
IP Unlocks Startup Valuation – Part I
Chris Baxter shares how to use IP to unlock startup valuation at the pre-traction stage in the first Part of the series Why Investors Always Ask About IP.
(Click on the image to zoom)
Stage 4 of the patent process is illustrated in Flowchart A above and involves either:
The filing deadlines for national phase patent applications and national patent applications are as follows:
Since the processes for 1. and 2. patent applications are largely the same and given that 1. is by far the more common path for clients of our firm, we will simply refer to “national phase” patent applications to refer to both on this page.
(Click on the image to zoom)
As the national phase entry filing deadlines in the above table are the final dates by which you can choose the geographical coverage for patent protection, it is crucial to ask the right questions in determining the breadth of patent coverage to pursue. Here are 10 filing strategies that Baxter IP has developed for you to consider when selecting countries for national phase entry. We highly recommend that you discuss them in detail with your patent attorney.
In order to assist you in deciding on what level of geographical coverage to pursue, please refer to the diagram below, which outlines in respect of common country selections:
If you wish to obtain patent protection in Europe, you can utilise a European regional patent application. While it is possible to file directly into individual countries in Europe, a European patent application can be filed designating up to 38 countries and is examined as a single application. This generally leads to significant cost reductions. Once your European patent application proceeds to grant, it is necessary to register the application in the individual countries in a process known as “validation”.
Your patent application will be published (i.e. disclosed to the public) at 18 months after its priority date. This means that your patent specification can be read online by anyone from that point in time.
Once a national phase patent has been granted, you have an enforceable right in the country in which you have obtained grant. However, it should be noted that grant is not a presumption that the patent is valid.
Ultimately, if you decide to enforce your national patent rights, the matter will usually be heard in court, and the alleged infringer of your patent will have the opportunity to lodge evidence against your patent to attempt to invalidate it. This is known as a “cross-claim for revocation”. You may or may not be successful in such a matter, and it is not uncommon for patents to be invalidated in court (e.g. by locating information that is not uncovered during examination). However, the vast majority of patents are never litigated; instead, a patent usually forms a strong and useful starting point for commercial negotiations and agreements, such as licensing.
The costs associated with obtaining and maintaining patents can be grouped into 4 main categories:
Renewal costs are usually incurred annually and are paid to the respective patent office to keep the application or patent alive. Patents usually have a term (lifespan) of 20 years from their Stage 3 International Patent Application filing date.