This document provides information and advice for small companies regarding patenting. It discusses that patenting is mandatory for small companies to protect their innovations. It recommends forming a patent committee comprising of CTO, legal, and marketing to review inventions and prioritize patent filings. It also provides tips for harvesting ideas from employees, conducting prior art searches, working with inventors, determining patent strategy and budgeting for patent costs. The overall message is that small companies need a thoughtful patenting process to extract value from their technological improvements.

1. Patenting for the small company
The 50 to 499 person high-tech company
Jonah Probell
Jonah@Probell.com
Nothing presented here is legal advice.
Information in this presentation may be inappropriate for some businesses.
Consult your own knowledgeable advisor.

2.  A government-supported monopoly
◦ For a limited time
◦ In a particular region
 On a technological improvement
 To extract the economic value of a
market segment
The intersection of law, technology, and business

3.  Not playing the game is not an
option
 Under a first-to-file system, a
company must act or be blocked
by a later competitor
 A company must understand both
the rules and strategy
Patenting is mandatory

4. 1. Desperation
◦ In need of a patent to get funding
2. Disregard
◦ Too busy on product development to spend time patenting
3. Exuberance
◦ Behind a competitor in the patent race
◦ Patent, patent, patent
4. Discipline
◦ Significant maintenance fee and foreign filing costs
◦ Thoughtful patenting decisions
The four stages of small company patenting

5.  Comprises: CTO, Legal, and Marketing
 Meets quarterly
 Reviews market developments and competition
 Prioritizes invention disclosures for filing
 Checks product release schedule against invention disclosures
 Plans US and foreign patenting strategy
 Reviews patent budget
The ideal patent committee

6.  Maintains an accurate docket
 Solicits invention disclosures
◦ Hangs around the water cooler
 Conducts prior art searches
 Conducts inventor interviews
 Coordinates with outside counsel
 Routinely writes and files the highest priority invention
 Checks conference papers against invention disclosures
 Stimulates innovation
◦ See Michael Moore article: Hands-on counsel
The in-house specialist role

7.  Each claim element limits the market scope
◦ Fewer potential infringers have all features
 Less market value
 Each claim element eliminates prior art
◦ Fewer references describe all elements
 Greater (re)exam strength
The double-edged sword
Claim elements
Value Strength
Value-strength inversion
Both allowability and
enforcement are per-claim,
not per-application or patent.

8.  A motor vehicle (large market, much prior art)
 A motor vehicle having:
◦ Four wheels; (eliminates motorcycle and airplane market)
◦ Two seats; and (eliminates sedans and SUVs)
◦ A bed for carrying lumber. (eliminates sports cars)
 A motor vehicle having:
◦ Four wheels;
◦ Two seats;
◦ A bed for carrying lumber; and
◦ 1001 colored lights. (no prior art, but no market)
Fancy truck claim example
The name of the game is the claim.

9. 1. Propose various claims of different breadths
◦ Describe conceivable products of competitors, prospective licensees, and
potential acquirers
2. Search for prior art and eliminate non-novel claims
◦ All material prior art must be saved and filed
3. Analyze the market size that each novel claim can capture
Testing whether to patent an invention
Avoid focusing on your own products

10.  Avoid searching patents, lest you learn that your product infringes
 Thoroughly search non-patent prior art to save the examiner time
◦ Examiners only have a few hours for each application
 Let the examiner find patent prior art
 Add and amend claims
 Finding prior art strengthens a patent
◦ Acquirers and investors study patent applications’ histories
Searching prior art
The examiner is your friend.

11.  Brainstorm frequently and informally
◦ Start in the kitchen, move to the whiteboard
 Be aware of projects underway
 Query inventors on:
◦ Recent problems solved
◦ Product differentiation
◦ Competitors’ developments
◦ Market needs
 Never reject an idea
◦ Encourage creativity
◦ Keep a long list
◦ Solicit invention disclosures
Harvesting ideas
Effective brainstorming can
spawn product innovations.

12.  What is the problem being solved?
 Draw one or more diagrams showing all elements
 How does the invention work (a few paragraphs)
 What are the minimum basic components / steps
 What are some useful variations?
 Propose some claims (optional)
 What competitors and markets would be captured by patenting this
invention?
 Who contributed to the invention?
The invention disclosure form

13.  Capture whiteboard drawings
 Edit claims together using a projector
◦ Keep the invention disclosure at hand
1. Have inventors dictate a picture claim
2. Break out dependent claims
3. Achieve the broadest reasonable claim 1
4. Define technical terminology
 See D. C. Toedt paper: Reengineering the Inventor Interview
The inventor interview
Avoid inventor “myopia”.
Describe other companies’ conceivable products.

14.  No visible deadline for many filings
 Product deadline pressure is ever-present
◦ There is never a good time to work on patents
 Bonus programs are insufficient motivation
 Assign inventors time to review applications
The busy inventor

15.  No part of a well-executed strategy
◦ Used by pre-funding startups
◦ Used by unrepresented inventors
◦ Used for unplanned filings before public disclosures
 Conferences
 Postpones receiving an enforceable patent
 Encourages careless drafting
Provisional patent applications

16.  Foreign applications must be filed within one year of US filing
 Consider where likely-infringers reside
 Consider foreign market size
◦ But only what products might be made if the US market is closed
 Use PCT procedure to buy an extra 18 months if needed
Determining where to patent

17. Budgeting
These are gross
approximations
Activity Approximate
attorney fees
Approximate
Office fees
US non-provisional (regular)
patent application
$10,000 $1500
Strong US non-provisional
patent application
$20,000 $1500
Provisional
patent application
$500 $130
Strong provisional
patent application
$8000 $130
Provisional conversion $6000 $500
Translation (per language) $5000
PCT procedure $500 $2000
Per-foreign office filing $3000 $1500
Enforcement litigation $4,000,000

18.  Patenting is mandatory
 Draw a team from technology, legal, and marketing
 Harvest ideas
 Be quantitative in choosing inventions to patent
 Search thoroughly, but only non-patent prior art
 Allocate inventors’ time for patenting work
 Consider international strategy and budget
Conclusion

19. Thank you