• An Informative Read from Carlos Lee, Director General at EPIC
• http://www.epic-assoc.com/wp-content/uploads/2016/12/EPIC-IP-Workshop-GJE-Coventry-UK-2016.pdf
• Published on January 20, 2017

In October EPIC organized two IP workshops in the UK (Coventry) and Germany (Berlin). In a follow-up interview with Senior Associate European Patent Attorney Ruth Walker from GJE (Ruth.Walker@gje.com) we provide some short statements as food for thought for small photonic companies. Any questions? Please enter them in the comments section or email the authors. Or email marketing@gje.com if you'd like to receive the IP newsletter.

1/ Trade secrets versus patenting, what are some features/benefits of each?

The trade-off you make when filing a patent application, to potentially obtain up to 20 years of monopoly rights to exclude others from practicing your invention, is that details of that invention will be published around 18 months from filing. That means your competitors have the information needed to build on your innovation, often before you have a clear indication of whether your patent application will be granted. It is therefore necessary to think through the pros and cons before deciding whether to apply for patent protection.

If you think it’s possible to keep your invention secret (i.e. if it can’t be reverse engineered), then putting in place strict policies and procedures to keep it that way may be the best strategy. Some investors are keen to see that patents have been filed, but if you can explain you’ve made an active decision to keep your innovation secret, and put in place measures to secure your intellectual property that way, you will give them confidence in your IP strategy.

Of course, if you do have a patent granted, you then have the legal rights to pursue anyone using your invention for license royalties, or obtain an injunction against further use, amongst other remedies. You should consider however whether you are likely to have sufficient cashflow to fund such actions if they become necessary. Will you have exited via sale to a company with deeper pockets by then? IP litigation insurance should be considered both for defending your own rights, and the possibility that you might unwittingly infringe those of others. In the meantime, a pending patent application can have some value as a means of warning off competitors. It’s also a way of clarifying what IP you bring to the table when entering into collaborative ventures and investment rounds.

2/ What options does a small company have if a large multinational infringes its patents?

Obtain specialist advice as soon as possible; effective negotiation is key in these situations, and contacting the potential infringer (or their customers) yourself could mean falling foul of unjustified threats prohibitions. But don’t panic – you may be looking at a new revenue stream through licensing royalties if a settlement can be reached, or even the corporate buy-out you may have dreamed of. Even after a dispute has arisen, IP litigation insurance is available so if you really have to go to court, it doesn’t necessarily have to wipe out your bottom line.

3/ At what stage does the company need to develop its IP strategy?

IP strategy should form part of the business plan for any innovative company right from the start. Processes for identifying and logging when IP is created, and seeking advice on protecting it where necessary, should be built into the way you operate as early as possible. This can include capturing patentable inventions, trade secrets, database rights, industrial designs, trademarks, and copyright-protected material such as software code and product literature.

As the business grows, the IP strategy should be regularly reviewed and staff given appropriate training to ensure it is complied with. When you get to a significant funding round, investors will want to see that you’ve taken steps to make the most of the myriad kinds of IP any technology business produces, and also that you know when to cut your losses when it comes to protection that’s no longer cost effective as your business plan evolves. They’ll also want to know what steps you’ve taken to check that you have freedom to operate with respect to third party rights, to avoid any nasty surprises when it’s too late to turn back.

4/ How much effort/money should be spent?

There is no one size fits all approach to IP budgeting. It’s certainly worth investing in an initial meeting with a specialist at an early stage to ensure you’ve thought of all the angles. How much you should ultimately spend will depend on your business plan and how crucial protecting your IP is to securing a leading position in the market. IP spend won’t always result in positive gains, but you should consider whether failing to allocate a sufficient budget could result in devaluation of your company.

5/ Possible pitfalls for start-ups?

1. Missing opportunities to patent. This can be due to staff not being trained to understand that any public disclosure can jeopardise your potential patent rights, or due to a lack of a designated gatekeeper for innovations.
2. Failing to check you have freedom to operate with respect to third party rights. Even if you have your own patent rights, this doesn’t protect you if someone else has rights over another aspect of what you’re doing, or has a patent on the base technology.
3. Complicating patent ownership by involving third parties before an application has been filed. Dealing with a dispute is much more expensive than ensuring you’re clear on who owns what before a collaboration begins.
4. Continuing to spend on patents and applications that no longer have commercial utility. Getting a patent application granted usually takes several years. Even after grant, renewal fees must still be paid to keep patents alive. Keep notes on the products/processes your patents relate to so you can consider whether it’s worth continuing to spend money on them if and when they are superseded.