Intellectual Property Strategy

Intellectual property (IP) is an important strategic business asset for innovators to mitigate future legal settlement costs, establish barrier to entry for competitors, develop short-term business revenue via royalties, and many more. The strength of the intellectual property portfolio is a major consideration factor for investors to determine whether or not to fund a company. Additionally, license agreements may be a potential early source of revenue and serves as an important form of collateral for both innovators and startups. This knowledge article provides a basic overview of some considerations for developing an intellectual property strategy for healthcare innovators. In the United States, more than 2.1 million patents are enforced by the US Patent and Trademark Office (USPTO) and navigating the patent process can be complicated; therefore, having qualified legal guidances from professionals is highly recommended*.

Patents

An intellectual property strategy may be considered in two phases. During the early phases of a company, innovators should be mindful of the patentability of their innovation while maintaining the freedom to operate. Once the startup is more established, innovators should maintain an ongoing intellectual property portfolio management process to extend internal patent fillings and to monitor external environment for changes in the patent landscape. It is not uncommon for established players to enter a space after the innovator established a proof-of-concept, therefore, continual monitoring of the patent landscape is an important strategic consideration.

Provisional Patent Applications

First, innovators must determine whether an invention is patentable and whether patents or public knowledge disclosures (prior arts) already exists.

innovators often asks whether or not to file for a provisional patent application or to proceed directly to a full utility patent. Directly pursuing a full utility patent would start a 20 years protection period starting from the date of the filing. A well prepared provisional patent can extent the protection period by 1 year. The provisional patent may also be used to established a priority date and is often faster to obtain compared to a full utility patent. However a poorly filed provisional patent can create future troubles and additional legal expenses in the long-run. Once a provisional patent is filed,

US Patent and Trademark Office (USPTO) provides a detailed step-by-step guide for innovators and inventors looking to file their patent. This is an immensely helpful resources for innovators looking to explore the patent filling process:

Action: USPTO’s Overview of Patent Process

Considerations for Scaling IP Strategy

It is generally not possible to add or modify the provisional patent after it is filled. If there are a substantial improvement or discovery related to the initial invention, the innovator has the option to file a new provisional application or initiate a full utility patent application including both the original and the new discovery. Depending on the innovator’s strategic objectives, one may aggregate all of the intellectual property assets into a single provisional patent or file multiple provisional patents covering different areas. Healthcare innovators who are considering licensing as a business model, they may wish to consider isolating certain aspect of the technology as its own patent to facilitate the licensing agreement process. innovators who have a technology that releases the product at an interval may considered aggregating all of the intellectual property assets into a single provisional patent. Once the initial provisional patent application is filed, the innovator may think it is beneficial to file additional provisional patent application in the years leading up to the first provisional conversion deadline. common strategic consideration to note, especially for healthcare industry, is that the priority date would become the date of the second filing.

Monitoring and Intellectual Property Portfolio

A vast number of healthcare companies are technology companies, innovators must operationally consider the intellectual property portfolio of the company. Large companies in this sector oftentimes have a strong legal team dedicated to working with its scientific staff to position its intellectual property portfolio. Legal experts can draft patent strategy to protect a technology space. As an innovator, it is imperative to monitor the patent landscape to monitor competitor’s behavior.

Open Source and Patent Pools

In Development

Action: eLife

Technical: Google Patents Search Lens

Resources:

USPTO’s Inventor and innovator Resource Portal

Version History

• 07.20.19 Initial Revision

*I am not a lawyer and this content is not intended to constitute legal advice.

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