SNAPSHOT PATENTING -- A PRACTICAL ALTERNATIVE TO PROTECTING INNOVATION, PART 1

by Michael Q. Lee and Michael V. Messinger

Let's say you're in the midst of developing a new product or refining an existing product, during the course of which your team will be creating valuable new inventions. A decision is made that it probably makes sense to patent at least some of these inventions.

You're then faced with a fundamental question: when do you start the patent process? That is, at what point do you start trying to patent the inventions that are being created during the development process? This is a critical issue that can impact the scope and value of any patent protection that you eventually obtain.

This week, we describe the Milestone approach for patenting innovation. This is the approach that is commonly used, and we describe its potential strengths and weaknesses. In next week's Advisor , we'll discuss an alternative patenting strategy called the Snapshot Patenting approach.

Milestone Patenting

Most companies use an event-driven patenting approach. According to this "milestone patenting" strategy, the patent process is triggered upon the occurrence of some event or milestone. The release of a new product is a common milestone that triggers the patent process. Sometime around product release, patent attorneys are brought in to help management identify key inventions embedded in the product. Patent applications to cover those inventions are prepared and filed at the patent offices in the US and perhaps elsewhere throughout the world.

There are a number of potential problems associated with milestone patenting. The most significant involves the potential loss of patent rights. The basic patent rule is you must file your patent application prior to commercializing or publicly disclosing your invention. Otherwise, you run the risk of losing the ability to patent the invention. These rules are called "statutory bars" because they bar a company from patenting its inventions.

For example, if you openly describe your invention at a trade show prior to filing a patent application, then you've probably lost patent rights in some parts of the world. The US provides a one-year grace period to file your patent application. Your rights in the US are preserved as long as you file your US application within one year of publicly disclosing or commercializing the invention. Elsewhere (such as in Japan and the European community), you lose patent rights as soon as you publicly describe the invention.

The problem with milestone patenting is that it too frequently results in patent applications that are filed too late. If you don't select the right milestone or if you wait too long to trigger the patent process after the milestone occurs, then patent rights could be lost. For example, "new product release" is not an appropriate milestone if your sales team is marketing the invention 18 months before product release. In such cases, "start of sales campaign" would be the better milestone to preserve patent rights. This earlier milestone also allows a team to identify and capture innovation in broader areas such as business methods and to prepare a patent portfolio that is better suited for an offensive patent strategy including licensing.

There is another aspect of late filing dates. A product is made up of a number of inventions, some of which are completed prior to others. Under the milestone patenting approach, all of the inventions are accorded the same filing date at the patent office because all of the inventions are filed at the same time (i.e., when the milestone occurs). Ideally, it would be better to file the patent application for a given invention as soon as the invention is completed (instead of waiting for the entire product to be completed), since a patent rumble usually favors the party with the earliest filing dates.

Another potential problem with milestone patenting involves new innovation. Technology evolves over time, and products change as technology improves. The patent applications that you prepared at the new product release or start of sales campaign milestone might not cover the software tweak that you included with version 2.0. Oftentimes, however, it is those "quarter-turns-of-the-screw" innovations that represent a company's competitive edge. Key technology will be left unprotected (and free for competitors to use) if the milestones selected by a company are too coarse.

Software is especially potentially vulnerable under milestone patenting. Often software is developed by using known programming techniques and tools to solve a problem or execute a design. Under US patent law, a patent may be granted for being the first to spot a problem or need, even though a solution may be well-known once the problem is identified. When deciding whether to patent their work, programmers often focus on the well-known programming techniques that they used to develop the work, instead of focusing on the work itself. As a result, programmers often fail to properly appreciate the broader overall value of their innovation to their company. Bringing a business and patent law perspective (in addition to the programmer's technical perspective) to identify patentable and valuable software innovation is especially important in the software space. However, on the eve of a major milestone, competing demands around the time of product release make it difficult for a team of marketing, business, engineering, and patent law people to meet effectively -- much less identify and leverage new ideas. Patentable subject matter, often worth a multiple of the amount spent to secure a software patent, is left on the table.

The difficulty in identifying patentable software innovation of value to the company is further exacerbated by the iterative nature of software development which frequently does not lend itself to bright-line moments with clearly discernable patentable subject matter. On the contrary, as successive milestones are reached, programmers may develop more tunnel vision as they race to product release, thereby becoming more susceptible to undervaluing innovation and overlooking patenting opportunities.

Next week, we discuss an alternative to the milestone approach: the snapshot patenting approach. Snapshot patenting is time- (or interval-) based. We discuss how this alternative approach addresses the potential shortcomings of the event-based milestone approach.

-- Michael Q. Lee and Michael V. Messinger