Patent tip: Stack your patents!

When an invention is selling or, better still, is selling profitable, then it may be wise to stack patents. Patent stacking is best explained by an example. This example is about kites for kite surfing.

Example: Kite patent stacking

Yearly estimated tube kites sold globally (blue line) and various patents on tube kites:
white the basic model tube kite, red the four lines improvement, green the bridle
improvement and yellow the bow kite.

This image shows the most relevant patents on tube kites, invented by Bruno and Dominique Legaignoux. The left hand side arrow indicates the filing date of patent applications for the specific technology, the right hand side arrow the expiry of the related patent protection. The first patent application on tube kites was filed in 1985, while the first product became commercially available only around 1995; a good ten years later. The Tube kite patents expired in 2006, while the market was still in its infancy.

In 1995 the Legaignoux brothers filed a patent application for a four line design, greatly improving maneuverability and safety of the kites. While the four lines kites were greatly improving some of the properties, the bridle type of leading edge connection further improved the maximum power and shape stability on the kites. The patent application for this technology was filed in 2000.

One of the most recent developments is the bow shape of the kite, which further improves aerodynamics of the kite.

So although the basic tube kite patent is now expired, and the four line patent is expiring soon, still protection on improvements stretches on till 2026.  So stacking patents and thus stretching protection is a very sensible thing to do, provided there exists a selling product or selling service underneath.

When to stack patents? 

So when is it sensible to stack patents this way?

Well if the diffusion of the invention is relative low, compared to the size of the market. Another quite illustrative example is the -relatively slow- development of the steam engine:

Here the patents of James Watt (first represented by white, the last represented by red arrows) covered less than 1 thousandth of the market. Because diffusion was so low, more patents could have been stacked. The estimated time till full saturation of the marked is about 235 years!

When not to stack patents? 

Well for those inventions that will not find any reasonable sales, patent stacking is a waste of time, money and resources. For inventions that diffuse so rapidly, that the market reaches saturation before expiry of the patent, stacking may be wise as well. In the following image the first iPhone design protection is indicated. The estimated time to reach full saturation of the market is about 12 years.

The iPhone design was granted a design patent in 2008 and will expire in 2022. In the S-curve fitted model, the expiry is when almost full saturation of the market will be reached. It is noted that this design is most relevant for the first generation iPhones, which was overtaken by newer designs:

So stacking is a very wise option, provided your technology has become commercially relevant.

I wish you happy inventing!

Hendrik de Lange
Dutch and European patent attorney
+31 (0) 6 481 74 686

Sources

About the patents on tube kites:
http://inflatablekite.com/siteinf/gb/InfPatent.html


Watts first steam engine patent (espacenet):
http://worldwide.espacenet.com/publicationDetails/originalDocument?CC=GB&NR=176900913A&KC=A&FT=D&ND=3&DB=EPODOC&locale=en_EP


Patent on a steam engine with an improved equalizer (espacenet):
http://worldwide.espacenet.com/publicationDetails/originalDocument?DB=EPODOC&II=2&ND=3&adjacent=true&locale=en_EP&FT=D&date=17820704&CC=GB&NR=178201321A&KC=A


Watts steam engine with rotary motion patent (espacenet):
http://worldwide.espacenet.com/publicationDetails/originalDocument?DB=EPODOC&II=1&ND=3&adjacent=true&locale=en_EP&FT=D&date=17840825&CC=GB&NR=178401432A&KC=A

Vision, Focus and IP, a powerful mix

Please allow me to share this cool story, it is about Arthur Oude Roelink, inventor and CEO of Jonge Poerink Conveyors B.V., located in Borne, the Netherlands. Jonge Poerink Conveyors B.V. is a mid sized production enterprise providing internal transport solutions to the food and packaging industry. Arthur is leading this company of about 50 people since 2010. He is a passionate motorcyclist and an engineer in heart and soul. As he describes himself, his preferred occupation is being somehow in the close surroundings of metal cuttings.

Trexx

Arthur has a passion for innovate thinking and I was privileged to contribute to one of his inventions, now known as Trexx. This is the first modular, build it yourself conveyor system, of which the structural framework, the track portion is made of rotation molded plastic. The Advantages of this system are numerous, such as easy construction and flexible alteration, superior cleaning properties, light weight construction and low environmental footprint, when compared to conventional conveying systems.

Six self explanatory steps to assemble a Trexx conveyor

The market

Slowly, more and more industries see the huge benefits of the Trexx system. As Arthur stated, the most difficult part of this development was to convince his own colleagues of the benefits of this system. Indeed, in a world where the construction material of choice is metal, developing a plastic alternative is unconventional, to say the least. Such an unconventional alternative meets some skepticism at first. This is also a reason why the adoption by the industry is slow at start. Though people see the benefits, risks are to be avoided, and the unknown, inevitably bears some risks.  Now that the first launching customers have incorporated some Trexx systems and are convinced, the number of clients will expand.

Rotary molded conveyor track portions of the Trexx system

Protection

My modest role in the development was to obtain a proper patent protection on this invention. Since the patent applications were filed at an early pre-prototype stage of development, I had quite some liberty in making the first rough sketches of the product. As there was virtually no related state of the art, we could obtain a very broad scope of protection on this revolutionary concept. It is very rewarding to see that the rough sketches later on appeared to be very close to the final product.

A figure in one of the patent applications of Jonge Poerink Conveyors B.V.

Will this invention be a success? Since Arthur and his amazing team have incorporated the powerful mix of vision, focus and IP, this invention is going to be very successful!



Hendrik de Lange
Dutch and European patent attorney
http://www.octrooifabriek.nl

Sources

The Trexx website: http://www.trexx.com/





 

Patent tip: Celebrate the unsuccessful inventions, they are great too!

This patent tip is about unsuccessful inventions. There a lot more unsuccessful inventions than successful ones! About 97% of all patents filed have proven to be commercially unsuccessful.

Much like our own genetic code, where quite the same is true. About 3% of our DNA comes to expression, the remaining 97% is non-coding or junk. The 97% junk, both in our genetic code and in innovation do however serve a purpose!

Without the Junk, the coding DNA, as well as the successful inventions would not have come to existence in the first place. It is much like a random game, where the same statistics apply: large numbers are required in order to arrive at the 3%.

In that light, please celebrate the failures as much as the successes! Here is one of my own failure inventions (it is easier to laugh about your own failures than those of someone else) as illustative example:

The ice bottle.

This great invention was a bottle of ice. When discarded, all that is thrown away is water, how cool is that! After some experimentation though, these bottles were proven very unstable and without any additional plastic lining, utterly useless.

However useless they were, I cannot describe the fun I had in figuring out how to make the prototypes and to test them.  I cannot describe the fun I had running -a paper only- state of the art search at the premises of the European Patent Office, in Rijswijk, back in 1996.  I cannot describe the fun I had figuring out how to write my first patent application, eating my way through quite complex procedures. I cannot describe the fun I had reading through a body of the state of the art, that time containing about 400 patent documents (the entire subclass A23G9/083).

Unsuccessful inventions are great too, inventions that do not work provide knowledge too. Celebrate them!

I wish you all: happy inventing!


Hendrik de Lange
Dutch and European patent attorney
http://www.octrooifabriek.nl

Patent tip: The main parts of a patent

Somehow, the number 3 returns in some essential aspects of patents. The first magic three is found in the three main and distinct parts contained in a patent. These parts are the cover sheet, the description and the claims.

Cover sheet

The cover sheet is indicating among other information, the persons in question, being the holder(s) of the right and the inventor(s) of the invention. The cover sheet thus indicates the economical player(s), who may benefit from the temporal monopoly.

Description

The description is indicating the specifications of the invention. This is a very detailed technical description, mostly accompanied by some figures.

The description allows someone in the specific field of technology, with a basic technical background to understand and reproduce the inventions, without undue effort or excessive experimentation.

Claims

The claims define the scope of protection of the patent. The claims form are by nature the pure judicial part of the patent, delimiting the protection form the rest of the state of the art.

The claims delimit the monopoly monopoly of the holder from his competitors. They define a fine invisible demarcation tape, where to go and where to "trespass" i.e. where to infringe the right in force.

Magic combination of three disciplines

Looking from a bit more distance to these three main parts, the represent three key disciplines an economical, a technical and a legal discipline. Such combination of disciplines is in fact the core of technical enterprises. This combination renders patents by nature complex, yet makes them dauntingly interesting.

I wish you happy inventing!

Hendrik de Lange
Dutch and European patent attorney
http://www.octrooifabriek.nl

Patent tip: Register your licenses!

It happens quite a lot, that a license is not registered in the relevant patent register. In that case, the licensee cannot start any action against an infringer and cannot claim any damages. For that reason:

When writing the license agreement, it is sensible to put in who (licensee or licensor) is responsible for the registration, and what happens if this has not been done. The party most benefitting from a proper registration is the licensee, so he/she is the most likely party to have the responsibility of arranging a proper registration.


Hendrik de Lange
Dutch and European patent attorney
+31 (0) 648 174 686

Patent tip: Top 10 reasons to patent

1. To protect a competitive advantage

By preventing others from entering a market or using a specific technology, a monopoly can be obtained with patents. Thus a patent portfolio becomes a business insurance against infringement, abuse or technological piracy.

2. To increase value of your business

Because of an obtained monopoly, higher margins can be generated, leading to higher profits and a higher company value. Patents can simply help in generating a higher return on investment.

3. To increase credibility of your business

By filing patent applications, there is some evidence of a technological progression in your company. This can help attract higher skilled staff and can convince potential clients that you are advanced and innovative. Thus you are likely offering them state of the art service, leading them to have a competitive advantage as well.

4. To enhance your power in negotiation

In mergers or takeovers, a patent portfolio represents additional value, especially when the underlying products or services are commercialized. A party with a portfolio is being taken more serious by competition. Competitors will rethink copying and forcing you out of the market, when there is a risk of legal procedures. A takeover or merger is a more likely option.

5. To raise licensing revenue

By licensing out technology, passive income can be generated, with relative low expenditure of resources, such as production facilities, distribution facilities and aftersales. Licensing partners may have far superior resources, which can be used to the advantage of both licensing partners. Licensing contracts can be made with non competitors in various different fields or even with competitors in the field of business the patent holder is active in.

6. To convince investors to invest

It is a great advantage if the technology at stake is protected, so that higher value can potentially be generated. Especially granted patents present a proof that the technology can be monopolized. For start ups, the existence of a patent portfolio can even be the essential feature for attracting investors and can be instrumental for the survival of the company.

7. To obtain a positive image of your business

Patents are still seen as a high value publication, and can be used as a marketing tool, both for innovative aspect as well as for a perceived level of quality. Your patents portfolio is a strong indication that your business delivers state of the art products or services.

8. To improve defense against infringement cases

In infringement cases, if the infringed portfolio can be more powerfully countered with an own portfolio. It makes a cross license deal more likely and greatly enhances the chances of avoiding any verdict to pay damages. "If you sue me with your patents, I will sue you with my patents" is a wonderful medicine against over aggressively litigating competition.

9. To promote innovation among employees

If there is a patent policy in place, employees are given some incentive to innovate and apply for patent protection. This can be -an often underestimated- aid in boosting personal scientific publication strength of employees and in honoring the inventors. Thus patents can provide a considerable intangible value for staff engagement.

10. To reduce profit taxes in innovation stimulating fiscal regimes

A number of tax incentives are provided for innovative industries. In most cases tax authorities accept granted patents as a valid proof of innovation.

11. To prevent others from protecting specific technologies

For a considerable number of companies, this is the main reason to pursue patent protection. However it actually does not lead to a very profitable, society contributing business. Numerous industries hoard patents, and sit on them doing nothing. In most countries however, "non usus clauses" prevent this practice from being very successful, except in the USA, where "non usus clauses" are absent in patent law. Thus, non-producing entities (NPE's) with huge patent portfolios, are very much a US-phenomena. NPE's mainly dominate the US-market and are rarely seen in e.g. the European countries.

Since this last reason reflects an objective to hinder someone else rather than to progress ones own business, it is placed where it belongs, outside the top 10.


I wish you all happy inventing and a great, healthy and successful 2016!


Hendrik de Lange
Dutch and European patent attorney.
http://www.octrooifabriek.nl

Patent tip: Tricky stuff in patent valuation

In patent valuation, the value of a patent much depends on paying customers, persons who are willing to give money in exchange of the products or the services that are covered by the patent in question.

However, when there is another very important factor at stake: that factor is the diffusion coefficient of innovation.

Diffusion coefficient of innovation 

The diffusion coefficient of innovation is an indicator of the speed at which an innovation "diffuses" through the market. The best to explain the diffusion coefficient of innovation is by the following two quite famous examples:

Steam engine

If you look at the face of James Watt, he appears to be a man with concerns or a troubled mind, well he has reason to be concerned! In the following image the diffusion of the steam engine in the USA is presented, where the arrows indicate the time span his patents were in force.

The patent protection covered a time span in which a marketshare of less than one thousandth of the total market had been reached. Watt had all reasons to be deeply concerned!

Television

How else did the following inventor preform! Zworykin was one of the inventors who essentially contributed to the development of the television. His contribution mainly was related to the development of the cathode ray tube.

Looking at the face of mr. Zworykin, he appears to be quite content, and yes he had all reasons to be a happy man! If we look again at the USA market, and the diffusion of the number of television sets, we see why Zworykin had all reasons to be a happy person:

In this figure the first arrow indicates the date of grant of the patent and the second arrow the date of expiry of the patent. During the time span the patent was in force, more than 60% of the entire market had been reached.

Patent value

When looking at the value of both patents, well it is needless to say, that Zworykin's patent was worth a lot more than Watt's patent.

In the above examples, the diffusion coefficient is not quantified. Yet, it is clear enough that ground breaking inventions, which both inventions are for sure,  still must be given an entirely different value from a business point of view.

Concluding: It is wise to integrate some educated guesses about the coefficient of diffusion of your innovation into the decision to pursue patent protection or not.

In future patent tips there will be more information about the quantification of the innovation diffusion coefficient. Stay tuned!


Hendrik de Lange
Dutch and European patent attorney
http://www.octrooifabriek.nl

Patent tip: Patenting requires a business strategy!

Should you file a patent for your invention? Well it depends.

As private inventor, filing a patent is actually only sensible if you want to start a business around your invention. This business can be a producing company, a service company, a patent licensing company or any combination of these three.

If starting a business is not your cup of tea, aiming for a patent is not a wise strategy.

Of course, there are more reasons for aiming for patent protection, in future patent tips there will be more information about the reasons to obtain a patent portfolio.


Hendrik de Lange
Dutch and European patent attorney
http://www.octrooifabriek.nl