WSID #4: One last step to a patent? [Part 1]

This article is part of the “What Should I Do (WSID)?” series where I discuss various scenarios involving intellectual property and business. Topic suggestions are always welcome.

“I just received a Notice of Allowance from the USPTO! What should I do?”

Congratulations! Your hard work (and your patent agent/attorney fees) have paid off! Now all you have to do is to tell your patent professional to pay the issue fees, you’ll get your pretty ribbon copy of the issued patent from the USPTO and you’re done, right?

Not exactly. Here, I’ll discuss the IP strategy considerations for deciding what to do after a Notice of Allowance. In Part 2, we’ll take a look at some of the mechanical aspects of dealing with an allowed patent application.

Do you know where you are going on your IP journey?

Let’s get philosophical about how this allowed patent application fits with your overall IP strategy.

You do have an IP strategy, right?

How does this allowed application fit into your overall IP strategy? Here are three of the many topics to consider and the questions you should ask yourself.

  1. Budget
    First and foremost, can you afford this patent? Conversely, can you afford NOT to have this patent? How do your current or potential future investors feel about IP?For instance, are you a software company? Some high-profile VCs have gone on record to say software patents should be abolished (e.g., Brad Feld saying “Software patents are weapons of mass extortion”). If you’d like to get funded by one of these VC firms, then you may consider whether or not you want to move forward with any of the options we’d discussed in the related post.

    If you do decide that patent protection is a valuable asset for you, then consider the maintenance fees that will be coming due in future years. The current patent maintenance fees for a small entity (i.e., corporations with less than 500 employees) are $800 at 3.5 years after issue, $1800 at 7.5 years after issue, and $3700 at 11.5 years after issue. These numbers can really add up, especially if you have multiple issued patents within a patent family as well as related international patents. If the additional value to your company created by your new patent is less than the maintenance fees, which could potentially go up in the future, then you may consider cutting your losses now before paying the $480 patent issue fee.

    One note: you may have read a book or attended a seminar about how you can save money by preparing and filing your own patent application. I’ve even heard an instructor of a webinar make a statement to the effect of, “just put together a few presentation slides about your invention and file it as a provisional patent application for $130.” Be sure that you understand the pros and cons of taking this approach. For instance, while you may have saved some money on attorney fees at the filing, you may end up paying quite a bit more when you are ready to file a non-provisional utility application within a year of the provisional filing date. Worse yet, there is a possibility you may have disclosed too little detail about your invention in your provisional so that you’ll lose what you thought would be your IP priority date, or even lose a funding deal if your potential investor views your provisional as being inadequate. If you choose to go without the advice of experienced IP counsel, proceed at your own risk.

  2. Timing
    Do you have an upcoming pitch event where you’ll be pitching your company? Are you currently negotiating a term sheet or Letter of Intent with a potential investor? Is your product almost ready to launch? Are you going to be presenting a technical paper regarding your invention at a conference? Will you soon be meeting with a potential business co-founder?Any time you have scheduled a significant interaction with an outside entity, the status of your IP and strategy can affect your corporate valuation and perception. It’s powerful to be able to say your patent application has been allowed by the USPTO, and even more powerful to state that you have issued patents.

    If you have a significant event coming up in the near future, it may make sense to pay the issue fee as soon as possible to have a patent in hand. If you don’t have a pitch or presentation scheduled, you can be more strategic in how you proceed with additional filings to protect other aspects off your invention, alternative embodiments of your product, potential new features, etc. In this case, your IP counsel may request as much time as possible to put together the appropriate filings. The usual deadline for the payment of the issue fee is three months from the mailing date of your Notice of Allowance, and extensions may be available.

  3. Defensive or Offensive Strategy?
    Like sports, you can use your IP defensively or offensively. Defensive IP is, for example, if you are focused on protecting your own innovation and competitive edge so that others can’t (hopefully) step into your market space. An example of an offensive strategy is if you proactively file for trademarks and patents around your products as well as any anticipated products by you and others so that, if others try to get into your competitive arena, you can enforce your intellectual property against your competitors.If you’re a product startup, you likely won’t have the funds to pursue an offensive strategy so talk with a patent professional, whether a patent attorney or patent agent, regarding how best to protect your core ideas. If you’re instead considering the offensive strategy, make sure you thoroughly understand the process and risks — find an IP professional with specific knowledge of IP enforcement and offensive patent strategies.

The three large topics above are just some of the considerations that come into play as you move forward with your IP strategy. A knowledgeable IP expert with legal, business, and technology development experience will be able to better help you navigate the potentially choppy waters. All the best for your safe travels in your entrepreneurial journey.

About the Author and Disclaimer: Yoriko Morita has worked with innovators in a variety of contexts, in a law firm working for inventors, as in-house IP director, and as a licensing professional. She currently helps clients with such IP-related questions, as well as developing integrated business/technology/patent strategies, through her company, Patents Integrated. The contents of this article are intended to be informational only, not legal advice. The reading of this article does not establish an agent-client privilege between you and Patents Integrated, and Patents Integrated is not responsible for any damages arising from your use of the information in this article under any circumstance. Your use of the information in this article is at your own risk, and you should seek the advice of a licensed legal professional regarding your own specific situation.

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