Patents: a view from the front end

Norman Apsley
CEO at NI Science Park Foundation Ltd
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Post date: Thursday, 26th January 2012

This article argues that continued attention to patents, their creation and exploitation, is as essential today as ever it was. A strategic approach should complement the move towards open innovation; only together will they promote the wider dissemination of ideas and technologies.

Intellectual Property (IP) is the name given to all creative ideas and expressions that have commercial value. Most nations have recognized the value to their economic success of attaching legal rights to IP and these are patents, know-how, copyrights and trademarks. Each has a distinct application, business value and set of protocols. Patents, the subject of this short article, apply to inventions, processes and products and are probably the most difficult and expensive.

With the advent of the internet, open innovation, the antithesis of IPR, has become a mantra for some and it would be easy to give in to the mounting pressure; indeed I have some sympathy with it, myself. I am not a lawyer but I learned, in my roles as researcher, manager and mentor, of the importance of patents. I suggest that our technology creators still need them and ought to learn how to use them strategically.

A patent describes a device or process which is useful and which has never been openly disclosed. It must be described in sufficient detail for one “skilled in the art” to replicate it; this is the key to a patent. It is the public disclosure, which spreads the invention. In return, society rewards the inventor with a period (c. 20 years) of monopoly.

20 years is not a long time!

The Patent will need to be written, filed, defended and, hopefully, granted. Now within a year to 18 months, it goes international, thanks to the Patent Cooperation Treaty (PCT), which today gives the inventor a choice of 144 countries. To gain the widening geographic monopoly, the patent now has to pay fees to and run the gauntlet of patent officers and potentially interested parties in each of the chosen countries.

They will subject it to a barrage of attacks, questioning its novelty, utility, obviousness and its interference with other patents. The constant aim of the attacks is to kill it or to restrict its coverage. Should the patent fail the testing or should the inventor fall short of time, money or patience, the patent will be dropped and automatically disclosed to the world for free use.

It is easy to see that this is an expensive and risky process. Even if done by the inventor, the fees to different governments alone may total £20-30k; if agents are used this will double at least. It is deceptively cheap to start (c. £1,000) but still, in my view, it is not a process to be undertaken lightly. It is vital to remember that BUSINESS is what patents are about and a plan for investment and profit making is essential.

The benefits from all the work described above is that, if successful, an asset is created that can be sold, assigned, licensed or otherwise used to protect the core of a new business. The risks are high! Of all patents: 90% make nothing; 9% make costs; 1% hit the jack-pot.

So how then to proceed in this arcane world.

First adopt the good practice of having one’s work regularly notarized to protect future use, whether for research or for business, while decisions are made to keep it secret or to publish. Actually, “undisclosed” is a better word than “secret” and a better practice. The “wisdom of crowds” holds true and I have long favoured the early exposure of the idea to valued and trusted colleagues under appropriate and legally supervised conditions to discuss and to form a strategy for monetizing the idea.

The next steps will depend on the nature of the patent. It is very useful to separate patents into three categories: primary, secondary and tertiary.

In reverse order, Tertiaries cover only one product in one market sector, while Secondaries cover multiple products or markets. Their exploitation needs much market knowledge and, in my view, a research house or a lone inventor would do well to find an experienced partner already with a market presence. They should be transferred quickly (after grant but before PCT) for advantage. Primaries are of most interest and value. They are disruptive in multiple markets and cover multiple products. They deserve great attention, not least because they are also the patents that the UK (and Europe generally) has been poorest at exploiting.

Markets divide into those that operate with government intervention and those that are purely commercial. Defence is an example of the former while telecommunications has become a prime example of the second. The two types of market behave in fundamentally different ways and a Primary patent may well cover both.

In conclusion, the strategic use of patents is essential to our community of science parks. We must continue teaching the basics of IPR, alongside open innovation, for as long as the Patent Cooperation Treaty continues to grow its membership.

This article first appeared in UKSPA's Innovation into Success. To read the entire publication, click the ebook below. 

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