Patents & Intellectual Property (IP)

Patenting is essentially a deal with the state where you disclose your invention fully to gain a temporary monopoly on its use, provided you pay the associated fees. This disclosure is mandatory and public, meaning 18 months after filing, your patent application becomes accessible to everyone. This has dual implications: societal progress through shared knowledge and the risk of others building upon or circumventing your ideas.

The Decision to Patent

Choosing to patent means committing to enforce it, which is a civil right and typically involves legal action. This can be costly, especially considering that in Europe, there is no unified patent system, requiring separate legal actions in each country where infringement occurs. In the US, you can choose the state in which to defend your patent, but legal costs can still reach around £1 million.

If you decide as a start-up to go for patents you have to know that the patent must be enforced. It is a civil law right to prevent others from using your invention, your idea. It also means that if you want to prevent others you have to sue them. Suing means that you need a budget to go to court. Going to court in the US is different from Europe. If you want to sue somebody in Europe you will have to sue that company, that infringer in different companies, in different countries in Europe.

At this moment there doesn't exist a European patent so that means if you apply for a European patent what you really get is a bundle of national patents that you will have to defend, enforce in different European countries according to the law of that country. In front of an Italian or a national court, whatever the country is they are infringing in with a solicitor in that country. That's a complicated and very costly procedure.

What Patents Protect

Patents are reserved for inventions, which means a technical solution or process. They are not cheap, with the lifetime cost of a patent in the EU reaching up to £150,000. Startups often file for a preliminary patent not with the intention of enforcement but as a means to attract investors.

Building a Patent Portfolio

A single patent is rarely sufficient for protection. A portfolio is often necessary, which adds complexity and cost. Yet, some startups use patents primarily as a tool to secure funding, rather than for long-term protection because you can postpone the process. A lot of start-ups patent, but they never follow up on their patent, they just apply for a preparatory patent in the UK, they try to have preparatory steps that don't cost a lot of money, but their objective is not to get protection. Their objective is to have a patent in order to raise capital to be sure that there is interest from investors, once the investors are in the company, they don't take care of the patent anymore. Because one patent will not protect you, you will have to build a patent portfolio for protection, so it's even more complicated than just applying for a single patent.

The Inventive Step and Novelty

Patents require an inventive step, which doesn't need to be groundbreaking; even minor advancements can be patented. However, novelty is a stringent requirement in Europe. Public disclosure before filing can jeopardize the patentability of an invention, unlike in the US, where there is a grace period allowing for some public discussion before filing.

Industrial Application

Patents must have a practical application. Pure scientific discoveries without a specified practical use are not patentable. If you can't do anything with your patent then it's not patentable. This criterion, while important, is typically not a high barrier to entry compared to the novelty requirement.

The Unpredictability of the Courtroom

Patent litigation is fraught with uncertainty. In the US, juries composed of laypeople decide on technical matters they may not fully comprehend. Emotions and perceptions can heavily influence decisions. These people will decide within one week upon a thousand technical claims that they probably don't understand. A lot of it will be perception. We know for instance in the US there is the Garmin versus TomTom case, Garmin being an online navigation company (US based), TomTom being a Dutch online navigation system company.

Garmin had patented everything about online navigation. They had a full portfolio. TomTom didn't patent anything. They didn't have any portfolio. TomTom entered the US and as you can imagine Garmin sued them for infringing all their patents and TomTom sued Garmin for having too many patents, which were not novel. In the end, TomTom won the US Lawsuit.