Entrepreneurs often find themselves under pressure to file patent applications and with good reason. If your product succeeds, market leaders will want to add similar functionality to their own product lines. They will do a cold calculation: Does it make better economic sense to buy your product or your company, or to develop their own product version and push you out of the market?
If you have a strong patent portfolio, the cost of a potential lawsuit is added into the equation and increases your chances of being bought out at a good price, rather than pushed out. Even if your business does not succeed, patents often have a substantial resale value, which can be important to investors.
Nevertheless, patent protection is not always the best choice, particularly for computer-implemented inventions. Many of these inventions are eligible for patent protection, but many are not. You may have invented a new type of financial derivative, a method for risk management or an algorithm for extraction of insights from big data, which is clever, original and valuable. Unfortunately, it is probably not patentable.
The law in most countries denies patent protection to methods of doing business, including financial and business management tools, and methods of data processing. The line between which inventions are eligible for patents and which are not is often fuzzy, but it should be considered before embarking on a patent application.
The other point to remember is disclosure. A patent is a sort of bargain between the government and the inventors: The government says, “To encourage people to invest time and money in developing new technologies, we are willing to give inventors a 20-year monopoly on their inventions, but in exchange, they must describe their work in a patent application that is sufficiently detailed to enable other people to understand and reproduce their inventions.” This is known as the enablement requirement. Failure to satisfy it means that the inventors have not kept their part of the bargain, and the patent is invalid – essentially worthless.
Meeting the burden of your enablement
To meet the burden of enablement, your patent attorney will have to write a complete, detailed explanation of how to implement your invention, based on the information that you have supplied. In general, the patent application will become available to the public 18 months after it is first filed. Your competitors will wait eagerly for the chance to read it.
Is it worth paying the price of this disclosure? The answer is usually “Yes,” if the patent office grants you a patent and you are able to enforce it. Although your competitors will be able to read about the details of your invention, you will be able to prevent them from using the invention, if you can prove that they are infringing your patent.
THAT IS the big “if.” Suppose you have invented a new neural network architecture, which makes it possible to do certain types of computations twice as fast as standard architectures. You can get a patent on it, but will you be able to enforce it? If the neural network is buried deep down in the object code of your competitor’s product, it may be difficult or impossible to prove that the competitor has copied your architecture, rather than having developed some other architecture that gives similar results. A key question for you and your patent attorney to answer is whether you can write patent claims that will cover features that can be observed externally, without diving into the code, for example, specific features that manifest themselves in a user interface or API.
If not, patent protection may not be the best way to go. You may want to keep your architecture to yourself, as a trade secret. Unlike patents, trade secret protection does not require you to reveal anything. In fact, once a trade secret is disclosed to someone who is not subject to a confidentiality obligation, it is no longer a trade secret and cannot be protected as such.
To be qualified for trade secret protection, you must take systematic, documented measures to keep your inventions secret. Your attorney can help you put the appropriate measures in place. You will then be able to go to court to enforce your rights against any party who takes your trade secret without permission. Unlike a patent, however, trade secrets give you no protection against a competitor who independently develops an invention like yours, even if the competitor has done so by reverse-engineering your product.
Another tool that can be used to protect software-implemented inventions is copyright, but that will have to be the subject of another article.
To sum up: Patents are valuable, but before you try to patent an invention, talk to your patent attorney about whether the invention is eligible for patent protection and whether you will be able to detect infringement of your patent. Trade secret protection is an important alternative, and you should make sure you have the proper measures in place to protect your trade secrets.
The writer is a senior partner of Kligler & Associates Patent Attorneys. He holds a Ph.D. in electrical engineering, as well as a law degree, and is licensed as a patent attorney in the US and Israel patent offices. He has more than 25 years of experience in the patent field, specializing in Deep Tech – electronics, computers, optics, communications and medical devices.