What’s the best patent strategy for SMEs? If you’re filing patents then you know that there seem to be endless options and decisions. It’s confusing, it saps your time and it costs you money. Here I give you a plan that will get rid of those troubles that will work for the majority of SMEs. It minimises costs and means you know exactly what you should be doing at each stage. No more head scratching.
Complicated, boring and there’s no help
Just about every technology start-up, scale-up or SME wants to get patents. And that’s often the right thing to do – they help secure your market position and are attractive to investors and acquirers.
So someone at the company reaches out to a patent attorney. But that can be the start of a pretty difficult journey with an infinitely steep learning curve. If you don’t have some experience, or someone with experience to guide you (NB – that’s not usually your patent attorney) then you’ll end up learning things the hard way.
Patent law is complicated. It’s also pretty boring when you get down into it and not what entrepreneurs want to spend their time doing. This means that if you’re an SME engaging with this process then it’ll be confusing, suck up a lot of your time while you try to grapple with it, and probably be low down your list of things to do because it’s so dull.
Generally speaking, patent attorneys can’t provide the support you’re looking for. You want to know what you should do given a certain situation, but most patent attorneys can’t (or won’t) tell you that. They think they don’t know your business well enough. And because they’re slaves to the billable hour, they can’t spend the time getting to know your business well enough. The truth is, they’re not set up to help you.
But, honestly, even without an in-depth knowledge of your business, it’s still possible to generalise and give you a good patent plan that will do what most businesses need.
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Long letters with lots of options
In most cases, patent attorneys look to cover themselves by telling you every option that’s available. The standard approach is to send long letters with loads of boiler plate text and jargon.
These letters bombard you with information and options.
Do you want your application to publish? Do you want to file a divisional application? Do you want to file a PCT application? Do you want to request examination? What other countries do you want to file applications in? Do you want to respond to the examination report? Have there been any new developments of the invention?
Most people are left saying “we don’t know.” And so they make the best decision they can after a lot of pain, wasted time and leaving a decent risk they’ll be wasting money.
A strategy that works
In my experience working with lots of SMEs over many years the strategy below will take most SMEs up to the two and a half year mark of any patent application. It’ll balance what you need against what you can pay.
Beyond two and a half years, the process continues but decisions get a bit more complex and it doesn’t really make sense to discuss them in this blog post. There is still scope to generalise a strategy, but it’s best left to another post.
I’ve included rough costs at each stage of the strategy. These costs are based on the fees we charge at Matter. They include estimates of fees paid to the government (i.e. the UKIPO and WIPO – good luck understanding the info at that last link!) for processing your application and to overseas patent attorneys where needed. You can see that to get you to two and a half years will cost around £11,500. At two and a half years, you will need to pay for filing patent applications in each country and the costs can increase then. Budgeting for around £4,000 per country makes sense and a typical SME might file patent applications in 2-3 countries.
Why do it this way?
So why have I chosen the strategy above? Generally, it does everything you need and it minimises costs.
The real benefit though is that it does that and everything is decided up front so you don’t have to keep making decisions throughout the process. As my good friend Will Chelton said in a recent podcast episode, you need to set things up so you’re not making ad hoc decisions. Making the decisions up front saves you a lot of time and energy that you’d spend deciding on the hoof.
Month 1 – File a UK patent application first
Filing in the UK is a great option because the fees are low (around £600) and you get a report issued by the UK patent office (UKIPO) usually within six months of filing the application.
The low fees are good for obvious reasons. Getting the report within six months is great because it will tell you what documents the patent examiner has found that might mean your invention is not new or inventive, and will tell you their reasoning. This is really useful information for you to take on board when deciding what to do at the next stage of the process.
There are no decisions to make or any work to do for around 10 months after you file the UK patent application.
Month 10 – Review the UK report
After going to the trouble of getting the UK report, you’ll need to get it reviewed and get some advice. Don’t do this yourself as it’ll take you ages and the results will not really be any good. Instruct your patent attorney to review it.
Why do you want a good review of the UK report? Because you’re about to commit more money to this process and you want to know the chances of success before you do. What you want from your patent attorney at this stage is:
- What’s their opinion on claims that have might be granted, based on what is in the UK report?
- Will those claims protect your product?
If the scope looks good then you can go to the next stage. If it doesn’t then it might be time to abandon the process.
Month 12 – File an International patent application
Now you file an international patent application (known as a PCT application). The reason you do this is that it keeps open the option to file in loads of different countries for another 18 months. Investors and acquirers like that and it means you’re not committing to those countries until later. There’s additional cost for that, but it’s worth it.
You now don’t need to make any decisions or do any work for another 6 months.
Month 18 – Review the international report
Yes, you get another report here. This time it’s put together by a different patent office (the EPO) and a different patent examiner. The UK report is quick and cheap, but it doesn’t always go that deep so it’s not uncommon for you to find out about new documents in the international report that might impact on your application.
We review the international report at (or just before) 18 months because your patent application will be published at 18 months. If it publishes, your competitors and anyone else in the world can see what your invention is. If you end up abandoning the patent application then it’s best to do it before it publishes. We look at the international report now so you can make that decision.
Again, get your patent attorney to look at it, give an opinion on the claims that are likely to be granted and whether those claims will cover your product.
If they do then we move to the next stage. If they don’t then you might want to abandon the application.
You now don’t need to make any decisions or do any work for 12 months.
Month 30 – File applications in other countries
This is where things get more expensive. You need to decide which countries you actually want protection in. There are a few things to think about here and it’s best discussed in a separate blog post but a typical tech SME might file in Europe, the USA and possibly China.
The patent application process will now continue in each country simultaneously, but if you commit to this next phase then many of the decisions take care of themselves. Just be sure of the costs before you commit.
Getting the UK application granted
After all that, you’ll be left with a UK patent application that you no longer need. At the time you file the international application, the UK patent application is left hanging. Many large companies just abandon the UK application – like a rocket booster used to escape orbit, it has served its purpose and is jettisoned.
But for SMEs, there can be a use for the UK patent application so it’s often worth pursuing. Investors like granted patents. Sometimes that is misguided, but it’s true nonetheless. A granted patent is an indicator of innovation and can also demonstrate that the product you’ve come up with is actually new and not being done by anyone else. Not only are you saying it, but so is the UK patent office. So it can be useful to get the UK patent granted and in the UK you can do this fairly quickly.
The key point to remember here is that you’re not trying to push for the broadest patent you can. You can do that through your shiny new international patent application. What you want is to get something granted quickly that you can show to investors. So resist your patent attorneys urge to argue tooth and nail over every fine detail with the patent office. If something is offered by the patent office that can lead to grant, take it. If nothing is offered then ask your patent attorney to put something in that they can be very confident will be granted. You want this process done ASAP and as cheaply as possible.
No ad hoc decisions
So there you have it. All the decisions that you make in the first two and a half years of a patent application made up front. So you don’t need to melt your brain every time your patent attorney asks you what they should do. Just refer them to this blog post and discuss whether there’s any reason not to follow thew plan then you’re all set.