Advanced Strategies for Innovative Growth Companies
Edited by David B. Orange
Great Patents is a collection of essays on patent strategy and valuation. As Orange notes in the Introduction, there is a gap between simple patent primers, aimed at those who know little or nothing about patents, and detailed expositions of patent theory, aimed more at patent academics. Great Patents “aims to inform executives on how best to improve their competitiveness.” Just getting patents is not enough. Figuring out how and when to use your patents is the key to successfully utilizing IP for a competitve advantage.
The first seven essays focus on patent strategies, while the last four focus on patent valuation. Orange acknowledges some overlap between the two, but this seems like a good break down.
“How a Young Company can Build and Manage its Intellectual Property” is written by Lawrence Rozsnyai, Senior Director of Intellectual Property and Legal Affairs at a clinical-stage pharmaceutical startup company in the San Francisco Bay Area. Rozsnyai’s chapter deals with many of the issues facing a young company determining how to protect its technology. Topics that are covered include how to select IP counsel, when and how to decide to file provisional applications vs. non-provisional applications, tips for writing the first few patent applications, how to train R&D staff to properly protect the IP, and even some next steps.
Rozsnyai’s chapter contains some valuable information and strategies including how patent applications may differ depending on the goal of broad coverage vs. quick issuance, avoiding disclosing too much in patent applications about nascent technology, claim drafting, defining terms, and providing sufficient examples. He briefly covers how R&D personnel should be trained to document and maintain IP as it is developed, how they should work with IP counsel, and how to keep notebooks and invention disclosure forms. Finally, he provides recommendations to keep business goals in mind when crafting an IP strategy, be certain you have a freedom to operate in the area of innovation, and when and how to proceed to international patent protection.
“Present Patenting for Future Business Strategies” is written by Oscar Llorin, a patent attorney in Maryland. Llorin’s chapter provides a bit more of a primer on the parts of a patent and the potential purposes of patents. Next, for technology within the company’s main areas, he advises keeping patent applications pending so that it can be focused on competitors’ later-developed technology. He also covers how post-grant proceedings, such as re-issue and re-examination applications, can be used to meet long term goals.
“The Tension Between Academic Authorship and Patent Inventorship” is written by John Evans, a patent attorney in Washington, DC. Evans reviews the rather interesting fact pattern from a 1998 Federal Circuit case to demonstrate how authorship conventions in the scientific research community do not necessarily track actual contribution to conception of inventive concepts disclosed in the articles. Thus, patent attorneys must investigate actual inventorship regardless of who is listed as an article’s author or risk losing the validity or ownership of the patent.
“Obtaining Patents and Trade Secrets for Health Technology Companies” is written by Kevin McCabe, an IP attorney in Washington, DC. McCabe stresses the value of IP to a health technology company and contrasts this with the value to an electronics company, based on the number of patents covering key technology, investment timeframes, and barriers to market entry. McCabe then spends a great deal of time providing a patent primer focusing specifically on issues that arise in the health technology field such as inherency, written description, and enablement. Finally, he briefly addresses trade secrets and how they can be applied to health technology.
“Small Business Intellectual Property Considerations When Doing Business With the Federal Government” is written by William Bainbridge, a government contracts attorney in Washington, DC. Bainbridge goes through the various opportunities for funding from the federal government that are available to small businesses. He stresses the importance of preparing and understanding the contract with the government so as not to lose any rights in your property. Finally, Bainbridge provides information on protecting technical data when transacting with the government.
“Standard Setting Organizations” is written by Marlin Blizinsky, a government relations officer near Seattle. This chapter provides a primer on standard setting, including the purpose of standards, reasons that companies would or would not want to participate in standard setting organizations (SSOs), how SSOs operate and develop standards, and obligations of membership in SSOs. Blizinsky gives special treatment to patent issues including licensing obligations and terms and how some SSOs seem to shun or avoid patented technology. He provides guidance on antitrust issues within SSOs, as well as how standards are implemented and marketed by SSOs. Blizinsky provides a great deal of information that may be helpful to an executive in deciding whether to participate in an SSO.
“A Patent Judge’s Perspective” is written by Luann Battersby, a patent attorney in Pennsylvania. Battersby interviewed Neal Abrams who spent 17 years as an ALJ on the BPAI from 1987-2004. Abrams provides tips on which cases to appeal, strategies for writing briefs, and best practices for oral argument before the Board.
“Patent Disputes” is written by Eric Fudo, an accountant and consultant who advises clients on economic damage issues in patent infringement matters. Fudo provides an overview of damage calculation in patent cases, reviewing the standards for lost profits and reasonable royalty damges. He provides a great amount of detail on what goes into such calculations and how the courts are requiring more detailed analyses from experts. Issues regarding lost profits include calculating lost revenue and incremental expenses, and focusing not only on past profits, but also on future projected profits, taking the infringement into account. Fudo also covers the elements of the hypothetical negotiation used to determine the reasonable royalty in patent cases.
“Developing and Evaluating Intellectual Property Assets” is written by Leo Jennings, an IP attorney in Virginia. Jennings describes how to promote a culture within an organization that encourages innovation, such as how to encourage employees to participate in the process and how to document invention disclosures. He covers other issues including international patenting, patent maintenance, enforcement, and how to determine whether to protect a particular invention. Jennings then turns to monetary valuation of IP. Various approaches are described, such as a cost approach, income approach, market approach, and hybrid methods. Strengths and weaknesses of each method are reviewed, and he provides some advise on how to select the best method.
“Patent Sales” is written by David O’Steen, President of an IP boutique and patent brokerage firm. O’Steen reviews ways to monetize patents, including litigation, licensing, and sales. He focuses his chapter on how to sell a patent or patent portfolio. He reviews how to determine what assets to sell, which assets may have potential buyers, who those buyers might be, and how to determine the value of a patent portfolio. O’Steen reviews how a patent’s history or future potential of infringement, licensing, and litigation may affect its value and the potential buyers for the property.
O’Steen next reviews the three typical platforms for selling patents: online, auction, or private sale. He reviews the pros and cons of each platform, including the speed, number of buyers, and sales price potential for each, including who performs the sale. Next, he reviews the due diligence to be performed on a patent portfolio, both by the buyer and by the seller. This includes determining whether the patents have a clear chain of title and whether there is a potential income stream in the form of licensing revenue or infringement damages.
“Patently Ridiculous” is written by Gerry Langeler, Managing Director of a venture capital firm in Oregon. Lengeler provides insight on whether and how venture capitalists choose to invest in patented technology. He reveals that having a patent is less important than having the ability to execute the patent. Lengeler provides a few stories that demonstrate why venture capitalists are hesitant to fund new endeavors: uncertainty. A mistake in the patent or a judge who rules in an unexpected way are several examples of such uncertainty.
Like most books that are compilations of writings, some of the essays in Great Patents are much better than others. Some violate Orange’s statement of not providing a patent primer. Overall, however, there is some good information and some inside or expert advise from different players in the field that are not always considered when making decisions regarding patents. Great Patents is a worthwhile read.