BUSINESS GUIDE DISTRIBUTED WITH


22ND APRIL 2024


Financial, Legal & Accounting 7


Five reasons why you need a patent strategy


If you’re a tech business without an effective patent strategy, you’re inviting your competitors into your hard-won space. Did you know you don’t automat-


ically own your innovation? Tat’s why you need a patent strategy to secure the investment made in your business. Patents will help you stop competitors from making a product or using a process covered by


the patent for a period, so


you can maximise the return on R&D investment. An effective patent strategy


supports and enhances your busi- ness strategy, emphasising value for money and a patent budget that is proportionate to your R&D expend- iture, investment and technology- derived revenue streams.


An effective defensive patent strategy can deliver tangible business benefits:


1. Your deterrent effect A published patent portfolio can deter third parties entering your market. A patent application is published


around 18 months after initial filing. So you benefit from up to 18 months of secrecy provided you maintain the confidentiality of your inven- tion, and subsequently the deterrent effect arising from publication.


2. Your IP currency Patents play a defensive role in a competitive space as leverage or ‘IP currency’ in negotiations. A common example is cross- licencing or stand-off negotiations


where competitors have their own patents. If both parties have their own patent assets, this can level the playing field. Patents can also be useful in negotiating commercial partnerships.


3. Your value uplift An effective patent


strategy can


increase the value of your technology at every stage in your company’s life cycle, from seed round to exit. Don’t forget Microsoft’s $8.5bn acquisi- tion of Skype — the valuation was likely influenced by the 50 patents acquired in the process. Patent assets play an increasingly


diverse role in fundraising. Studies show that the odds of obtaining funding increase significantly for startups with patents. And in debt financing, patent portfolios have played a role in securing billions in credit from institutional lenders.


4. Future-proofing your business A patent application must be filed before the invention enters the


public domain in any way. So a forward-thinking strategy is vital. A significant practical conse-


quence is that you must make a decision about whether to apply for patent protection before you know the full value of the invention. Confidential information and


‘trade secrets’ play a role in protecting ‘backend’ tech, but in practice it is hard to maintain these rights beyond an initial ‘first mover’ period and they do not protect you from independent derivation by third parties. In AI, regulatory changes (such as the EU AI Act) may also put pressure on companies to disclose details of their technology in the future. A robust patent strategy considers


the current state of your business and its projected future path.


5. Your badge of innovation Patents demonstrate credibility to the outside world and give you the freedom to publicise your techno- logical innovation. Tis can help in acquiring new business, in fund- raising and in recruitment and staff retention. A patent programme that recog-


“Did you know you don’t automatically own your innovation? Tat’s why you need a patent strategy to secure the investment made in your business”


nises and rewards technical innovation can help attract and retain talent, particularly in compet- itive employment markets. In some sectors (such as AI), researchers entering industry from academia increasingly prioritise freedom to publish academic papers or present at conferences. A patent filing strategy can assist this, supporting such activity without giving away your technology for free.


TOM WOODHOUSE


For more information please contact:


Tom Woodhouse, Patent Attorney, Page White Farrer Bedford House, John Street, London, WC1N 2BF


E: tom.woodhouse@pagewhite.com T: 020 7831 7929 pagewhite.com


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