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Intellectual property for start-ups in a post-COVID world: part one – patents

Thought Leadership published by Appleyard Lees IP LLP, under Discovering Start Ups, Innovation / Incubation, Legal / IP, Strategy

A series of articles exploring the effect of COVID-related disruption on start-ups' management and monetisation of intellectual property, an essential consideration for start-ups in the growth and development phase. These articles focus on specific challenges start-ups are facing right now. In the first of the series, patent attorney Parminder Lally explores what's changing, what's not, and how to navigate the uncertainty.

Intellectual property for start-ups in a post-COVID world is a series of articles exploring the effect of COVID-related disruption on start-ups’ management and monetisation of intellectual property (IP), an essential consideration for start-ups in the growth and development phase.

These articles focus on specific challenges start-ups are facing right now. Changes in the way start-ups could secure and manage patents and trade marks, address other relevant legal matters, attract investment, and protect IP on a budget, are being driven by these challenges. We provide practical guidance on how to manage your IP now in order to improve the position of your start-up in the market in the future, whatever that may look like.

In the first of the series, patent attorney Parminder Lally explores what's changing, what's not, and how to navigate the uncertainty.

Managing start-ups’ patents in a post-COVID world

Patents are one of the most well-known types of intellectual property (IP). However, what can be patented is often less understood by new entrepreneurs and innovators.

What’s stayed the same?

Not everything with respect to patents for start-ups is changing. Some things remain unchanged:

Patents are used to protect inventions: This includes new products, product manufacturing methods/processes, and methods for controlling a process or analysing data. A new logo, product or company name is not patentable, as it is not an invention. Instead, these are protected by trade mark, which will be discussed in a later article in this series.

Inventions must be new: Patents are a type of registered right. An invention must fulfil specific criteria to be patented.  Importantly, the invention must be new; this is assessed with respect to everything that is already in the public domain, in any format, in any language, in any country, at the time a patent is sought.

Secrecy is important: Publicly disclosing the invention in any way, such as via a press release, an academic paper, a conference or trade show presentation, or even just talking about your idea casually, may mean a patent cannot be obtained. Start-ups often need to talk to investors or funding bodies about their work in order to raise money for the business, including money which might be spent obtaining a patent.  These discussions should be confidential as well, through confidentiality agreements or non-disclosure agreements (NDAs).

Patent holders can stop competitors from making or selling their invention: Patents do not confer a right to start making or selling a new product, or to use a new method. Rather, a patent holder has the right to stop another company exploiting his or her invention without permission.

Patents are national IP rights, meaning that a patent issued in a particular country is enforceable against a company that is infringing the patent in that country. Patents therefore should be sought in the countries where the invention will be commercialised. This does not necessarily mean an invention must be patented all over the world. Often it is sufficient to seek patents in the company’s largest markets only, such as Europe, the USA and China.

Ownership of inventions varies around the world: In some countries, including the UK, if an employee invents something as part of their normal duties, the company owns the invention and the right to apply for a patent.  However, if someone in your marketing team invents something, they may own the invention themselves. This needs to be considered carefully, particularly if a company hires contractors or academics to undertake research and development.

What’s changing? 

Pre-COVID and post-COVID, the reasons for patenting your invention are largely the same. Patenting an invention can be relatively expensive for start-ups, who sometimes, understandably, question the value of IP. However, patenting an invention is still wise, because patents can help start-ups to:

  • Secure market position and financial return on commercially successful innovations, by preventing third parties from using their patented inventions,
  • Obtain greater negotiating power when collaborating with other companies, and
  • Attract investment partners and support business expansion, as they demonstrate that a company has a high level of technical expertise.

However, as we begin to experience the effects of COVID-related disruption, start-ups in particular may need to make difficult decisions. With limited resources, what should a start-up prioritise now, with respect to their inventions and approach to patents?

Some start-ups may find it more difficult to begin commercialising their inventions at this time, because commercial partners may be more difficult to find, it’s not the right time to launch a product on the market, or because manufacturing has stopped. In the meantime, it would be wise to:

  • Delay the patent process – this can buy valuable time, to allow manufacturing to re-start, funding channels to open up once more, or lab-based development to begin again. More information on slowing down the patent process can be found here.
  • Keep ideas secret– if a start-up has not started the patent process yet, the most cost-effective way to protect their inventions during this time may be to simply keep their inventions secret. As long as the inventions are kept secret, a patent application can be filed for the inventions at a later date.

During lockdown on the movement of people, inventors may have more time for IP-related admin, which is often overlooked in busier times.  For example, start-ups could use this period to:

  • Develop processes for invention capture and protection within the company – implementing these processes will help the company to grow its patent portfolio when the business expands, and employees become busier.
  • Brainstorm around their existing inventions in order to identify work-arounds or other ways their inventions could be implemented – this could help to broaden the scope of any patent applications they file, and to strengthen their patent portfolio.
  • Writing-up existing ideas using invention disclosure forms – this, in conjunction with the brainstorming, can ensure an invention (and all its variants) has been fully thought through. Patent attorneys want as much technical information as possible when drafting a patent application, so spending time writing-up ideas now means the patent drafting process could be smoother and quicker.
  • Identify their competitors or potential partners – keeping an eye on what other players in a field are doing is important as it could spark innovation or suggest a different avenue to explore. It could also help companies to identify potential R&D or commercialisation partners, potential licensees (which is a revenue-stream that is often overlooked), or potential problems.
  • Identify their primary and secondary markets – companies need to think carefully about where they are likely to make and sell their inventions, as well as where their competitors might be located. Patents last for twenty years, so companies need to look ahead and think about which markets might become important and where manufacturing hubs may be located in the future. This can help to determine companies’ patent filing strategies.  Spending the time on this now means start-ups have a strategy they can refer to when they start or restart the patent process.

Our attorneys continue to offer practical guidance on the effects of COVID-related disruption on IP. Follow us on Twitter (@Appleyardlees) or LinkedIn, or visit appleyardlees.com for our latest insights released regularly.

Subscribe to The Greenshoots Podcast by Appleyard Lees for on-demand access to conversations focused on what matters most, right now, in patents, trade marks, IP litigation, IP strategy and more.

Please note that the above information is not intended to be comprehensive and should be discussed with a qualified patent attorney.

 

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