Obtaining patents can mean the difference between getting funding or outright failure of the company.
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Further, patents are critical in any FDA regulated field, because a patent can mean as much as a 400% mark-up for drugs, and the combination of FDA regulatory barriers coupled with patent protection can mean that this premium can last a very long time.
Additionally, companies should file patent applications as early as possible to beat possible competitors. Yet, patents are expensive—expect to spend $10-20 thousand dollars per country to obtain patent protection. Therefore, it's important to decide early on a patent strategy the company can afford.
First, ALWAYS start with a provisional application. This should be as well drafted as possible, but in pinch you can file it yourself for minimal cost. The filing fee is about $100 for a small company.
By filing a provisional patent application, you can gain a year to generate the funds needed to convert the provisional application to a regular patent application within the one year deadline.
When filing the provisional application, consider various types of claims that might cover various aspects of the invention and try to describe reasonable variations of each. Claims can recite new features, entire devices housing those features, computer or web-based systems using the device or data, compounds, as well as method of manufacture and use of those compounds, devices or systems.
Patent term is 20 years from the filing date of a regular or international application. The provisional application doesn't count against term, so this approach will also result in an additional year of patent term—an important consideration for any FDA regulated product.
Second, know the prior art and provide patent counsel both an excellent disclosure and copies of the best prior art. Educate patent counsel about the invention, and explain the differences between invention and the closest prior art. Employees should retain and include failed experiments in the invention disclosures as well. In the current legal environment, it can be difficult to obtain patent protection, and sometime failed experiments provide the best evidence that a patent should be granted.
Third, realistically consider when the company can anticipate financing and how many countries it can afford to file in at each stage of the financing. A PCT application is a patent application that covers more than a hundred countries, but it costs about $4-5000 just in filing fees and it will NEVER mature into a patent. Instead, it holds the Applicant's place for 30 months from the initial filing date while the Applicant decides which countries to file in and arranges the needed funds.
Thus, if a company can only afford to file patent applications in Europe and/or the US, it will probably be cheaper to file at the one year conversion deadline in both places, than to file a PCT, followed by filing in Europe and the US. Consider also what useful foreign patent protection might be obtained in a second generation patent. Second generation or "follow-on" patents can be filed in more countries, and with a new initial filing date, the follow-on patent will have a longer patent term too.
Fourth, consider your product life cycle as you design a patent strategy. In a fast moving industry like computers, only core technology may last long enough to warrant patent protection, but particular implementations may change so fast that a patent has not even issued before the design changes again. In that instance, consider patent strategies that lead to faster issuance of patents by claiming the invention more narrowly, or by forgoing the provisional application and starting with a utility application. Broader claims can always be pursued in a continuation or divisional application.
You might also consider protecting the look of a device with a design patent, which is quite inexpensive and quick. Further, patent protection can, and should be, complemented with both trademark and copyright protection. The i-pod, for example, is covered by utility patent, design patent, copyright and mask work (a copyright-like type of protection) as well as trademark protection. In contrast, any FDA regulated product has a very long life cycle because the FDA imposes considerable barriers to market entry. Thus, in any FDA regulated industry there is no rush for patent issuance, and conserving patent term is a more important consideration.
More Tips for Scientist Entrepreneurs
To learn more about how to bring a product out of the laboratory and transition from the role of scientist to that of entrepreneur, please browse the rest of the tips for science entrepreneurs in this article series:
- Transitioning from Science to Sale - We introduce our 10 tips for entrepreneurial scientists who want to take their science to market.
- 1. Getting it in Writing - Before you get too far along in the process, it's imperative that you put together written contracts that define ownership rights, confidentiality and other important obligations and understandings.
- 2. Cultivating A Culture of Invention - Encouraging invention is the first step to creating valuable intellectual property. We look at what organizations must do in order to motivate employees to create proprietary science and apply for patents.
- 3. Getting Inventorship Right - Patent laws require that you get inventorship right. Get it wrong and you can lose the patent. Here are some simple ways to avoid making a mistake in the naming of inventors.
- 4. Using Hardbound Notebooks - Your lab notebook could end up being used as evidence to invalidate your patent claim. We discuss the proper use of hardbound lab notebooks to ensure proper IP protection.
- 5. Planning a Patent Strategy - Filing patents can be an intimidating endeavor, but there are some best practices for scientist entrepreneurs that you ought to know about.
- 6. Planning an FDA Strategy - Knowing these tips for getting FDA approval will come in handy if you are working on new drugs or medical devices.
- 7. Loosening the Reins - You can't do it all. Scientists entrepreneurs must know when to transition leadership and when it's time to bring in the pros.
- 8. Stirring Public Interest - Promoting your science before you commercialize can smooth the road to funding...but there are a few mistakes you can make if you are not careful.
- 9. Financing the Company - It takes money to make money. Here are a few things to know about the funding process.
- 10. Preparing for Due Diligence - Due diligence involves intense scrutiny of all of your documents. It's critical to keep your documents well-organized and readily accessible.