Principals Matt Colvin and Betsy Flanagan authored an article for IAM outlining five strategies for startups and other early-stage companies to create patent portfolios that can stand up to litigation.
Read the full article at IAM.
This article was originally published on IAM on October 12, 2022.
Startups and other early-stage companies often focus their IP efforts on patent prosecution and due diligence. While those considerations are central to any company's long-term success, focusing too narrowly when obtaining patents can cause problems down the road when a company finds itself needing to assert its assets. In IP portfolio planning and development, there's a difference between IP portfolios that do a good job of covering a company's products, compared to portfolios that are designed for success in litigation.
Below are the five top strategies to consider when designing an IP portfolio for litigation.
Portfolio size
Litigation-ready portfolios should be large. While portfolio size will vary by the size of the organisation and budgets, large portfolios deliver several benefits.
- Large portfolios allow companies to assert multiple patents against defendants, giving them a higher chance of success and increasing the cost and difficulty of the defence.
- The ability to cover multiple aspects of accused products creates multiple paths to victory.
- Large portfolios can minimise litigation risks. A common issue for many start-ups with small portfolios is that they often want to assert their "crown jewel" patents but are reluctant to do so because of the risk of invalidation. Large portfolios can make that risk easier to bear.
Robust specifications
Patent specifications should not be drafted so narrowly that they only cover the company's own products. Instead, litigation- ready specifications should be broad enough to cover the solutions the company's products offer while also disclosing other ways of solving the problem — such as alternatives that competitors could use.
Broad specifications allow patent applicants a large well from which to draft claims that cover multiple versions of their products. Finally, specifications should be drafted to help tell a story in litigation about the problems faced by the applicant and how the invention overcomes those problems.
Variable claim scope
An additional benefit of large patent portfolios is that they allow companies to vary the scope of their claims. While inexperienced companies often obtain only one or two patents that are drafted narrowly to cover their products, litigation- conscious companies go further.
Generally, the broadest claims are the most likely to be infringed, but also carry the highest invalidity risk. The narrowest claims, in comparison, are the hardest to infringe, but also the most likely to be valid. Litigation-focused patent portfolios have a mix of both types of claims, as they allow patent holders to put forth a variety of infringement theories in the hope that one will be successful.
Open prosecution
Perhaps the most important element of building litigation-ready portfolios is having patent applications in open prosecution. Pending applications significantly increase the risk to potential infringers because they allow the applicant to create a stream of new patents that potential infringers may face in the future. They also allow litigation teams and prosecution teams to target the accused products directly while avoiding prior art, and to consider any legal developments in doing so.
A common strategy is to create "silver bullet" claims that are narrowly crafted to read on the accused products but avoid the known prior art. With open applications, the harder defendants fight and the more prior art they bring against the current set of patents, the more patent owners can do to inoculate their future patents against the prior art or other litigation-inspired arguments.
Multiple jurisdictions
Maintaining an international patent portfolio creates global risk for would-be infringers. When litigation arises, a global portfolio allows for litigation in jurisdictions where there is a higher chance of obtaining an injunction than in the US. The threat of an injunction is a powerful tool to drive settlement negotiations.
Building a patent portfolio that only covers your products is a short-sighted approach. Thinking about these five strategies while managing your patent portfolio will build higher value assets and pay off if you find yourself in litigation.
