What does a quality patent look like?
We evaluate patents every day. We underwrite investments in intellectual property, either for financing patents before they are written or for providing loans against patents that already exist. After doing this for a long time, there are certain elements that we evaluate every time we pick up a new patent.
A good patent starts with the front page. A good patent has a meaningful title and abstract, but most importantly, a good first figure.
We see patents as sales tools. When I draft a patent, I envision sitting across the table from a potential licensee and sliding the patent across the table to them. I want them to (1) understand the invention very quickly and (2) realize that this is a quality asset. It just so happens that the other users of the patent need the same thing. The other users include the patent examiner, the client, the inventor’s boss, the startup company’s investors, and so forth.
One of the artifacts of the business of patent law is that the attorneys tend to write very convoluted, heavy prose laced with huge, incomprehensible words. Clients seem to accept this type of writing as a good thing, and I have heard many inventors state that they could not even figure out what their invention was from the patent application because of the thick, tortuous legalese. Another great article on the misaligned interests of patent attorneys and their clients is here: http://ipassetmaximizerblog.com/the-dirty-little-secret-of-patents-is-that-most-are-worthless-to-their-owners-here-is-why/
The real reason why attorneys write this type of patent application is to hide the ball. By making something sound so incredibly complicated, the attorney is really showing that they don’t understand the invention. Ben Franklin once said:
I have already made this paper too long, for which I must crave pardon, not having now time to make it shorter.
The same is true of the patent attorney. It takes hard work to distill an invention down to its essence and capture that essence is words. The lazy patent attorneys skip the hard work and just write super-complex, indecipherable text.
My preference is that the title at least hints as the point of novelty, and the abstract should emphasize and explain the point of novelty.
All patents have a point of novelty. The point of novelty is the key element that makes it different. Don’t be afraid of the invention – get it out there in front. Don’t hide the ball. If you have to hide the ball, maybe the invention was not very good.
My patent drafting has evolved over the years. I was taught the “hide the ball” method because it makes great business sense. The business model is to write an incomprehensible pile of words that the examiner cannot figure out, and get paid on the back-and-forth with the examiner. Most of the profit that a patent attorney makes is not from drafting the initial application, it is from the haggling that goes on with the examiner. If the attorney can write a patent application that is impossible to decipher, he can get paid thousands of dollars to do the dance with the examiner.
I never really liked that business model, but I had the chance to really revamp the model when I was the co-founder of a startup company. I rethought the way I drafted applications, and I began to write a straightforward, clear, clean explanation of the invention. I put this explanation in 3-5 paragraphs at the beginning of the Detailed Specification. I wanted the patents to be well-examined because we needed those assets to bring us value. I wanted the examiner to understand the invention because I wanted them to do a good search and allow or dis-allow the case as appropriate.
I actually had a patent examiner call me on his own initiative and thank me for writing the application that way. The examiner knew he did the appropriate search and was confident that the case was allowable. (Of course, the examiner wanted an Examiner’s amendment when he called…)
The Importance of References
The number and type of references are a good indicator of the quality of a patents. In general, we like to see a larger than average number of references, and we want to see them as supplied by the applicant. We also want to see non-patent literature cited in the patent.
One of the ways to protect a patent from being challenged is to make sure that the examiner has looked at every possible piece of prior art. If the examiner has looked at the prior art and still allowed the claims, it is much harder for someone to challenge the patent after it is granted.
Of course, the number of references can be gamed and is not terribly reliable. However, if you find a patent that is cited by many other patents, that original patent is probably some kind of keystone or groundbreaking patent.
A note about non-patent literature. One of the most under-appreciated but valuable types of references are non-patent references. This may be websites, blog posts, master’s and PhD theses, textbooks, scientific papers, or other types of references. If you bothered to search these types of references, your patent is probably pretty solid. If you have not, there are lots of ways to possibly invalidate your patent.
The Importance of Prosecution
Patent prosecution is the back-and-forth between the patent attorney and the examiner. Not only is this one of the big money makers for patent attorneys, it is where a lot of the value of a patent can be gained – and lost.
There are two schools of thought about prosecution. On one hand, every word that the patent attorney says during prosecution can possibly be twisted around to hurt the patent. On the other hand, the amount of effort that the applicant put into prosecution is a measure of how much the patent was worth to the applicant.
We really don’t want patents that were allowed on the first action. I have always worried that the examiner didn’t do a good job if it was allowed so quickly, and I would like to have the examiner go on record with as much as possible.
I think there is a happy medium, just like Goldilocks.
We want enough prosecution to be assured that the examiner did a good job so that we can be confident that the patent got a solid examination. However, we don’t want to see endless prosecution because that looks like a minefield that will ultimately hurt the patent.
One thing we look at in prosecution is the applicant’s arguments. It is pretty easy to tell when the patent attorney just kicks the can down the road with the examiner, or when the applicant is making very strong and thoughtful arguments. Most patent attorneys work from templates of trusted and tried arguments (except attorneys who work by the hour), and the quality attorneys will have lots and lots of good text from which to work.
Some patents have “Terminal Disclaimers,” which can be deadly.
When We Finance Patents, We Typically Want To Invest in the Second Patent, Not The First.
At the beginning stages of a company, there is usually the Big Idea. Over time, this Big Idea will morph and change as the technology gets worked out, but mostly in response to the market input. Customers will react to different features, the marketing will test different messages to different types of customers, and eventually the product will start selling.
At the beginning of the company, the Big Idea is usually half-baked. It will continue baking as the technology risks and market risks are eliminated through trial and error. As the company matures, the product will mature as well.
As the maturity happens, the company will begin to explore areas that truly have not been explored before. They begin to solve problems that competitors will have to solve. For example, the marketing messages that actually get the customer to buy will be very hard fought and valuable. The product will also morph so that certain features will be much more valuable than other ones. At the beginning, we have no data to tell us which features will be important and which will not. The data only comes after the investment in time, money, and effort to bring a product to market.
After an investment in the market research and hearing the voice of the customer, there will be inventions that capture that investment.
Inventions that address real, definable, and measured customer needs are much, much more valuable than patents that merely guess about those customer needs.
I am almost always willing to forego investing in the first patent, which is untested in the market. However, if there is a patent that captures what the market wants – that is the one I want to finance.