Posts by: Tommy Somlo | (1) posts

Can “bad” patent applications be profitable?

I’d like to share with you a few ideas on a subject that is not entirely uncontroversial – not least in the light of comments over the past year from the European Patent Office and Alison Brimelow about “global warming” within the IP system. I intend to explain why it can be profitable – at least, for certain innovations – to systematically file (so called) “bad” patent applications that are allowed to lapse once they have been published.

Here at Awapatent we make it clear that our job is not about creating intellectual property protection, but about helping our customers to turn their innovations into business opportunities – sometimes, but by no means always, with the help of IP rights.

This means, therefore, that my job involves determining how my clients can maximise the profitability of their innovations rather than simply working out how to provide legal protection for these innovations. In the case of one client, for example, we have developed a highly useful system for categorising innovations based on their function and market value.

1) Innovations that win consumers: innovations that attract consumers away from competitors who do not have access to the same technology should be protected by patents in the relevant markets.

2) Innovations where patent protection would undoubtedly produce a commercial benefit, but which nevertheless are of lesser strategic importance: one example of this is when using the patent as a bargaining chip when negotiating with subcontractors and other stakeholders.

3) Innovations that can not be used to secure a competitive advantage, but where it is important to establish freedom to operate.

The classic method for establishing freedom to operate is to describe an innovation in publications, particularly in scientific journals. In recent years it has also become possible in some instances to publish a description of the innovation in prior art databases such as ip.com. In theory this is sufficient to make it impossible for a competitor to protect the innovation by patent. In fact, theoretically, all I would need to do is simply to publish the details on this blog, provided that it is subsequently possible to provide convincing proof to confirm the date of publication. The problem in relying on these methods, however, is that even skilled patent examiners can miss these sources. The fact is that, when it comes to determining the existence of relevant prior art, they are considerably better at searching through patent databases than they are at searching in any other sources.

The strategy we use is therefore quite simply to file patent applications even for innovations for which we are only endeavouring to ensure ourselves of freedom to operate – and to let these applications lapse as soon as they have been published. A patent application published by USPTO, EPO, WIPO or the UK Intellectual Property Office is the best guarantee for ensuring that patent examiners all over the world will find it. The cost of the application is, of course, one factor to be borne in mind when making such a choice; another is which market the innovator is interested in. The cost of formulating the claims is, however, negligible, as it is the description itself that is of interest.

One possible counter-argument is that patent applications involve far more expense than, for example, a prior art database publication. But this does not take into account the whole picture. A published patent application is a much stronger assurance that no competitor’s patent application will be wrongly approved: this reduces the risk of having to initiate very costly oppositions, appeals procedures and court cases, which can result in costs far in excess of the expense of filing a patent application.

Tommy Somlo, European Patent Attorney