Patently Protected: To keep a competitive advantage, protect your innovations with patents
You’ve got a great idea, something that could propel your business to the next level. Or maybe you’ve got a novel process that puts you ahead of your competition. But now that you’ve got your game changer, you need to protect it and the time, effort, research and development that went into creating it.
Patents as investments
Though acquiring a patent can be time consuming and costly, it should be looked at as an investment, says Wes Austin, intellectual property lawyer at Austin Rapp & Hardman.
“I wouldn’t recommend spending money on patents just to be able to say you have patents,” Austin says. “But if you have an innovation that is giving you the edge over your competition, it’s important to try to protect that innovation from copycats and competitors. Really the best way to protect technological innovation is through patents.”
The more time and expense that went into developing innovation, the more likely it is a competitor will try to swipe or borrow from that idea, Austin says, so people with patent-able ideas should put up roadblocks to keep their investment safe. Because it can take so long to receive a patent—generally between two and three years, and sometimes longer for more complicated patents—it’s important to start building those roadblocks long before you need them.
“You want to file the patent application before any public disclosure, before you talk about it at a tradeshow, or before the product ships,” Austin advises. Until the patent issues, you’re at risk of copycats. And the longer you have to wait for the patent, the longer you’ll have to wait to take legal action against the infringer. Austin always recommends that businesses “file early and file often.”
Small, significant steps forward
Patented products are often thought of as pieces of cutting-edge tech, but they are just as often seemingly simple products or features that can make a world of difference.
Take Orbit Irrigation Products’ new pipe fitting for sprinkler systems. Instead of dealing with sticky, smelly, unforgiving PVC pipe glue for sprinkler systems, the Utah manufacturer spent years developing a pipe fitting that didn’t need to be glued, but could be just pushed into the pipe.
Orbit CEO K.C. Ericksen says that though their solution may not be the most glamorous thing in the world, “it’s the most innovative irrigation fitting to come to market in many, many years. It will ultimately change the way people install irrigation systems because it’s so much faster and easier than gluing fittings.”
Glamorous or not, Orbit’s PVC-Lock push fittings represent a huge amount of time and money in research, development, implementation, marketing and sales. And the company is not about to let its competitors cash in on the idea.
Since Orbit was founded in 1986, patents have played an important role in its success. The company leads the do-it-yourself irrigation category in the United States and is a major player throughout the world. The company employees 400 people in its North Salt Lake headquarters and up to an additional 200 in its overseas operations in China and Taiwan.
Orbit pursues both design patents—those based on the cosmetic look of the product—and utility patents, based on the how the product works.
“We spend a lot of time and money designing and developing unique new products. When we patent a new product, it prevents others from copying the idea for a period of time,” Ericksen explains. “For a business to be successful, it needs to be able to capitalize on a product long enough to recoup the costs of its development, and then make money on it.”
The company currently has 58 active patents and 21 pending applications. One of those pending applications is for a wi-fi timer for smart home water meters. These timers acquire information from the smart meters owned by the city, which gives homeowners more visibility through an app on their mobile device or their home computer as to how much water they are using for outdoor watering and how much it’s costing them.
“Currently, when water is piped onto people’s property there may be leaks that they don’t know about, and they’re being charged for that lost water,” Ericksen says. He thinks the wi-fi timers will help fix that. The company is testing the new timers in Weber County and is in talks with other cities in the state.
Without a patent on the product, however, Ericksen says his company’s new technology would be up for grabs. “If we’ve spent possibly hundreds of thousands of dollars and years to develop something, and we don’t patent it, our competitors can immediately start copying our ideas and profit from our research and development.”
In the tech space, there’s really no limit to the number of patent applications a company might file in a given year. In 2014, the United States Patent and Trademark Office issued more than 300,000 patents. More than 7,500 of those patents were awarded to IBM, nearly 5,000 went to Samsung, and Google racked up more than 2,500.
However, Austin says it’s less about the number of patent applications than the process involved in pursuing them—and what a company plans to do with them. “There’s not usually a hard number that we recommend, but we do recommend that companies have a patent program in place for regular filings,” Austin says. “If pursuing patents is not part of their regular workflow when they’re coming up with their new product designs, it’s too easily forgotten and then just not done at all. If they’re not committed to filing a certain number each year, there tends to be problems because people stop thinking about their patents.”
Though smaller tech companies don’t need to apply for as many patents as a Google or IBM, Austin says having some patents in their portfolio is incredibly important. “For technology companies, a huge part of their value is based on intangible assets, including patents,” he says. “If you’re a small tech company and your goal is to get acquired, you have to ask yourself what the acquiring company would want to acquire. … If you don’t have any intellectual property, why would they want to purchase your company? They could just copy what you’re doing and start to sell the same thing, unless you’ve got patents that would prevent them from doing that.”
A company should have a plan for its intellectual property portfolio and build a strategy around what it wants to do with the patents it already has, and how acquiring more patents would help its long-range goals.
Is it worth a patent?
Not every idea is worth patenting or can be patented. Austin says there are a few criteria that an innovation should meet before a patent should be considered. The first is shelf-life. If it’s likely that your product’s usefulness will have disappeared by the time you get the green light from the patent office, it may not be worth investing the time and energy.
Another criteria is that the invention be innovative. Say you decide to launch a new live video streaming service. Even if it becomes wildly popular, it may not be patentable. “Just having a cool product isn’t enough; you have to figure out what’s innovative about it,” Austin explains. For example, streaming video has been already been done so that, in and of itself, can’t be patented. The ability to stream it on a phone is a nice feature, but that’s not unique either. “You really need to be able to drill down and show that your product is actually innovative and not just a marketing success.”
Without a patent you have no legal backing if a competitor uses your public idea. “If a competitor steals your idea, but the idea was not public—[meaning] it was still secret, there are other non-patent options you can pursue such as theft of trade secrets,” Austin says. “But in today’s world of Edward Snowden, WikiLeaks and the Sony Pictures hack, it is really, really difficult to keep something secret.”
If you’re not sure if pursuing a patent is the right path for your company, it’s a good idea to speak with an expert. “Getting good advice can save you a lot of money. It might cost you a little upfront to have a conversation with a patent attorney, but getting really good advice will be well worth the dollars spent,” Austin says. “To come up with a patent strategy, you want to have someone who really knows patents to help you develop it.”