Written by Carel Smit, a former patent attorney and entrepreneur, now author and speaker dedicated to IP awareness and education. More of his writing can be found at carelsmit.com.
Read part three of Carel's blog.
To secure investors we compiled a technical specification for the machine and filed a provisional patent application, followed by an international application a year later, all of which culminated in a number of patent filings in various countries.
Usefully, our patent portfolio came massively in handy when one of the co-inventors became increasingly paranoid, thinking that we wanted to boot him from the company. He threatened to start up his own company and make the product in competition with us. But IP came to the rescue when we pointed out to him that the idea was not his to do with as he pleased – we had made sure that all of us had signed over all the IP relating to the product to the company. This meant that he had signed it over to the company we were all part of, so even if he knew how to build it and could start up his own company, we (the legal entity, i.e. the company) would be able to stop him from doing so with the patent rights we had secured if he went rogue. This is something that happens A LOT in new startups, so it’s important that you ensure that all your IP is in one safe harbour that everyone has a stake in.
Something similar happened when we realised that we had failed to secure a key alternate domain name for one of our product names. We heard through the grapevine that one of our distributors tried to register the domain name in their own name, but we were able to thwart this under threat of legal action. We had filed a trade mark application right at the start of the process - if we didn’t have a trade mark registration, it would have been very, very difficult, if not impossible, to have achieved this.
Finally, we filed design applications for the unique control panels and the probes that we had designed. We had done this as a fall-back position, in case our patents turned out to be rubbish or were narrowed down too much during the patent examination process locally and abroad. We also made sure that all user manuals, charts, and artwork were assigned to us by the outside creators we had used, and we marked all of our written works with the copyright © symbol so that it was clear that we viewed this as being our unique copyright.
Because I have not only been a supplier of IP services, but also a user of the system, I have unique insights into the innovation and product commercialisation process – and I can tell you that two people with an idea but no technical skills will get absolutely nowhere without the intellectual property system. In our case, it led to us being able to secure our rights, validly claim that we had patent pending technology (which kept competitors at bay, even while pending), and use our IP portfolio to secure discussions with governments, overseas distributors, and collaborators that could otherwise have crushed us. Of course, it also helped ease discussions when the company was in the process of being sold to a much larger distributor – discussions could be open and frank, as we knew that our ideas and products were protected.
The old “sword and shield” model – where companies file patents to enable them to pick a fight or merely to deter competitors – is one tiny part of a solid IP strategy and, to be honest, litigation is a terrible business model for startups.
I firmly believe that IP comprises amazing tools for collaboration and should be used to build bridges, corral potential partners, and to add value to a burgeoning business.
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