Three pitfalls to avoid when optimizing your Intellectual Property strategy

I am Patrick van Ginneken, patent attorney at AOMB Intellectual property B.V. For about 8 years, I have been working full-time in the world of patents. In that role, I help innovative technology companies, including startups and SMEs, but also massive listed companies. Particularly from the southern Netherlands/Limburg to establish patent rights themselves (worldwide) for their inventions, but certainly also to ensure that they are not bothered by other people's patent rights.

I studied aerospace engineering in Delft (BSc and MSc). I then followed professional training to become a Dutch and European patent attorney, where I successfully passed the relevant state exams and took the oath. Furthermore, I have now been on the list of officially registered patent attorneys for several years.

As a patent attorney, I help entrepreneurs throughout Limburg to optimize their Intellectual Property (IP) strategy. Some giant corporations, but mainly SME entrepreneurs. I say Intellectual Property strategy purposely because, in my experience, all successful innovative business make use of an IP strategy. Such strategies often contain highly similar building blocks. Please allow me to share three building blocks of such a strategy with you.

Irrespective of whether you own any IP assets yourself, you should always be aware of the IP (patents, trademarks, design rights) owned by the competition. IP rights are exclusive rights, which can be enforced to stop competitors from making use of your unique technology / design / name. A very nice asset to own, but a very unpleasant asset to be confronted with.

After having invested a lot of time and money to develop a successful new or improved product for your business, the last thing you want is to receive a cease and desist letter from one of your competitors, claiming that your product infringes one of their IP rights. Although one cannot prevent that such letters are sent, one can – and: should – assess the risk that one’s new or improved product infringes an IP right held by the competition before launching a new product. In that respect, a common misconception which should be debunked right away is that owning an IP right yourselves means that the IP rights of the competition cannot be infringed. They most certainly can.

On this topic: when attracting investors, a “Freedom to Operate” assessment is often required by them. A well-prepared start/scale-up company has such an assessment at hand when speaking to potential investors, and should not be surprised by questions about this topic.

Many entrepreneurs think that they are set once they have patented their product. This places too high an expectation on a patent right. In my experience, a competitor who is just as smart as you and goes through the same research efforts as you have done, can often come up with a competing product that is “designed around” your patent. Direct copying is, however, not possible, so you gain a competitive advantage nonetheless. By continuously improving your product – and protecting the most important of these improvements, the puzzle to come up with a “design-around” product becomes more and more difficult. This is the reason that companies such as Philips and ASML file hundreds – if not: thousands – of patents a year. For the same reason, you should not rely on a single patent either.

If you have a unique process with which you can make a certain product that is competitive e.g. because the quality is better, the cost price is reduced, it combines two materials which could not previously be combined, or for any other reason, it is not always wise to patent it. Patent applications are published 18 months after they are filed. So, after 18 months, the competition can read all about your unique process. In particular, when the unique step in your process cannot be detected in the end product, it may not be wise to patent such processes. Namely, if the unique step cannot be detected in the end product, how are you going to prove that your patent is infringed? This can be a hurdle which is impossible to overcome, resulting in a low-value patent. In such cases, keeping your process secret may be the better option – and it will certainly cost you less

A similar reasoning holds for software which cannot be reverse-engineered by using it.