The easiest way to make your patent more valuable: do a patent search.
One of the first things everyone sees, including me as I start a patent valuation analysis, is the list of references on the front page of your patent.
There are two kinds of references on the front page: those with stars and those without. The stars indicate that the examiner cited the reference. The ones without stars show how much effort the applicant put into the patent.
Very few references means the patent is more likely to be overturned if it were challenged in court or back at the USPTO during Inter Partes Review.
The easiest way to make your patent more valuable: do a patent search and cite those references.
Investment Grade Patents are Well Searched
A patent’s importance is implied by how many patents cite it. The bedrock patents that describe a new idea for the first time will be cited by all the other patents that come after it.
It should be noted that forward or backward citations are based on what is in the specification, not the claims, of the patent. Just because a patent discusses something in detail in the specification, it does not mean that the topic was claimed.
The specification is the part of the patent that is given away to the public, and the claims are the part that the patent owner can enforce.
I recently ran into an inventor who filed a 300+ page provisional patent application that had been pending for a couple years. He gave me a listing of all the companies who had cited his patent application as prior art, and the listing was impressive. His patent application had been cited many, many times by an impressive list of competitors.
However, his patent claims were ridiculously narrow and focused on a relatively trivial part of the giant patent application. In other words, he created this giant roadblock to other people’s inventions, but he captured no real value that he could enforce. I could not give his patent any value as a roadblock to others.
As an aside, one of the most eye-opening parts of doing a patent search: seeing who owns patents related to a given technology.
I do lots of patent searches as part of due diligence on inventions. As I find related patents, I am also uncovering competitors who happen to be working in the same space. Sometimes, the search uncovers competitors we knew were in the space, sometimes new ones pop up we never heard of, and we are often surprised to see companies who we never considered to be competitors.
The interesting part of patents is that we get a glimpse into their research and development activities and see what they were thinking and how they were going about it. This insight can be very valuable competitive intelligence, and it can inform the product and marketing strategy of a startup.
Some commercial patent search tools can identify patents that have transferred ownership. An interesting search is always to see who is buying or selling patents in the same field as your technology.
Why Some Corporations Do Not Do Patent Searches.
Patent searches come with risks that some people try to avoid – especially large corporations. Weighing the risks, I believe that the benefit of patent searches far outweigh the downsides for startups. For other companies, not so much.
For companies in the US, doing patent searches come with risks. If you happen to stumble across a patent that would kill your invention at the patent office, and you fail to send that patent to the examiner, your patent can be invalid. This is because we have an obligation to send everything we know to the examiner. Other countries do not have this mechanism, so their strategies are completely different.
The other risk is that if you stumble across a patent that you happen to infringe, you are now liable for triple (“treble”) damages for “knowingly” infringing.
When I was an engineer at Hewlett Packard years ago, we got a nice lecture from our corporate patent attorney. He went on and on about how great the patent system was, and how wonderful his department was, and so forth. But he had a warning.
The HP patent attorney said, in very clear terms: “If you do a patent search, you will be fired. Period. Do not do patent searches. Ever.”
The reason was this: they could not expose the company to triple damages just because some rogue engineer decided to do a patent search. The risk was just too great.
For a Big Company like HP, the risk of intentional infringement was not worth the benefit of a patent search.
Most competent patent attorneys will outsource patent searches for their clients. It is not because the attorney is not good at searches or that they do not want to do them, it is because of liability. The attorney has the obligation to send anything relevant to the examiner, but an outside third party does not.
When an attorney outsources their searches, they ask an outside third party to search on a specific invention, and the searcher will return five or six references. The attorney – who has the obligation to send everything relevant to the patent office – only sees those handful of references.
The risk of doing their own search is that an attorney might do a keyword search that returns 1000 patents. The attorney might refine the search, try different keywords, or whatever.
What if the killer reference was part of that first 1000 patents? Can someone claim that the attorney should have found that reference and sent it to the patent office? Could the patent be invalidated and the attorney sued for malpractice just because they were briefly exposed to the killer reference but failed to send it in?
The answer is yes. Attorneys send patent searches outside just to avoid the malpractice liability.
For startup companies, patent searches make a lot of sense.
Patent searches show up as references on the front page of the patent, which inherently give the patent some value. But more importantly, patent searches help inform the decision to get a patent in the first place. We want to know the landscape as we build our patent asset, but we also get some interesting competitive intelligence.
In the quest for Investment Grade Patents, for every hour we spend writing the patent specification, we have spent five hours writing and searching the claims. Our patent searching is relentless, as we try to bust the claims with everything we have.
The purpose of this is that we can refine the claims, and that we can be assured that we will actually get a meaningful patent.
One risk we always face is that patents do not get published until 18 months after filing. A search that is done today always runs the risk that a patent was filed in the last 18 months that can kill our claims. There is not much we can do to mitigate this risk.