Despite the merits, or lack thereof, of some lawsuits, failing to file for patents is foolhardy. It’s a little like driving without auto insurance; if you get into a accident, even if you’re not at fault, it will be a messy proposition to extricate yourself.
If a patent claim gets to trial, it costs an average of $1 million for lawyers fees and research, Naughton said. Being on the losing end, especially if the court finds you have willfully violated a patent, will hurt much more. Counting profits, fees and penalties, a judgment could cost tens of millions of dollars, Naughton said.
“The first thing we did when we left our jobs to start the company is sit down and write out seven patent applications,” said Ed Hubbard, CEO of United Devices, an Austin, Texas, startup working in the new field of grid computing (define).
Like other entrepreneurs, Hubbard, and his United Devices co-founder, CTO Jikku Venkat, are frustrated with the USPTO’s sloth-like pace. They have been waiting more than two years for word on their paperwork. Their only solace is that their competitors must work within the same system.
“Everybody in the grid space has filed something at some point,” Venkat said. “None of us know when our patents will be approved; it’s out of our hands.”
Lawmakers, besieged with calls from constituents, companies, and tech industry groups, are pushing USPTO reform. Specifically they want to speed the process and reduce the number of “bad patents” that slip by inspectors.
It will require improved training, technology investments and workload management, according to recent report from the House and Senate Appropriations Committees. Industry watchers fret, however, that a meaningful overhaul could still be five years away.
In the meantime, lawyers and entrepreneurs recommend the following steps to safeguard your companies intellectual assets and to avoid running afoul of competitors:
Research “prior art” by searching patents on file, regularly reading industry Web sites, trade newspapers and magazines.
Retain an attorney specializing in intellectual property matters.
Assemble supporting documents such as date-stamped plans, e-mails and published papers that support your claims.
Set aside funds for filing and lawyers fees. Costs start around $10,000 per patent but can be significantly more expensive depending on their complexity.
Familiarize yourself with patent processes for Europe, Japan and Asia-Pacific so your international expansion isn’t hamstrung.
Be patient. The wheels turn slowly in the nation’s capital. Many tech entrepreneurs wait nearly three years for word on their application.
Online resources:
U.S. Patent and Trademark Office
Cornell University Law School
World Intellectual Property Organization
Association of Patent Law Firms
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