Presentation, hosted by MIT’s Venture Mentoring Service and its Technology Licensing Office, discussing how timing and strategy are important tools in patent portfolio building.

1. Using Patents for
Competitive Advantage
Presentation for MIT VMS
December 6, 2017
Bruce D. Sunstein
Sunstein Kann Murphy & Timbers LLP
© 2017 Sunstein Kann Murphy & Timbers LLP

2. Patents can provide a competitive
advantage, when built correctly with:
 attention to the path of business
development
 awareness of competitive threats
 knowledge of the prior art
2

3. Patents work by excluding
 A patent has value only when it excludes
others from doing something they really want
to do
 If no one wants to do what is patented, the
patent has no value
3

4. Patents work best in
portfolios
 A single patent covers only a single invention
and so excludes others only from doing one
thing
 If I really want to do what is patented, then I
will try to find another way to do it (by
developing a work-around)
 A portfolio of patents will make it harder for
others to develop work-arounds
4

5. Building a valuable patent
portfolio
 A portfolio has value only when it covers
what business wants
 (Remember: patents work by excluding)
5

6. What does business want?
 Imagine how a business can be based on
the technology
 What will be the business model?—what
value proposition can the technology offer?
6

7. Focus patent filings on the
business model
 Goal: the issued patents should cover technology
at the heart of the value proposition
 When the patents issuing in the patent portfolio
cover this key technology, then the portfolio
covers what business wants
7

8. Problems inherent in patent
portfolio building
 Patents cannot be obtained instantly but
require a gestation period (typically 1 to 5
years before a patent will issue on an
application)
 The competitive landscape changes over
time
• While a patent application is pending, the marketplace
may well change
• Unless the application is planned to cover market
conditions after the patent is issued, it may be useless
8

9. Structuring patent filings for
a shifting marketplace
 Focus applications on features having a
potential to make a difference 5+ years
hence
 Essential to consider:
• How the marketplace will be shifting over the next
five years
• What the business proposition to be addressed by
the technology should be five years hence
9

10. What will the business look
like five years from now?
 What products and processes will/should the
business be selling (and using)?
 What products and processes can we expect
the competition to be selling and using?
 The answers to these questions go to the
heart of the company’s business plan
 An application filed today defines what
protection the business has five years from
now
10

11. What technology should be
targeted to get new products and
services to market?
 The targeted technology defines the
patent filing strategy
 Craft a filing strategy to cover the planned
products and services as well as potential
work-arounds by competitors
11

12. What should go into the first
application?
 The coolest features?
 The best possible implementation?
 Expansive analysis of principles
underpinning the invention?
12

13. Target for the first
application:
 The simplest embodiment having useful
functionality in the marketplace
 Analysis should illuminate implementations
and claim breadth; not needed beyond this
 Additional embodiments are valuable when
they can be (and are) well described
13

14. N.B.: No previews of coming
attractions!
 Half-described embodiments can be cited as
prior art to a later application in which the
embodiment is well described and bar patent
coverage
 Less can be more: an application avoiding
half-described embodiments will be more
complete and reduce downstream risk
14

15. Patent filing strategy can
inform the business plan
 Steer product development in directions
that are ripe for patenting and
technologically feasible
 Coordinate product development and
introductions with patent filings
15

16. Patent strategy and business
strategy can inform one another
 But only when the masterminds of each
meet with one another
 Required are regular meetings of patent
counsel and general counsel with heads
of business development, marketing, and
technology development (in the
beginning, all of these may be supplanted
simply by the founder!)
16

17. Develop a plan for future
filings
 A listing of potential subsequent filings
can be integrated with a listing of existing
filings, so that the portfolio and filing
agenda can be viewed as a whole
 This is the patent portfolio listing
17

18. IP Portfolio Meetings
 Use the patent portfolio listing
• Place new inventions on it, and indicate timing for filing
• Place existing filings on it, with filing data, pertinent
product lines, and status
 Review and update the listing in meetings, so
the listing also becomes an agenda
 Have patent counsel update the listing between
meetings
18

19. IP Portfolio Meetings (cont’d)
 Items on the portfolio listing can be adjusted
in relation to the business strategy
 The business strategy can be adjusted in
relation to items on the portfolio listing
 The adjustments must take into account
competition, developments in the market, the
technology, legal proceedings involving the
portfolio and the company, and the budget
19

20. Patents in a portfolio are wasting
assets that must be managed
 Patents have a gestation period (typically 1
to 5 years before a patent will issue on an
application)
 Patents have only a 20-year duration
• Assuming all annuities or maintenance fees are paid
• Measured from date of filing of the earliest nonprovisional
application leading to issuance of the patent
20

21. Typical time scenario for
new patent filings
 t=0: file provisional patent application
 t=11.5 months: file nonprovisional (i.e., regular)
U.S. application and/or PCT application (must be
filed by t=12 months)
 t=18 months: publication of PCT and
nonprovisional applications
 t=29.5 months (if PCT application has been filed):
national phase filings in European Patent Office
(EPO), China, elsewhere depending on budget
(must be filed by t=30 months, with some
exceptions) (Can file in U.S. too.)
21

22. Strategic variation on the
time scenario (1)
 Between t=0 and t=12 months: file successive
additional provisional applications as new
embodiments are developed
 Each provisional application includes all the
content of the preceding application plus
additional content
 Incorporate the content of all these provisional
applications in the nonprovisional and PCT
applications
22

23. Strategic variation on the
time scenario (2), often
valuable, often overlooked
 At 12 months < t < 18 months (before publication
of the application), file a new provisional
application covering improvements developed
after filing of the nonprovsional and PCT
applications, and in this way restart a new series
of filings (nonprovisional and PCT filings within 12
months)
 When a new application is filed in this time
interval, the previous application will not be prior
art (except only for anticipation purposes in the
EPO)
23

24. Strategic variation on the time
scenario (3), sometimes valuable,
often overlooked
 t=0: file provisional patent application
 t=11.5 months: file U.S. nonprovisional application
and request nonpublication of the application,
which will be kept secret until issued
 t=n months: application is allowed
 t=n+1 months, and before issuance of U.S.
patent, file PCT application that does not claim
priority to any previous filing
 Benefit of this approach: keeps U.S. application
secret until U.S. patent is obtained, at price of
losing priority for foreign filings
24

25. Patent Licensing and Litigation
 Can be addressed in the IP Portfolio
meetings
 Licensing-in may be used to expand the
reach of the company’s portfolio, and may be
needed for clearance purposes
 Licensing-out, a potential source of revenue
from the portfolio
 Litigation, both patent assertion and
defense, can be evaluated in the business
and technology context
25

26. Strategic planning considerations: I
26
Technology in
house?
Patent applied
for?
Yes
Prosecution/
Enforcememt
Yes
No
Search for in-
licensing
opportunities
Evaluate New
Patent Application
Path A:
Start with Market
Need
Path B:
Start with
Innovation
Invent
No
Current
market?
Yes
Significant
Future Market
(e.g. <10 yrs)
No Outlicense or HoldNo
Evaluate New
Patent Application
Yes

27. Strategic planning considerations: II
27

28. Strategic planning considerations: III
28
0.0
2.0
4.0
6.0
8.0
10.0
0.0 2.0 4.0 6.0 8.0 10.0 12.0
Realization Difficulty
MarketBarrier

29. Making your patent strategy
deal with the competition
 Learn what the competition is doing
 Develop an integrated view of the
competition and the prior art
 Use the integrated view to inform the
patent strategy
29

30. Learn about the competition
 SEC filings (esp. Form10-K): EDGAR
filings on SEC website and e.g.
www.secinfo.com (also Lexis, Westlaw)
 Competitor web sites & WWW generally
 Newspapers, trade journals
 Licensing authorities; e.g., FDA Orange
Book:
http://www.accessdata.fda.gov/scripts/cder/ob/default.cfm
30

31. Learn about the competition—
Patent and Technology Searching
 www.uspto.gov,
http://worldwide.espacenet.com (EPO
website)
 Google Patents (www.google.com/patents)
and Google Scholar
(http://scholar.google.com)
 STN database of American Chemical
Society (https://stnweb.cas.org), NIH:
National Center for Biotechnology
Information (www.ncbi.nlm.nih.gov)
31

32. Making your patent strategy
deal with the competition
 Learn what the competition is doing √
 Develop an integrated view of the
competition and the prior art
 Use the integrated view to inform the
patent strategy
32

33. Developing an integrated view
 Patent mapping can help
 Example: IPVision (www.ipvisioninc.com
and http://see-the-forest.com)
 Specific example, courtesy of IPVision—
Ring, Inc., https://ring.com/
33

34. Ring, Inc.
34

35. Ring, Inc.
35

36. Ring has raised $209 million; CEO says patents
not important to Ring’s success
36

37. Patent landscape map for Ring’s main patent filing
37
Ring’s
published
application
(in yellow
box)
Most
frequently
citing
patent
owner is
colored red

38. Reading the patent landscape map
 Each patent box is located horizontally
according to the date of issue
 The tail to the left of each patent box
indicates the filing date
 Each red line indicates a citation by the
later patent of the starting patent
38

39. Patent landscape map for Ring’s main patent filing
39
Ring’s
published
application
(in yellow
box)
Most
frequently
citing
patent
owner is
colored red

40. The citing patents refer to
the starting Ring application
40

41. Skybell has 43 of 47 patent
properties on the map
41

42. Skybell Technologies, Inc.,
www.skybell.com
42

43. An interconnection map shows that
SkyBell has 85 patents with a great
deal of interconnection
43

44. Reading the interconnection map
 Interconnection is the result of intentional
reference, by later SkyBell patent filings, of
previous SkyBell patent properties
 Such interconnection is often an indication of
a well-developed patent portfolio
 Ring would be wise to take SkyBell seriously
44

45. Companies having patents citing
SkyBell patents: Google, Nest
45

46. Making your patent strategy
deal with the competition
 Learn what the competition is doing √
 Develop an integrated view of the
competition and the prior art √
 Use the integrated view to inform the
patent strategy
46

47. Using the integrated view to
inform the patent strategy
 Must reflect the technical and market position and
goals of the company
 Use regular, joint meetings to tune the IP Portfolio:
• Patent counsel
• General Counsel
• Marketing head
• Technology head
• Business development head
47

48. IP Strategy Sessions
 Share information and insights
 Develop and refine goals
 Review position of company in relation to
competition and company goals
 Agree on filings and budget consistent
with these goals and the competitive
context
48

49. Your patent strategy serves your business
strategy and provides business leverage
 You know what the competition is doing
 You have an integrated view of the
competition and the prior art
 The integrated view informs the patent
strategy and the business strategy
49

50. Developing the portfolio
efficiently
 Use knowledge of the prior art to craft
effective claims
 Focus on early allowance of claims to
useful subject matter
50

51. Measure twice, cut once
 Develop a working knowledge of the prior art
 Craft claims carefully, so as to be directed to
important embodiments, while clearly
distinguishing the prior art
51

52. Eyes on the prize
 Goal: early allowance of useful subject
matter
 Seek to advance prosecution toward
allowance with every response
 Use examiner interviews wherever possible
and preferably before filing each response
52

53. Faster, better, lower cost
 Avoiding a round of office-action-and-
response shortens the time to issuance of
a patent, keeps the patent record shorter,
and reduces prosecution costs
53

54. Conclusion: for a portfolio to
provide competitive advantage
 Develop and use an integrated view of the
competition and the prior art
 Structure the portfolio to cover products having useful
functionality in the marketplace 5+ years hence
 Use knowledge of the prior art to craft claims carefully
and focus prosecution on early allowance of useful
subject matter
 Review and plan the portfolio in regular meetings of
the masterminds of patent strategy and business
strategy
54

55. Thank you.
Bruce D. Sunstein
bsunstein@sunsteinlaw.com
55