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Author: Alan West

Using Public Disclosures to Prevent Competitive Patents

Posted on August 15, 2018 by Alan West

When does disclosing a secret actually help the secret-keeper?  In the world of patents and patent protection, it can be a key strategy.

Most entrepreneurs understand that an invention must be truly novel to receive a patent.  According to the U.S. Patent and Trademark Office (uspto.gov), an invention cannot be one that has been previously “patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.”

As an example, I once worked at a company that acquired a medical device patent from a physician.  The resulting product achieved rapid market penetration, and the physician inventor received substantial royalty payments – until a competitor discovered that the inventor had described the concept to a group of physicians during a Grand Rounds at a small hospital a few days before he had filed the patent.  As a result, the patent was invalidated, the competitor began marketing a look-alike product, and the company and inventor had to deal with the rather nasty legal business of all the royalties that had been paid.

You have to be especially cautious to not disclose a patentable idea to anyone before filing a patent, unless your audience has signed non-disclosure agreements in advance.  Otherwise, it is considered to be a “public disclosure,” even if it is to one person.

You can, however, use such public disclosures to your advantage.  Let’s say you are a start-up company with a patent covering your first product.  A common defensive patent strategy is to file additional patents covering improvements and line-extensions to your original patent – a tactic known as the “picket fence.”  In this way you create a “fence” surrounding your product, making it much more difficult for competitors to get around your patent.

These new patents are all subservient to your core patent in that they are offshoots of the original and cannot be independently practiced.  As a start-up company, however, you may not have the cash to file all these new applications.  A well-financed competitor, on the other hand, may decide to file patents covering improvements to your product as an offensive strategy.

By filing enhancements to your original patent, they can create bargaining chips to use with you to negotiate a cross license, giving them the right to your original patent in exchange for you to use their patents covering product improvements.  It is a common and effective strategy, but it’s crucial to realize that it can also undermine your company’s competitive advantage.

A simple way to avoid becoming fenced in by a competitor in this way is to publish a description of the improvement in a paper or on your website.  If you are not going to file a patent on the improvement, publicly disclose the idea so no one else can patent it.  In that case your product would still be protected by your core patent.

The Intellectual Property Pyramid Assessment©, a workbook published by the Pittsburgh Life Sciences Greenhouse, will soon be available to order on Amazon. To sign up to get more details please email info@plsg.com.

Posted in Business Development, Health IT, Words of Wisdom, Concentrations, Medical Devices, Diagnostics, Portfolio Companies, Therapeutics, Biotechnology Tools, UncategorizedLeave a comment

The IP Pyramid™ – How to Create a Comprehensive IP Strategy

Posted on March 5, 2018 by Alan West

The IP Pyramid™ – How to Create a Comprehensive IP Strategy
By Alan West, Resident Entrepreneur, PLSG

Companies routinely write comprehensive business plans to communicate their commercialization strategy, including detailed sections describing product development, manufacturing, marketing and sales, and financial projections. Naturally, such business plans help clarify the company’s objectives, organization, and strategies for future growth and a competitive vision.

Rarely, however, does a company draft a similar strategic plan for its Intellectual Property (IP). Instead, most simply offer a paragraph or two within their business plan listing a portfolio of pending and issued patents. This is entirely proper, of course. Patents, after all, represent an important asset that enables a company to create a competitive advantage, maintain premium product pricing, participate unencumbered in a market, and raise working capital. The need for patent protection is especially critical for life sciences companies, which are complex due to their very nature and the many regulations that govern them.

That said, patents represent only one part of a company’s IP. That single umbrella descriptor also includes trade secrets, processing methods, manufacturing fixtures, copyrights, and industrial layouts and designs – all parts of the IP picture that should be included in a company’s inventory. Equally important is how the company plans to respond to shifting market dynamics, pricing pressures, new technologies, expiring patents, and emerging companies.

Like a business plan, a comprehensive IP strategy communicates to investors, business partners, and employees the company’s current and future plans to maintain its competitive advantage. It is much more than a simple listing of patents.

Product drift represents another variable that can generate unwelcome surprises for early-stage companies. Often a patent is filed well before the product’s design has been completed. But product design is an iterative process, and the final product realized may not be adequately protected by the company’s patents. Such ‘drift’ can occur not only during the design process but also afterward during scale-up activities, cost improvements, and changes to the product’s packaging. In this case, it is critical to map every aspect of the final product’s specifications against each of the patent claims to ensure coverage.

The PLSG can help companies anticipate, alleviate, and even avoid the IP-related variables that can slow down or detour the journey to successful commercialization. The IP Pyramid™ Assessment – a novel method for analyzing a company’s IP and creating a comprehensive strategy – was first developed by Jim Jordan and introduced in his book: Innovation, Commercialization and Start-ups in Life Sciences. A subsequent workbook based thereon is now in development that not only considers current competitors and markets, but also anticipates shifting market dynamics, new competitive products, and innovative ways a company can maintain a strong competitive position and premium pricing.

Such a comprehensive analysis, strategy, and inventory can add significantly to early valuations for start-up companies and can ensure stockholders that larger companies will continue to maintain their technological and competitive edge. Please contact me, or Jim Jordan, to learn more about how we can help your organization.

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Posted in Business DevelopmentLeave a comment

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