In June 2016, when Hike decided to sharpen its focus on patents and start beefing up its patent portfolio, the legal team was tasked to lead the program. While most of us had spent a large part of our in-house careers working with technology companies, quite honestly, we had hardly any experience with patents. However, what we had on our side was a visionary founder, great belief in our own abilities and a few seasoned engineers in the leadership team who were keen to collaborate with us on building an inhouse patent program.
It was not much of a program to start with so we rolled up our sleeves and got down to learning as much as we could about patents and why it was important that we, as a Company, should focus on this aspect of intellectual property. Through this article, we want to share our learnings, experiences and some best practices around building a robust inhouse patent program.
Conventional wisdom suggests businesses that innovate should protect their work. This couldn’t have been truer for technology companies that continue to innovate almost on a daily basis. Indian tech companies are no exception given the rapid pace of internet growth in India. Indian tech companies stand at the cusp of a huge market potential and ability to innovate and create new product experiences for large user base. Patents could provide companies a way to exclude competing products and market security needed to develop long term business strategy.
Analogizing intellectual property to real property, broad and well drafted patent claims are like land grab actions. It is critical to identify areas where the company, its competitors and the market are headed and create strong fences around them. For instance, at Hike we realized early on that Machine Learning (ML) and Artificial Intelligence (AI) were two areas which (i) would be differentiators for tech companies, (ii) were core to our strategy in the long run, and as such it was critical to focus on protecting innovative products in these spheres. Our in-house teams of data scientists and analysts have really worked hard over the last few years to build ML and AI elements into our product core. Filing patents around their ideas not only gave our data scientists and analysts motivation to continue to build innovative products but also contributed immensely to the Company’s long-term business strategy.
Given the inter-dependencies in the tech space in this day and age, patents help businesses leverage competing technology or even cross license patented technology that belongs to a competing tech company. In some cases, patents allow you to generate additional revenue
By licensing your technology across multiple markets even if you cater to a single market. In a nutshell, with patents the Indian tech companies can play the offensive and/or defensive strategy (that often means dealing with a large global player) within the ecosystem to grow in a sustainable way.
So, if you’re an investor or founder of an Indian tech company that has commercial potential, developing a patent portfolio to protect your investment may well be worth the time and expense.
A few months into the patents program, during one of our ideation meetings, a product manager told us that he thought – “All patents should be burnt!”. This made us sit up and realize that we had actually missed out on an important first step in the program – educating our engineers and product managers about patents.
A key role, that in-house counsels play in any patent program, is to build awareness among employees. The focus of such programs is to emphasize the value of patents and patent process, including conducting workshops that help encourage flow of patentable ideas, protection of intellectual property and busting popular myths about patents! Protection of intellectual property should be ingrained into the very work culture of a Company. Awareness programs that reinforce the message at regular intervals foster a culture of innovation and novel ideas. Creating this culture of innovation and original thinking is key to success for a tech Company.
One of the challenges that in-house counsels face when a patent program is set up is discovery of ideas. To ensure a healthy pipeline of ideas, a robust yet simple process needs to be established, which makes it easy for employees (inventors) to report their ideas.
A key step to achieve this is an invention disclosure form. An invention disclosure form is document which inventors fill out so their invention can be properly evaluated. The form should be simple, user friendly and encourage inventors to complete it. A well-thought, clear and comprehensive invention disclosure form can facilitate the effective evaluation of an idea and eventually lead to better patent protection.
Next, create a transparent workflow management process that gives inventors visibility into the process and make it exciting for them to continue reporting ideas.
For an in-house patent program to be successful, inventor incentives are important. These incentives should be open to the entire company and not just the engineers/product managers. You never know where the next brilliant idea will come from – one of ours actually came from the finance team.
Lastly, don’t wait for employees to submit ideas to discover potential patents. Talk to with them about products they are working on and/or ideas that aren’t on their roadmap but given the pace of technology could become game changers in the future. Another great source of ideas is product demos, internal builds and company hackathons.
Getting a patent granted is not the simplest process – it’s time consuming and expensive. Hence, it is important to simplify the process and get a fix on your end to end patent strategy before one decides to file a patent application.
Before you draft a patent application, it’s always a good practice to review publications and other sources to ensure that your idea is not similar to an existing idea. This is called “prior art”. Prior art does not need to exist physically or be commercially available. It is enough that someone, somewhere globally, previously has described or shown or made something that contains the use of technology that is the same or very similar to your invention.
The next important step is to decide jurisdictions you want to seek patent protection in. Patents are only valid in the country where they are granted. For instance, you cannot enforce a patent granted in India against a business operating within the EU or in USA. Patent applicants who wish to protect their invention in more than one country can first file a patent application with Indian Patent Office, and within 12 months from the filing date of that first application,
They can file their international application under the Patent Cooperation Treaty.
Once you have decided to proceed with patenting an idea, you need to draft and file a patent application with a detailed description of the idea. These applications have to be be filed by a patent attorney (normally an outside counsel). In-house counsels should ensure that such patent attorneys are not only skilled in the art of drafting and prosecution but also understand the underlying logic, technology & architecture. Also, to help patent attorneys to draft better claims under a patent application, it is critical that an in-house counsel works closely with inventors to ensure that an idea fulfils three key threshold criteria, i.e., (i) the idea should be patentable; (ii) it should be novel, and (ii) it should not be obvious.
A great tool in the filing system is the “provisional patent”. If an idea is either work in progress or part of a product that will be launched soon, it makes good sense to file a provisional patent. This is an inexpensive process that allows you to get an application on file quickly. The application is valid for one year and allows you time to decide if you want to pursue a complete patent filing, while preserving your position as first to file. You can file a complete patent application anytime during this one year.
Once an application is filed, the review of application by the Patent Office normally takes a few years. However, the Patents (Amendment) Rules, 2016 now also allow for expedited examinations, in which a patent application will normally be decided within one year. These can be requested if India is named as the international search authority (ISA) or the international preliminary examination authority in the corresponding international application. Startups are also permitted to seek expedited examinations. An applicant that does not qualify as a startup can take advantage of the expedited examination by applying for a Patent Cooperation Treaty international application and choosing India as the ISA.
Lastly, an important thing to keep in mind is that you do not want your company to be in a position where it is fending off challenges or objections to its attempt to obtain a patent from employees claiming to be the owner. To avoid such a situation, you must build in an appropriate assignment clause into the employment agreement which employees sign off on at the time of joining the company. Such an assignment clause should survive termination of employment to allow unhindered ownership.
As an in-house counsel you are in a unique position to champion the patent program. Your ability to evangelize a culture of innovation coupled with robust processes to help build a strong patent pool could bring real value to your Company and investors in this era of cut throat competition in the tech Industry.
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