Why Every Startup Needs an IP Strategy

By Tina Dekker, Art Brion and Natalie Raffoul

If you’re a startup, protecting your intellectual property (IP) can seem daunting and less important in light of other, seemingly more pressing, matters involved in getting your new business off the ground.  However, creating an IP strategy is incredibly important as it provides both short and long term advantages for startups.  In the short term, a patent search for similar technologies or a trademark search for similar branding will inform you of potential competitors and possible issues with not just your startup’s branding but even with your startup’s core technology. In the long run, a clear IP strategy for your business may be the difference between surviving and becoming another statistic.  A clear IP strategy can inform your approach to protecting what is important  – do you, for example, patent your innovations or simply rely on keeping them as trade secrets?  Such an IP strategy can affect, and even determine, your startup’s direction and overall corporate game plan.

As an example of the importance of a clear IP strategy, the Canadian Intellectual Property Office (CIPO) highlights the story of Solace Power, a company based out of Newfoundland and Labrador, Canada.  Solace Power is thriving in the wireless power transfer market as a startup, in a field dominated by behemoths such as Qualcomm™, Apple™ and Google™, by ensuring that the company had a sound IP strategy. Solace Power achieved this by following a strategy that balanced costs with business needs and by taking advantage of patent related agreements between governments.  The company now has a strategic patent portfolio covering numerous markets across the globe. You can read more about the Solace story here.

Solace Power followed an  approach that we often recommend for our clients.  Time and again, we have been approached by startups with budgetary constraints.  To provide the most bang for their buck, we usually recommend filing a US provisional patent application and then following that up a year later with a Patent Cooperation Treaty (PCT) international patent application.  This combination of patent filings delays decision making and, more importantly, delays the costs associated with protecting your invention worldwide. At the same time, this strategy ensures that you remain patent pending internationally in countries/regions that are signatory to the PCT.

Assuming that your first filing was a US provisional application, the PCT route affords an extra 18 months in which to determine where you wish to protect your invention.  Formalizing filings in those jurisdictions (by way of National Phase Entry) do not have to be done until 18 months after your PCT filing (again, assuming that your first filing was a US provisional patent application).   This 18 month runway can be used to find strategic partners, licensees, and markets.  Business needs, such as where you find licensees and partners, may determine which jurisdictions you wish to enter National Phase.  In Solace Power’s case, the company found a partner in Singapore and, because of this, they entered National Phase in that jurisdiction, among others.

After National Phase Entry in multiple jurisdictions, other methods and tricks may also be used to accelerate the patent process in those jurisdictions.  As an example, one can, with some caveats, take advantage of the PPH (Patent Prosecution Highway) if one has a favourable examination result in one jurisdiction.  This favourable examination result (i.e., an allowance of a patent application or a grant of a patent) can be used to hasten prosecution in jurisdictions where the PCT application entered National Phase.  This can significantly reduce prosecution costs while obtaining a faster patent grant.  

As can be seen, there are strategies that can be used to protect one’s inventions internationally while balancing costs, timeliness, and business needs.  While Solace Power is one example of a startup that was able to formulate and leverage a smart and cost-effective IP strategy into a worldwide patent portfolio, they are not alone.   Your startup can join the growing number of companies that take advantage of well formulated IP strategies to advance business interests.  A consultation with our experienced, cost-effective IP counsel can start you on the road to success.