Today I’m going to help you to avoid a very common patent pitfall. I encounter many high tech business owners, executives, and inventors who have the mistaken belief that if they’ve obtained a patent on the original version of a product that the patent will cover the product as a whole forever, but that is not true. In fact, a patent only protects what it describes and if you make an improvement to your product that isn’t described in your patent then the patent won’t cover that improvement (with limited exceptions). As a result it is critically important that you update your patent portfolio to cover improvements to your products as you make those improvements.
I specialize in patent protection for software. I represent many software and internet companies and if you’re in that space, then you know that the pace of innovation is extremely rapid and that products today can become obsolete in a few months to a year and that companies release new products every quarter–sometimes every month. Your company might release an entire new product line every year and therefore, if you assume that a patent you obtained on a version of your product three years ago covers all of the new features that you’ve put into that product in the last three years, then you are very likely to be wrong to be be leaving your company significantly underprotected and at risk. Those risks include that if you find a competitor copying your technology that you won’t be able to stop them because your patent portfolio wont cover the current version of your technology. Another risk is that if a competitor sues you for infringing one of their patents, that you won’t be able to use that old patent of yours against your competitor because it won’t cover anything that your competitor is currently doing.
My point today is to emphasise how important it is to continuously update your patent portfolio to cover the latest innovations by your company and by your competitors, particularly if you’re in a field where the rate of innovation is extremely high. What that means for you at a practical level in your daily work is that you want to be aware of and paying attention to any new features that you’re developing in an existing product. And try to catch yourself if you find yourself thinking, “We don’t need to patent this new feature, because the product that contains the feature has already been patented.” It is critical that you begin to distinguish commercial products from patented features, and to remember that a patent on one feature of a product doesn’t protect other features of the same product and may not protect future versions of the same feature.
The implication of all of this is that it’s important for high tech companies to have processes in place to always consider and evaluate improvements to their products for patent protection, whether or not they have obtained patent protection on previous versions of the same product. It doesn’t mean that you always have to file patent applications for every new development because it may not make sense from a business perspective to do that. But it does mean that you should at least be thinking about it, evaluating new improvements for patent protection and making a reasoned decision about whether or not to pursuit patent protection for new improvements rather than just falsely concluding that you don’t need to seek such protection because the previous version of the product has already been patented. If you’re wondering about whether this will cause the cost of your patent portfolio to sky rocket, it is true that filing more patent applications over time will cost more than filing fewer patent applications, but it isn’t true that the cost scales linearly with the number of patent applications. The cost of filing 5 patent applications on different versions of the same product usually is significantly less than the cost of filing 5 patent applications on unrelated features. In fact, when I work with clients, typically, the cost of filing the first patent application for a product is the highest and then the subsequent applications on the improvements are usually less expensive because we are able to leverage the time and effort that was invested in the original patent application. And if the subsequent improvements are relatively small, the cost of the subsequent patent applications can be significantly less that the cost of the initial one, so in fact, if you think of this from the perspective of return on investment, your return on investment can increase significantly over time as you obtain subsequent patents on improvements to the same product because you’re investing less in the subsequent patents and yet those subsequent patents can be just as valuable if not more valuable than the original patent.
Also remember that the original patent is an asset that in most cases will have a diminishing value over time. For example, if you obtained a patent five years ago, and today you find a competitor who’s copying you, that original patent may not cover what the competitor is doing today. Instead, you may only be able to block the competitor if you have obtained a patent more recently on more advanced technology. In such a situation, the newer patent has a much higher value than the original one. Similarly, if you obtained a patent five years ago and a competitor sues you for patent infringement today, and you want to find a patent in your own portfolio to use to counter sue the competitor, it will be much more likely that a newer patent of yours will be one that the competitor is infringing. And that’s another way in which the newer patents have higher value than the older one. So, the situation is more complex than you may think and is in my experience the opposite of what many people think about the value of patents over time if they have not worked closely with a patent attorney to maximize the value of their portfolio.
I encourage you all to think just as much about continuously updating your patent portfolio as you think about developing improvements to your company’s technology. The two go hand in hand. If you want to reap the benefits of your company’s latest technology developments, make sure your patent portfolio protects those latest developments, and don’t merely assume that your older patents protect your latest innovations. I hope you find today’s tip helpful for avoiding a very common patent pitfall that can have serious negative consequences for companies so that you’ll be able to avoid falling into that trap in your own company.