaces on the edges to the diced chips is unmistakably created by a water jet/ laser process. The end processed product therefore exhibits features that could easily and quickly be associated with the patented technology and be defended.
Case Study 2: Mobile Phone Antenna Technology
This example relates to a novel mobile phone antenna technology that is based upon “fractal” technology. Fractal technology relates to a specific two dimensional design of the antenna’s electrically conductive pattern. The specific ratio of the conductor lengths in the antenna design creates the fractal antenna which has certain advantageous properties over competing technologies. In this case it was very easy for the patent owner to detect if his patent had been infringed by mobile phone/ antenna manufacturers because all he had to do was to purchase a mobile phone, dismantle the product and measure the physical conductive pattern of the antenna. Again, a very simple, fast and defendable approach which strengthens and adds value to the patent.
Clearly not all inventions and particularly processed based inventions have the ability to easily associate the end product/ output with the process. Another approach that could be taken in this case is to examine the inputs to the process. Inputs to the process can include for example materials, consumables and energy. Are the inputs (or combinations of inputs) to the process unique and different to competing approaches? Can they be measured and observed clearly? Could the patent and intellectual property be structured around the unique use of the inputs to the process, as well as the process itself? This was the conversation that I recently had with a manufacturer of industrial capital equipment that had patented a process which he had commercialised into a machine for industrial use. The existing patent was written around the internal process in the machine which could only be seen by taking a machine apart. Clearly very difficult to enforce the patent if you feel that a competitor has infringed your technology.
The key conclusions are:
- Before you commit to investing in a patent look hard and long about the ways you might enforce it. Can the outputs of the process be unarguably linked to your process? Can this be assessed quickly and easily with limited cost to you?
- Does your process use unique inputs? Could the patent be structured around this? Can the use of the inputs be observed and monitored clearly?
- Use a patent layer who will help you build-in the above “defence mechanisms” from the start and not one that will only “get the patent through.” Remember there is no point in investing in the time and money to file a patent if you cannot defend it. Use a patent lawyer who has experience of your sector and ask him in detail how you might defend your technology.
To discuss on a strictly confidential basis your intellectual property strategies and how this article could impact your business please contact Mike Campbell, Managing Director directly on +44 7771 615641 or by email on mike@campbell.pwebs.co.uk.
For further information regarding Campbell Ventures’s services and expertise please refer to our websites campbell.pwebs.co.uk and www.china-business-experts.com.