Patent Strategy Basics

I'm a patent attorney who's been working with software companies for over 10 years. Like many of you, I lived through the dot-com bubble when tales of Rembrandts in the attic inspired companies to patent everything under the sun, including business methods. Then we went to the other extreme for the past several years, with many software companies, especially open source companies, underinvesting in patents. The reasons I heard were many: patents were too expensive to obtain, anti-competitive, downright evil, etc. And, after all, the Supreme Court was going to throw out all the software and business method patents – it was just a matter of time.

We all know how that story ended. Patents on software and business methods are alive and well and aren't going anywhere any time soon.  Patents owned by holding companies are being asserted in lawsuits, often naming dozens of defendants, and those lawsuits are becoming ever more frequent.  Adding insult to injury, several high profile deals this summer have suggested an average value in the hundreds of thousands of dollars for each software patent in a well-constructed patent portfolio.  Companies that have underinvested in patents are not only at a disadvantage when responding to patent litigation but also appear to have foregone the opportunity to develop a significant corporate asset that could be monetized with the right counterparty.

With all this in mind, below are four guidelines for innovative companies interested in avoiding the excesses of both patent boom and patent bust:

    • Budget a modest amount of time and resources every month for patent portfolio development.  Patents are like insurance: you can't wait until you need it to think about getting it.

 

    • Focus your patent efforts on features that customers will pay for or that competitors will copy.

 

    • Get your patent applications on file before you commercialize your invention.  The "America Invents Act" that is waiting on reconciliation and the President's signature will sharply restrict the "grace period" formerly available under U.S. law for the commercialization of an invention.

 

  • Use provisional patent applications where possible.  Provisionals operate as placeholders for a utility patent application filed up to one year after the filing of the provisional.  They are an inexpensive way to establish a record of invention against your competitors and give yourself time to test the market for your invention.

Good luck and happy patenting.

This post was authored by Robert Blasi.