Types of Patent Strategies

Types of Patent Strategies

---

Although names may differ among strategists, I’ve found that four consistent categories exist relating to strategy classifications: core technology, market protection, defensive strategy, and offensive strategy.  Building an effective portfolio is much like building a medieval castle.

For example, a castle is composed of several parts: outer and inner walls, a moat, embankment, arrows, catapults, a system of allegiances and agreements with other nations, spies, and an army, to name a few.  In IP terms, core technology patents represent the walls of a castle.  Such walls protect the very core (e.g. the treasure, etc.) or raison d’etre of the castle.  Market protection patents deal with allegiances with other nations (e.g. companies, etc.) as well as the ability to send out spies to see when enemies may be approaching.  Defensive patents are precisely as they sound, and include the moat, the embankments, and the army that protects the core technology.  Lastly, offensive patents are the arrows, the catapults, and the battering rams.

As can be seen, maintaining a castle requires more than simply constructing solid walls – spies must be sent out, armies must defend, and supplies must be on hand to respond to an attack, or on the other hand, to go on the offensive.  IP can and should be viewed in the same exact way.  As shown in the following figure, to simply protect the “core” technology may leave three-fourths of the circle unprotected.  An effective strategy must therefore take into consideration all four type categories.

For the most part, core technology and market protection relate to patents.  However, both trademarks and patents may be asserted in an offensive or defensive manner. In view of this, effective protection of a company may require more than one type of intellectual property.  Don’t forget the other IP classes analyzed before (e.g. trade secrets, copyrights, etc.). 

Core Technology Patents

Core Technology relates to the core concepts invented.  As illustrated in the following figure, the company may have Core Technology 1-3.  Such core technology may have overlap between the technologies, as well as between all of the technologies. 

Core technology patents may therefore concentrate on the most “core” part of all of the technologies.  Once this initial “core” is protected, then we may expand outward from the center and protect other technologies.  Protecting core technology may therefore proceed in stages, with the first stage protecting the most “core” technology, and subsequent stages protecting adjoining technologies.

From a practical perspective, we may accomplish this by filing multiple applications, each targeted at a different aspect of the “core” technology.  The focus here is on writing narrow claim sets that are directed at protecting, at a minimum, the most fundamental aspect of the technology.  Each of the narrow claim sets may be directed to a specific aspect of the core technology. 

Market Protection Patents

Often, the most valuable patents are those that anticipate where the market is going, oftentimes many years before getting there.  Market protection patents deal precisely with this strategy – they anticipate where the competition is headed, where the market will end up, and what consumers will desire.

Steve Jobs was a master at anticipating what the consumer would want.  He is known to have said, “It is not the customer’s job to know what they want.”^[1]See, e.g., Scott Anthony, “3 Ways To Predict What Consumers Want Before They Know It,” available at http://www.fastcodesign.com/1669070/3-ways-to-predict-what-consumers-want-before-they-know-it.   He made it his job to figure out what consumers wanted.  He obviously succeeded at many levels given the popularity of the ipod, the iphone, and the ipad.  Although we will analyze more fully the Samsung v. Apple lawsuit later on, it is worth noting that each of those inventions was accompanied with several layers of patent protection.^[2]As an example, check out a number of patents relating to the ipod.  See, e.g., http://www.patentlyapple.com/patently-apple/2012/05/apple-wins-major-ipod-user-interface-systems-patents.html (at a … Continue reading  

Market protection patents are some of my favorites to work on.  They focus very much on thinking outside of the box, on the different ways (or embodiments as they are called) that the invention may be applied.  Although some patent attorneys rely on a general understanding of a POSITA to supplement the information in the specification, a patent will be stronger if specific embodiments are actually disclosed.  The more that is disclosed, the easier it will be to convince a jury that the invention was intended to be construed in such a manner. 

There are several types of market protection patents.  First, and consistent with what I have been describing, the specification may be very in-depth and describe how the invention will be used or applied (e.g. anticipating where the market is going).  Although such types of patents may have several hundreds of pages (to cover every embodiment), I would add one caution.  As the page number increases, the USPTO will tack on some significant charges.  For example, for every 50 pages over 100 pages (application size), a fee of $400 will be applied.^[3]See, e.g., USPTO Fee Schedule, available at http://www.uspto.gov/web/offices/ac/qs/ope/fee031913.htm.  Smaller fees may be applied for small or micro entities.

Second, market protection patents may include “fence” patents or “design around” patents.  The term “fence” patents may include patents which fences in your competition.  For example, if your competition disclosed (or received a patent for) a software algorithm dealing with displaying a calendar, a fence patent may be one that modifies the original base elements (apply a similar algorithm to an email system or to a photo system, etc.) or otherwise limits the freedom of the original elements in some manner.  By limiting the options of a competition, it effectively hedges them into one embodiment and prevents them from expanding into other areas of the market.

Fence patents may also refer to a proactive act by the patent holder.  For example, after receiving a patent, a patent owner may then apply for several other patent applications, each of which focuses on a substitute or alteration of the original patent.  By acting in this manner, the patent owner would effectively hedge in the competition by preventing them from expanding in the market off of the original patent.

A design around patent is similar to the second fence patent that we just discussed.  If the competition has disclosed a circuit board with element A, a design around may include designing a similar circuit board but with element B.^[4]Of course such a patent application would have to still be compliant with 35 U.S.C. § 102 (e.g. novelty, etc.) and § 103 (e.g. obviousness, etc.).   This may in some regards fence in the original patent (as we discussed), but more importantly, this gives the patent applicant the freedom to use the disclosed embodiment.  So although one possible consequence of a design around patent may be to fence in the competition, the focus here is on giving the patent applicant the freedom to make and/or use the intended product.

Design arounds are very much a reality, especially in high technology.  For example, a first company may discover that a component of their system may infringe a patent associated with another entity (e.g. a competitor, etc.).  To avoid any problems, the first company may modify the component by coming up with an alternative design which does not infringe the claims of another patent.

Third, market protection patents may further include “live” patents.  The idea behind this categorization is simply to always have a live family member in existence.  By “live,” I mean a family member which is still going through the patent review process.  In most instances, this issue comes up when a patent application is nearing issuance.  Rather than letting the family die, in the sense that no further review will occur with respect to the patent claims once the patent is granted, the patent owner may file a continuation or a continuation-in-part which effectively keeps the contents of the specification alive (i.e. subject to review, etc.).

Keeping a patent application alive is beneficial for a variety of reasons.  For example, claims may be modified, or new claims may be drafted based on existing support in the specification.  In other instances, having a live family member is useful for defensive and offensive reasons, as we will analyze below.  In short, keeping a family member “live” ensures that modifications can more easily be made.

Defensive Strategy for IP

As we indicated above, defensive strategies are precisely as they sound – they are intended to be used defensively.  For example, the need for a defensive patent/trademark may arise when a company is faced with a lawsuit, when the company is actually in the midst of a lawsuit, when a licensing agreement is being renegotiated (e.g. cross licenses between companies, etc.), or in response to any action taken against a company.

In order for a defensive patent to be most effective, it should be narrowly tailored to the intended target.  This is sometimes hard when drafting a claim, as it may be many years before an infringing product is released.  For this reason, it is good practice for a patent family to keep at least one member alive via a continuation strategy.  This ensures that down the line, the patent applicant can amend the claims to more clearly show the infringement which is occurring.

With respect to trademarks, keep in mind that they are specific to the market to which they were applied for.  As such, it may make sense to apply for multiple trademarks, each in a different market of use associated with your client.  Federal trademark registrations provide the registrant with presumptive validity of the trademark, and a registration can become “incontestable” once registered for 5 years on the principal register. This effectively means that a trademark owner who wants to assert prior rights against a registrant must do so within 5 years of registration or they may lose their rights to do so even if they have seniority. 

Offensive Strategy for IP

The last of our categories includes offensive strategies.  Generally, these applications are prepared in the same way as defensive strategies.  The difference however between defensive and offensive strategies is simply the manner in which they are used.  Defensive assets are intended to be used to respond to action taken against the patent holder.  Offensive assets are drafted with the intention of being used or asserted against other entities.

Offensive assets need not be used solely in litigation however.  For example, they may be used for out-of-court licensing agreements, or aid in licensing negotiations (being asserted offensively rather than in defense to an action).  Additionally, “incontestable” trademarks can be used offensively by asserting rights even against a senior user in certain cases.