Tips for Describing Your IP in Business Plans
By: PHILIP M. GOLDMAN
Spring 2002
Companies that are seeking investors, or are in the midst of other types of activities where they need to disclose confidential business information, know the art and science that goes into writing an effective business plan. In addition to describing the business itself and related financial information, these plans often include a summary of the company's intellectual property (IP) position and assets.
Although often relegated to somewhere in the middle of the plan, such IP can often be a focal point of attention. The information you disclose, and the manner in which you disclose it, can have a tremendous impact on the effectiveness of a business plan.
Realize that these tips apply to the "patent savvy" members of any audience you encounter. Whether they will have a similar impact on other, less patent-focused, investors cannot be predicted or ignored.
Very Impressive Items To Include
- Issued patents and/or federally registered trademarks. Reaching both of these stages can require a considerable investment of time and money. It implies that you have been at it for quite a while, and have attained some level of success and certainty. It also means that potential investors (or others) will typically have ready access to the actual issued patents or trademark registrations, as well as to copies of the related government files.
- Conveying the sense that potentially "blocking" intellectual property or ownership rights of others (including competitors or past employers) have been considered, identified and dealt with. There is a fine line between making it clear that you have identified and considered potential concerns along these lines, and the unnecessary (and potentially counterproductive) discussion of just what those concerns might be.
Somewhat Impressive
- Pending patent applications to protect your technology. Pending applications raise some of the risks described below (in that they provide no certainty that patents will actually be granted), as well as some of the benefits alluded to above (confirmation that IP protection is at least in the works and that "priority" dates have been established).
- Work with a reputable law firm and capable attorney. Skilled patent readers can typically sense (and may in turn place a value on) the style, temperament and competency of your patent counsel.
So-So
- Pending patent applications happen to be provisional, nonprovisional, or international. Most applications evolve through these stages; therefore explaining the current status typically only provides the reader with an unnecessary roadmap of your IP position. While applications that are further along this path may be more impressive, revealing that others are not may work against you in a variety of unexpected ways.
- Sheer number of applications. The number of pending applications, or issued patents, may be impressive, but can often be misleading. A single original application can easily be "cloned" by filing and re-filing it in the form of many "continuing" applications, each one of which may issue as a separate patent. Still, some investors might be more impressed by the fact that you have 10 issued patents (albeit to minor improvements, or of narrow scope) than they are that you have a single issued patent (with claims of broad and diverse scope, and covering a variety of categories).
- Applications for devices or methods. Most well drafted applications will set the stage for protecting the key device or method itself, as well as for all other conceivable categories of claims, including methods of using and making the device, key components, precursors, intermediates, and so on.
- Actual filing dates of your applications, or the status of various 'office actions.' This information tends to be both unnecessary and quickly outdated as the patent and trademark applications evolve through their normal stages.
- Trademark 'registrations' in any particular state. State registrations provide considerably less protection than is provided by the Federal government.
Downright Scary
- Conveying the sense that you have not yet considered potentially blocking rights of others, or that you have done a search and found nothing anywhere close to what you have. There is always something "close" in the patent literature. The fact that you have not found it and dealt with it, or haven't yet looked for it, is not likely to be reassuring.
- Applications that have not yet been filed (regardless of your intent to do so, or the number of 'inventions disclosures' you may have prepared). The patent and trademark system is built on establishing "filing dates," therefore convey instead that you have drawn your own lines in the sand by establishing filing dates, even if your inventions are preliminary in nature and your potential for protection uncertain.
- Foregoing IP protection because such things "couldn't possibly be patentable" or patents can't really be enforced against the big guys. While you may indeed be up against the world of intellectual property Goliaths, remember that when properly prepared and positioned, even David could win.