Intellectual property (IP) rights can play an important role in securing the confidence of funders. Patent protection, for example, provides an assurance of monopoly rights for the innovation, confirming its commercial potential. It is important to seek patent protection in the right way and at the right time, however, and pitfalls must be avoided.
A patent will only be granted by the UK Intellectual Property Office (UKIPO) or European Patent Office (EPO) for an idea that is new. This means patent applications must be filed before the idea is disclosed outside the company. This can present a challenge for start-ups, due to the need to disclose a certain amount of information about the company and its commercial plans to potential investors and potential clients.
Avoid early disclosure
As a first step, the innovative business should make all staff aware of what can, and cannot, be said about a product under development. This is particularly important for the sales team, who are often responsible for answering questions about the product from prospective and existing customers. A key message to staff should be to sell the advantages of the product, without disclosing how they are achieved. This allows the company to sell the idea without disclosing the information needed to copy it. As patent applications focus on the technical aspects of the idea – the ‘how it works’ – keeping this secret means the right to file a patent application is retained.
If a funder is seriously considering investing in the business, they will typically seek full disclosure of the product, so they can assess the likely success of the venture and test any claims to the benefits. They can sometimes be reluctant to sign non-disclosure agreements (NDAs) however, due to the risk of inadvertent disclosure, particularly if they are in discussion with more than one business operating in a similar field of research.
To minimise the risk of early disclosure, the business should file a patent application before entering negotiations with potential funders or other third parties if possible. Taking this action will ensure that ownership of the idea is clearly established. It also enhances the value of the company in the eyes of the potential investor, and allows for open conversations about the technology. An initial patent filing is all that is needed at this stage – further applications can follow later as the technology develops. As the patent process generally takes several years, third parties won’t expect the application to have been granted.
Ensure patent eligibility criteria are met
In some circumstances, there may be a need to file a patent application early to facilitate discussions with individual investors. Before doing so, the business should carefully consider whether the research is sufficiently advanced to fulfil the requirements of disclosure. For example, patent applications should clearly illustrate the claimed advantages, and in many countries a worked example is required at the time of filing. Applications must also be plausible, containing enough experimental data to substantiate any claims.
For innovators, it is not always easy to know how much data is required to meet patent eligibility criteria, which can vary hugely from field to field. Engineering concepts typically only need a detailed description of the apparatus, which may or may not have reached prototype stage, whereas chemical inventions are likely to need some evidence of efficacy. Seeking professional advice can help the business balance the need to file early against the need to ensure that patent eligibility criteria are met.
Get valuable market insight
Another key component to a successful IP strategy is market knowledge and an appreciation of how it might evolve over time. Decisions need to be taken about where in the world patent protection is required, and once this is decided it might be difficult to add countries to the ‘patent family’ at a later date. Another point to consider is where the invention is likely to be implemented.
Insights about competitor activity could also be strategically important. Monitoring a competitor’s patent filings, for example, could allow the business to oppose applications that could hinder its own activities. Keeping a close eye on competitor activity could also provide insights about which geographical markets they are targeting.
IP protection in action
Algae-powered innovation is a perfect example of an area where patent protection is now vital, having become one of the most dynamic areas of scientific research on the path to a sustainable future.
Patent filings in this field of R&D have grown significantly in the last 20 years, with much of the innovation taking place in Asia – countries such as China, Japan and South Korea. There are also strong hubs of innovation in the US and Europe, and in the past few years there has been a surge of patent filings in Latin America, reflecting the growing importance of this region as a commercial market for algal biomass products. Many patent filings focus on biofuels and bioengineering, while China is strong in nutritional and medical applications, and Japan and South Korea focus on pigment extraction for use in food, and algae for pharmaceutical use.
Being aware of the differing areas of innovation, as well as any geographies that are becoming R&D hotspots, are important considerations when investing in patent protection.
In increasingly competitive fields of innovation, businesses must protect their ideas in the right way, at the right time. Without patent protection, they could find it harder to attract investor interest – and the commercial value of their innovations could be undermined, or even lost altogether.
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Content published by Professional Engineering does not necessarily represent the views of the Institution of Mechanical Engineers.