We have a guest post, on “IP for start-ups”, from Mr.Bart van Wezenbeek. Mr.Bart van Wezenbeek is a senior associate European patent attorney at the leading European firm of V.O. (The Hague). He is also the Deputy Justice at the Appeal Court of The Hague (2001-present). Previously, he has been the Head of the patent department and acting corporate counsel of a biotech start-up. You can learn more about him here and here.
IP for Start-ups || Points to consider for CEO’s, scientists and IP cell managers
It all starts with some bright, new, useful technology and the idea that there would be a market for such a new technology. You form your own company and start developing the technology. Often this technology is protected by one or more patents. If such a start-up is spun out of a university or out of an existing company, often such patents are the property of the university or former company and the start-up company is able to exclusively license these.
But then you have to face the real world. You know the science bit, that is where you are strong and have a unique position. You also have some business sense, otherwise you had not thought of starting your own company. But there still are some fields where you need help, and one of those fields is IP and legal issues around these.
The first advice that I should give you is that you should hire professional people to take care of these issues. Yes, I know that money is problematic. But your technology is your baby and if you need a doctor for your baby, you would not risk to follow a cheap advertisement for medical care. It works similarly for IP: quality advice is expensive. However, the chance that you get something valuable is larger with sound, professional advice. So, do not save money on this.
Outsourcing vs in-house
Further, let the advisor take part in your business as much as possible, or, in a later stage, hire a professional IP expert as one of your employees. To my opinion it already pays off when you have an in-house expert if only you have about ten families of patents. The advantage of having an in-house expert goes further than only the actual patent prosecution activities. First of all, of course your own IP function can be used to coordinate your own patent activities, like filing and patent prosecution of your national patent applications, but also coordination and contact with foreign agents on the filing and prosecution of your applications abroad. Secondly, however, an in-house team or person will be always available for advice on IP matters. Further, the in-house function should be closely related to research and development (which in a small start-up company is not too difficult). In such a close relationship it is easier to discover and get acquainted with new patentable inventions. This is an advantage that is commonly underestimated. If there is no close relationship between research and IP, many possibilities of obtaining patent protection are being missed, because scientists are inclined to think that their solution for the problem is rather obvious. Often this is not the case and the IP advisor can easily see opportunities for protection. This is even stronger in development where the technology is transformed to fit in the eventual product. In this process many problems are encountered and many solutions are found: ideal for finding patentable inventions or subjects for other IP rights (utility models, designs, trade marks, copyrights). A further advantage of the close connection is that there will be a better understanding between the two functions for each other’s needs and requirements. The in-house function may also act as a clearinghouse for outgoing communications. Often the chance of obtaining patent protection is jeopardized by publications or presentations of the inventors themselves. Especially scientists that have been used to a university surrounding will be prone to talk about or to publish their research. Keeping a close eye on what is published by the company and its employees does not only prevent any unintentional disclosures, but also should enable a more uniform public relations behavior of the start-up.
The in-house patent agent also is able to take part in the management of the company and to advice in the decisions of the management team. The advice can be based on information obtained from searches in the patent literature and for instance landscape analyses or white space analyses. Next, the IP function may also advice on the actual experiments that are needed to obtain the best patent protection.
One further important function of the IP team in a company is to provide assistance with the negotiation, conclusion and drafting of legal documents, such as license agreements.
Form this long list of activities of an in-house IP function it follows that it is advantageous to have such a function from the start of your company or as early in your company’s life as possible.
Use your IP
One of the mistakes that is frequently made by companies is thinking that once you have filed your patent application and/or have obtained your patent you will be recognizable for licensees and can wait till they ring your door bell.
There is no such thing as an easy licensing strategy. If you want to sell (licenses to) your patents, you have to really put them up for sale. Not only that, you also have to convince the potential licensees that your technology is top and worth the money. The best way to do that is to employ business people that go and visit potential licensees to explain and offer access to your technology. These ‘sales’ people will – if they do a good job – make so much profit for the start-up that they earn their own salary. If that is not the case you have to rethink the value of your technology.
Also be patient: closing a license deal takes a long time and a duration of the whole process from the first negotiations to the eventual closing of more than one year is no exception.
The health check
Obtaining and maintaining IP (patents) is expensive. A regular ‘health check’ is necessary to limit your spendings to only that IP that is necessary or beneficial for your company.
One of the things that is constantly changing is the focus of your research. Patents generally are filed at the beginning of the research and development path and it may well be that the path that research will take after filing the patent application starts diverging and will lead to a product that does not fall any longer within the claimed invention. This often does not align with the thoughts of the research people who know that they have obtained a patent on the technology, but who forget that their research continued after filing the patent. Not only your research focus may shift, but also the coverage of your patent claims can change because you are forced to limit them on basis of prior art or any other objection to the patentability. It may thus be the case that your scientists think that their research is covered while the actual situation is the opposite. Next to the clearinghouse function discussed above, such a situation can also be prevented by regularly checking whether your products and/or your research are still covered by the patent (application). If this would no longer be the case, you seriously should consider dropping the patent (application), thereby saving money to may be file a new, more relevant application.