How to Avoid Potential Loss of IP and Confidential Information for Start-ups

(originally published by FORGE)

The innovative idea behind your product is what makes it exciting and valuable to consumers and investors. As a start-up leader, your business success depends on keeping your innovation yours.

FORGE recently hosted a panel discussion for their start-up network describing how to legally protect intellectual property, from patents to non-disclosure agreements. Guests were attorneys Brandon Blackwell from Wolf Greenfield and Elissa Kingsland from Mintz, and the co-founder of water treatment company Elateq, Dr. Ljiljana Rajić.

Blackwell has been prosecuting patents for more than fifteen years. He also holds a PhD in chemical engineering from MIT.

Kingsland is a patent attorney specializing in advanced materials, chemistry, and medical and consumer products. She has spent her entire legal career in IP law.  

Rajić is an electrochemical and environmental engineer with a PhD in chemistry. She co-founded the company Elateq, which uses a proprietary process to make energy-efficient water purification technology. 

Together, they answered the most important questions for start-ups about protecting intellectual property (IP) and confidential information. 

What do start-up founders need to know about intellectual property? 

Your IP is what makes your company unique. To get investors interested, you need to offer something special and prevent other companies from copying your products and processes.

“Understanding and taking the right steps at the beginning is ideal,” Kingsland said. “It can be expensive, but filing provisional patents and trademarks and getting trade secret coverage is crucial to your success.”

Where should I patent my product? 

“The biggest but most important challenge to claiming and protecting your innovations is international protection,” Rajić said. 

“Figuring out where to file is tough,” Blackwell said. “Companies often overspend because they file patent applications in too many places. Your biggest markets to get patent protection might be China, Japan, Korea, Europe, and the US.”

Unfortunately, the non-US markets in this list also tend to have the most complicated rules and most expensive filing fees. In the US, written description support requirements have traditionally been less demanding, whereas in the EU and China, written description requirements tend to be very harsh, often requiring verbatim support in the application for any claim amendments you may wish to pursue. For prosecution in the EU especially, you’ll need to write your application with lots of detail.

What does a patent protect? 

A patent can protect the design or utility of a product. A design patent is appropriate when your product’s appearance is unique. For example, Coca-Cola patented its glass bottles. The bottle’s shape doesn’t change its function.

Utility patents protect a process or function, rather than appearance. Thomas Edison’s patent for the lightbulb focused on its mechanical design, not its aesthetic design. Utility patents are appropriate for a wide range of products, from a simple paperclip to an intricate jet engine.

Enforcing a utility patent can be difficult; a competitor might be able to avoid prosecution by, say, changing a component’s position from horizontal to vertical.

To protect other aspects of your IP and brand, you might use a trademark, service mark, or copyright. If you’re not sure whether it’s possible to patent your product, ask a patent attorney for advice.

When in the research and design process should you file for a patent? 

It’s best to keep patents in mind from the beginning. Elateq began its patent process early.

Rajić said, “As soon as we got data showing our new approach worked, we filed a provisional patent for the tech. To minimize reverse engineering, we did not include our proprietary electrode. That’s a trade secret.”

All start-ups, even small ones, should pay attention to intellectual property. Have your technical employees write up their inventions for submission using standard invention disclosure forms or keep them as trade secrets. And document those trade secrets!

“The documents should be labeled as trade secrets, and you need to restrict access to them,” Blackwell said. “Spend a few hours with your patent attorney figuring out what to disclose, what to patent, and what to make a trade secret.”

“Your IP professional can tell you which things to file provisional patents on and help figure out what not to disclose to third parties,” Kingsland said.

How do you keep track of your competitors’ patents? 

You never want someone to steal your ideas, so it’s important to keep an eye on your competitors. If they violate your patent, you can sue or file a cease and desist order prohibiting further production of your invention.

Kingsland said, “You need to be aware of your competitors so you can beat them to the punch. Have someone on your team check Google Patents for your competitors periodically.”

Search Google Patents for new applications in your technological class too. Investors will check both your patent portfolio and your competitors’, and they won’t want to invest if you’re infringing.

“Keep an eye on your freedom to operate,” Blackwell said. “If you sell billions of units of a product that infringes another company’s patent, the lawsuit could bankrupt your company.”

How do you choose a patent attorney? 

Ask other start-ups in your field for recommendations. Elateq chose a local patent attorney they found through their network. Rajić considered candidates’ trustworthiness, competency, affordability, and subject matter expertise.

“It was important to have someone who had worked with biotech companies before,” Rajić said. Check whether an attorney has prosecuted in their business category. Their technical expertise and prosecution experience may not overlap.

If you can, choose an attorney you like as a person!

“Folks often overlook personality fit,” said Blackwell. “You don’t have to be friends, but you should feel like you’re talking to an intelligent professional who treats you with respect.”

Patent attorneys are the liaison between your technical employees and the technical employees of the patent office. Finding someone to translate from technical language to patent language is essential. If you’re ever in doubt about protecting your intellectual property, a patent attorney is the person to ask.