COVID-19: Cost Management Strategies for Patent Applicants

COVID-19: Cost Management Strategies for Patent Applicants

A laptop showing business statistics and financial forecasts in graph format.

By Gillian Burrell, Articling Student, and Andrew Currier, Co-Founder

During the economic lull caused by the COVID-19 pandemic, many businesses are looking to reduce their operating budget. It may be tempting to cut the budget for new patent applications or even abandon existing patents, however this is a short-sighted solution. The typical life of a patent is 20 years, which far exceeds the worst forecasts for the current pandemic. In this article, we provide tips to improve your cost management strategies without harming the long-term value of your patent portfolio.

Seek Out Government Support

One way to protect your patent budget is to take advantage of government support packages. Canada’s federal government recently announced a number of funds to support innovators during the COVID-19 pandemic.

The NRC’s Innovation Assistance Program (IAP) will provide $250 million to assist Canadian SMEs pursuing technology-driven innovation who were ineligible for the Canada Emergency Wage Subsidy. The IAP helps employers to retain their staff by subsidizing wages. If you qualify for the IAP, apply online now! The deadline is April 29, 2020.

The Regional Relief and Recovery Fund (RRRF) is a $1 billion fund for businesses and organizations affected by COVID-19. The government has not yet released eligibility criteria, but they promise the fund will cover both operational expenses and projects for recovery. The fund is managed by the six regional development agencies.

In support of the national medical research strategy to fight COVID-19, the federal government announced a $1.1 billion package. The fund will support blood testing, clinical research on vaccines and cell therapy, and public health infrastructure.

Find Your Point of Difference

Another way to manage patent costs is to be selective in choosing technologies to patent. A misaligned patent strategy can lead to a bloated, low-value portfolio. Instead, focus on the technologies that:

  1. Are core to your business;
  2. Drive revenue; and
  3. Set you apart from your competitors.

Technologies that meet one or more of these criteria should be guarded carefully. By focusing patent protections here, you can create new barriers to entry for your competitors. These decisions should involve your marketing & sales team who truly understand your point of difference in the market. You can then charter your development team to identify innovations that map to the point of difference.

PCK can provide the necessary expertise to guide you through the decision-making process. Our professionals will meet with your team in a 1-2 hour invention mining session to tease out the patentable technologies that are central to your business.

Choose Trade Secrets Wherever Possible

If you can keep an invention secret, it’s best to avoid the patent process altogether. Certain technologies, like backend software that never sees the light of day, should be protected as a trade secret rather than a patent. Trade secret laws protect confidential information within a business and there are no government fees to qualify. Better yet, trade secret protection lasts as long as the technology remains confidential, while patent protection has a limited lifespan of 20 years.

Ask yourself:

  • Has been technology been revealed publicly?
  • Can my technology be reverse engineered?
  • Is my technology distributed to clients or consumers?

In order to protect an invention as a trade secret, you should adopt a number of measures such as non-disclosure or confidentiality agreements, confidentiality clauses in employment agreements, data encryption, password protection, and (if applicable) physically lock up the asset.

Consider Provisional Patents

A US provisional patent is a way to defer the full cost of a patent. Provisional patents act a placeholder, giving you a 1-year grace period to prepare a formal patent application. At a fraction of the price, a provisional patent application is a great option for businesses with limited cashflow during the COVID-19 pandemic. The patent office won’t examine a provisional patent application, so you can save costs by not hiring a patent agent (although it’s highly recommended). However, certain risks are associated with writing your own provisional patent application. Because the formal application will be limited to the scope of the provisional, it may be difficult to get your formal patent approved. Worse, you could end up with a worthless patent. For a cautionary tale, read how a US court invalidated a formal patent because it was founded on a contradictory provisional patent.

For SMEs and startups that don’t have a dedicated intellectual property (IP) team, consider educating your development team on the patent system. You may even wish to develop an in-house expert who can draft inexpensive provisional patent applications. For an introduction to IP and provisional patent applications, sign up for one of our seminars.

For more information on patent strategies or to obtain IP protection for your assets, please contact Gillian Burrell, Andrew Currier, or Wendy Low.

PCK IP is one of North America’s leading full-service intellectual property firms with offices in Canada and the United States. The firm represents large multinational companies, scaling mid-size companies, and funded innovative start-up entities. PCK IP professionals include seasoned patent and trademark agents, engineers, scientists, biochemists and IP lawyers having experience across a broad range of industries and technologies. Contact us today.

The contents of this article are provided for general information purposes only and do not constitute legal or other professional advice of any kind.