Handing the Keys to a Drunken Sailor
Letting the CTO manage patent policy is bad for business.
Some CEOs abdicate their IP policy to the CTO. The CTO spends lots of time with the patent attorney, so it just makes sense to let them deal with it. Right?
Sadly, I see the results of this over and over in poor quality IP focused on the wrong inventions.
This abdication of responsibility leaves lots of artifacts in the patent record. These include lots of terminal disclaimers, damaging method claims, pointless “non-transitory storage media” claims, very long claims, extraordinarily long specifications, provisional patent applications, and other artifacts.
A patent is not a technology asset, it is a business asset.
A patent is not a technology document, it is a business document. Yes, a patent happens to describe technology and contains a lot of technology language, but it is a business asset first.
From the CEO perspective, the purpose of IP protection is to create a moat for the business. Patents are merely one way of doing this, but patents are ALWAYS the LAST RESORT for the business manager.
However, one giant metric for the CTO is the sheer number of patents.
The number of patents is a tangible metric that shows the CTO ‘accomplished’ something. Not only that, the number of patents is a very intense psychological driver for any inventor.
But there is another, maybe even more powerful driver.
Your patent attorney is not your friend.
I learned the patent trade by serving an ‘apprenticeship’ under a long-term patent attorney. We were instructed – very explicitly – to congratulate the inventors at nearly every step of the patent process.
When we filed a patent application, we were required to shake their hands and say “congratulations.”
When the patent was issued, we would try to get the inventors to come to the office to pick up their patent. When the inventors arrived, we would gather around while the senior partner presented the official red-ribbon patent to the inventors with a big handshake. If possible, we would have cake and throw a small celebration.
Once the inventor left, he would laugh about how ridiculous the invention was. However, he always – always – put on a great show for the inventor.
The patent attorney is the ONLY one who “believes” in the invention.
Independent inventors know this well, but it is also true within a startup company as well as giant corporations. The patent attorney is the only one who “believes” in the invention.
The patent attorney’s job is to understand the invention well enough that they can recite it back to the inventor. This skill takes time to develop, but it also comes from just listening and paying attention.
Inventors often feel like the prophet in the wilderness, where nobody is listening and nobody understands the “value” of their “great idea.” Enter the patent attorney who does, indeed, listen and ‘gets’ the invention.
I have seen this moment many times, where the inventor’s eyes light up because finally someone ‘gets’ what they have been saying. The boss does not understand the invention, the coworkers do not understand it, their spouse does not understand it, but finally – finally – the patent attorney understands it.
This situation creates an undying allegiance between the inventor and their patent attorney. Truthfully, it is a one-way allegiance, with the inventor willing to follow the patent attorney through war, but the patent attorney can barely remember who the inventor is.
Tell-tale sign: the inventor brags about how good their patent attorney is.
Any time the inventor tells me their patent attorney’s name (or the firm name), I am instantly suspicious about an unbalanced relationship between their CTO/inventor and the patent attorney.
Many inventors develop these one-way fascination relationships with their patent attorneys, which gives the patent attorney free reign to run open-loop. The patent attorney walks on water, and therefore has open license to clean them out of their entire IP budget and more.
The CTO should be making business cases for every patent that must be approved by the CEO.
Ideally, patents should not be treated as rewards for the engineering team. They should be treated like any asset purchase: justify the investment, balance the risks verses rewards, show the value.
It is the CEO’s responsibility to make sure that the inventors (and the complicit patent attorneys) are not running open-loop. It is the CEO’s responsibility to invest capital into patents in a responsible manner, and that cannot happen by throwing the keys to a drunken sailor and expecting to get home at night.
Every patent should be justified this way:
- Explain why the best way to protect our IP (which is a trade secret) does not work in this situation. Patents are the last resort when trade secret protection is insufficient.
- Identify the value of the patent from the standpoint of the customer. Every patent should relate to the reason why the customer purchased our product. If the feature being patented is not the reason why we sold our product, the patent might be a waste of resources.
- Give the patent claims to another engineering team and have them attempt to design-around the patent. If there are easy/low-cost ways to accomplish the same goal, the patent has little value.
- Identify who would infringe the patent claims. The claims need to be directed at a competitor, not a customer.
- Identify every business scenario where the patent might be used, such as cross licensing, direct enforcement, standards-essential patent pools, etc.
- For each business scenario, identify specific patent claims that would be required to accomplish that business scenario.
If there is a business justification, proceed with the patent. If not, stop.