Many communications and electronics companies have talented employees who come up with radical inventions. Yet for a number of reasons, these organizations fail to protect and commercialize those designs and inventions. In addition, many companies don’t know how to value their intellectual property (IP).
IP is part of intellectual capital, which includes workforce skills, business processes, customer and business relationships, branding, reputation, and the know-how of employees. All of these factors are required in today’s world of commerce. On its own, IP can be a potential liability if it leads to inventorship disputes or expensive patent litigation. Ideas and inventions provide a company’s heartbeat, but the wider intellectual capital (see the figure) drives growth and sustainability.
For electronics companies, IP plays an important role in the standards arena. Many companies may not realize how vulnerable they may be. Prior to attending standards meetings or to publishing in journals or conference papers, organizations need to understand that they should take advice about when they should patent their inventions and how they should go about it.
Standards meetings comprise R&D personnel from various organizations. For example, telcos may contribute to the development of standards to ensure that their technology is incorporated into those standards. For each standard or proposed standard, there are numerous standards meetings—often as many as five or six per year. The 3GPP wireless standard requires hundreds of meetings per year.
At these meetings, R&D personnel present their recommendations as to how the standard should evolve. Everyone essentially votes or decides on each presentation. If the presenters are “lucky,” the organization will include some if not all of their recommendations into the standard. These recommendations will relate to an organization’s technology and hence to possible patentable inventions.
However, R&D personnel need to be aware of what disclosing their recommendations means to the portion of their company’s patent portfolio that is related to the standard. These meetings inadvertently can be very damaging to the portfolio and hence to their competitiveness.
Most telcos, chipmakers, and consumer electronics manufacturers have very large patent portfolios, which they typically use for cross-licensing purposes. By cross-licensing portions of their portfolios with each other, they can make the latest phones, chips, and electronics that consumers want without fear of infringement issues and expensive litigation from each other.
BUILDING A PATENT PORTFOLIO
Patent portfolios that are worth cross-licensing need patents and/or good pending patent applications. This may seem obvious. But to obtain a patent, an invention has to be, at the very least, new (it has not been made available to the public before the filing date of the patent application) and inventive (not obvious).
An invention is obvious if people skilled in the art (though an “unimaginative” expert in the field wouldn’t even exist), using their common general knowledge, would have found it obvious to modify or adapt the documents that are available to them prior to the filing date of the patent application into effect.
Simply by disclosing their contributions in standards meetings, R&D personnel are potentially making their companies’ technology available to the public. As a result, the technology no longer would be new, and it would become extremely difficult if not impossible to get a patent for it.
If a company wants to boost its portfolio, it should file a patent application before the R&D’s disclosure at the meeting. Although this sounds simple, it isn’t as easy as it seems. Companies need to address two points before they should proceed:
• Have the R&D personnel already sent a proposal of their contribution to the standards committee? If they have, and if the disclosure is not confidential (it may be considered as such depending on the circumstances), then this action could be classed as disclosing the technology to the public. If not, then it’s so far, so good.
• If the company is active in standards meetings, then it is essential for the company’s IP manager to know what the R&D department’s plans are, i.e., when the standards meetings are, who is going, when the draft proposals or recommendations are due, if the proposal is important to the business, and if the proposal should be patented.
Once the IP managers know the answers to these questions, they are in a better position to know if and when to file useful patent applications for building a good portfolio before R&D personnel disclose it. Most importantly, there needs to be a good line of communication between an IP manager and R&D, that is, with each individual researcher.
The large telcos have these kinds of policies in place. But all too often, people typically leave everything to the last minute. As a result, there may be a short time of perhaps one to two weeks or less to decide whether or not to draft a patent application and file it before the meeting date. This short time is critical.
Organizations will need a patent attorney who can quickly get up to speed with the technology (ideas and concepts), “interrogate” R&D personnel to determine if there is an invention, make sure the invention is not too specific (i.e., if it will need to be a little generalized), check what is being disclosed at the standards meeting, run a draft patent application by the personnel to make sure there have not been any further improvements that should be included, and then file the patent application. This all needs to be done for each meeting.
In the telecommunications and electronics industries, it is important to find a patent attorney with an excellent technical grounding in electronics engineering, computer science, and/or physics. This attorney also not only should be able to understand a complex technical brief quickly and draft a specification rapidly, but to engage the inventor and draw out alternative embodiments or examples of the invention and alternative ways of doing something to fully claim the invention as well.
These disclosure issues are also relevant to marketing departments, where accidental disclosures can occur. Advertising and sales staff may get enthusiastic about upcoming developments. At trade shows, for instance, they may disclose to their customers developments for which a patent application may not yet have been filed. Simply discussing new technology with others, or producing a brochure, can be considered a disclosure that can invalidate a patent or patent application.
Furthermore, standards meetings typically result in a draft standard that can become available to the public. Should a patent be granted, where the invention is based on a section of the standard, it is not uncommon for competitors to review previous standards drafts and formulate arguments to attack the patent by showing it is not new or it would have been obvious given the knowledge at the time the patent application was filed.
This means that IP managers and R&D departments or small and medium-size enterprises (SMEs) without patent departments should consider carefully each improvement. If it is too minor, then the patent might have been too weakened by the previous standards draft to be patentable.
The IP and R&D staffs need to be aware of what R&D may have disclosed in prior meetings, because the combination of previous standards drafts might merely point directly toward implementing the minor improvement, which can be used in a “good” inventive step attack against the patent. All IP managers must know what the overall corporate strategy is, what the product base will be, and where the company’s technology is headed.
Despite the market downturn, new opportunities to trade internationally are still being created at a rapid pace. However, companies need to ensure that, in taking advantage of these new opportunities, they do not leave themselves open to exploitation. Although it’s an essential part of maximizing the value of a company, the process of protecting intellectual assets across the globe can be complex, particularly so in the digital age. Expert advice should be sought to ensure full protection.
Surveys show that awareness of IP issues and the best way of harnessing them to the benefit of the company is still very low in the boardroom. In companies with good practices, the CEO and CFO take a strong lead to understand how their IP protects their products. They also strive to comprehend how its value can be built and optimized to increase company performance and shareholder value. And, they seek to grasp how changes in business direction need to be reflected in their IC portfolios.
Protecting intellectual assets is essential. It need not be difficult or even expensive, and it can pay dividends. Making IP a boardroom issue and ensuring its communication throughout the organization is a good starting point.