Patent strategies for R&D companies and the role of patent agencies

Due to globalisation and economic integration, competition in the technology market has intensified considerably. R&D companies must continually make technological innovations while at the same time safeguarding core technologies. An effective patenting strategy can secure protection for innovations while also keeping the company abreast of the latest developments on the market, thus enabling it to focus on productive areas in which to innovate.

Innovation and patenting strategy

In order to reinforce core competitiveness in the market, R&D should not only look at patent protection, but also establish and implement strategies throughout the innovation process (eg, from the conception of new inventions to the design of technical solutions and the production, marketing and protection of inventions).

Enterprises that develop and apply patenting strategies and properly use patent protection as a self-defence technique will be in an extremely strong position.

There are various definitions of ‘patenting strategy’. One of the simplest is “a general plan for seeking maximal economic benefits by patent protection measures and patent information provided by the patent system to obtain and maintain the advantages in market competition” (Discussion on Basic Problems of Enterprise Patenting Strategies, Xiaoqing Feng).

Types of patenting strategy

The different types of patenting strategy that can be adopted include offensive strategies, defensive strategies and comprehensive strategies which combine offensive and defensive measures.

Essential patent strategy

This is an offensive strategy designed to predict the direction of future technological development, based on existing core technology or research.

An essential patent strategy requires accurate knowledge of the current status of industrial technologies in order to determine the direction of development.

Every year, China publishes all major technical breakthroughs in various fields which are setting the trends for future development. The government provides support for these fields, from which enterprises can then benefit.

Peripheral patenting strategy

This is another offensive strategy, which can itself be divided into two types. The first establishes many minor patents with the same principles as the essential patents in the relevant field to produce a patent network. The second establishes a patent network around third-party essential patents in order to curb the effectiveness of essential patents belonging to competitors.

Patent standardisation strategy

Enterprises with patent technologies that have been written into the relevant standards can significantly increase their own market power and competitiveness.

Innovation and core technologies are bases for the standards that reference patents. When innovation technologies are patented and referenced by the standards, the patents and the standards become bound together. This has become the trend for the development of many of today’s technical standards.

When drafting, the patent attorney is constantly striving to broaden the scope of independent claims, make sufficient disclosure of technical solutions in the specification and consider protecting some key points as know-how

Patent map strategy

A patent map is a useful defensive strategy which can not only provide a comprehensive statistical analysis of the patents owned by competitors in order to clarify the company’s own position in the competitive environment, but also help the company to formulate and revise its R&D strategy while adjusting and deploying its patent portfolio.

When selecting development goals, the patent map can be used to ensure that future developments avoid infringing third-party patents.

Bypassing barrier patent strategy

The following defensive measures may be used generally:

bypassing barrier claims and developing non-conflicting technologies;
applying alternative technologies; and
employing patents beyond the scope of their regional protection.

Litigation coping strategy

Defensive strategies to deal with litigation include:

searching patent documentation in order to determine the plaintiff’s legal status;
analysing and comparing the patents of both parties and taking countermeasures;
invalidating the opposing party’s patent;
issuing a plea of legitimate rights; and
issuing a plea of prior art.

Implementing patent strategies

Applying patent documentation in R&D

Patents are the most extensive technical information source in the world, comprising between 90% and 95% of international science and technology information.

The following can be accurately discovered from patent documentation:

the state of the prior art;
the development of new technologies and potential application fields;
technology trends in the relevant industry;
the most competitive technical fields;
R&D trends of competitors; and
the potential lifetime, market and value of new products.

Formulating R&D plan

First, it is necessary to select the technical field for R&D. This can be determined comprehensively by searching patents and combining factors such as technical advantages and technical problems which have already been solved.

Formulating an R&D plan should be combined with actual situations and use technological advantages to ensure that the plan is implemented.

Unearthing potential innovations

Not all innovations can be patented. Even those that can be may need to be applied for from another perspective (eg, computer software). Therefore, innovations must be carefully examined in order to determine the best way to apply for a patent.

Determining protection schemes

There are two options for the protection of technological innovations: patents and know-how.

Not every innovation needs to adopt the same mode of protection. It is common practice to adopt different modes of protection for different innovations, especially for method inventions.

Where two parallel modes of protection are adopted, the requirement of ‘sufficient disclosure of technical solutions’ must be accurately understood. The problems to be solved by the solutions for which patent protection is sought cannot include problems solvable by know-how.

Corporations with patent agencies

Patent documentation is a technical and legal instrument which requires a combination of technical background and patent knowledge. Serious deficiencies in the drafting of a patent may be discovered by a competitor and then used as grounds for invalidation.

Some corporations use patent agencies to draft high-quality applications. In addition, many enterprises are changing their focus from the quantity of patent applications to the quality of drafting.

Standardisation of patents

Standards have become the new means of market competition. Enterprises should ensure that patent technologies meet the applicable standards in order to gain additional economic benefits.

In some fields, patent standardisation and standard licensing have become the new rules of international competition. The strategy of expanding the market with technical advantages can be realised through standardisation policies.

Patent agencies and patenting strategies

Patent agencies are not only intermediaries which can be trusted to provide common agent services for enterprises, but also active participants which often establish strategic partnerships with enterprises. Patent agencies play an increasingly important role in innovation, as well as in the implementation of patenting strategies, as follows.

Participating in innovation through drafting

Technicians employed by enterprises usually provide only a basic inventive concept or outline of the technique. Patent attorneys thus need to develop the patentable subject matter through discussion with technicians and then apply their own professional and legal knowledge to formulate a claim with the desired scope of protection.

Adjusting R&D direction and strategy

A comprehensive statistical analysis of patent intelligence using patent maps can result in detailed and comprehensive technical information, which can then inform the enterprise about not only competitors’ patent portfolios, but also its own position in the competitive environment. The R&D process can then be assessed objectively and adjusted or refocused as necessary.

By analysing patent intelligence, enterprises can avoid repetitive research and detours, prevent independent innovations from falling within the scope of others’ patents and ensure that live applications are not involved in unnecessary disputes.

Earning allowance using remark and amendment techniques

During prosecution, it is always advantageous to apply good techniques in remark and claim amendment, in order to ensure that applications are allowed. In addition, any drafting deficiencies discovered through this procedure can be fed back in order to improve drafting strategy and patent deployment.

Regulating process management and legislative changes

The Patent Law and Implementing Regulations are generally amended every few years. Patent agencies usually keep a close eye on this process in order to stay abreast of any adjustments to the laws and the procedural requirements.

For example, pursuant to Rule 41(2) of the Implementing Regulations of February 1 2010, when applications for both a utility model patent and an invention patent for an identical invention-creation are filed on the same day, statements for the filings must now be made respectively (this was not necessary under the previous regulations). Pursuant to Chapter 3(6.2.2) of Part II of the Guidelines for Patent Examination, if the applicant has stated the fact respectively upon filing these two applications, it can then either amend the invention application or abandon the utility model patent in order to avoid double patenting.

However, if the applicant fails to realise that the regulations have changed, it may lose out on the opportunity to obtain an invention patent.

Re-examination and invalidation

During re-examination, patent attorneys help R&D companies to guard against rejection of the patent by preserving an appropriate and broad scope of protection in any amendments to the claims.

During the invalidation process, patent attorneys can determine the patent’s strength more accurately in order to help the patentee to argue for the validity of its right or – as the petitioner – to prove that the other party’s right is invalid, and amend the claims as stipulated. In view of the limitations on the ways in which claims can be altered during the invalidation process (only deletion or incorporation is permitted), more dependent claims in a progressive or parallel manner should be formulated when drafting application documents.

As mentioned, utility model patents are granted without searches or substantive examination. However, the stability of utility model patents is greater than might be expected due to the relatively lower requirement of inventive step. Thus, utility model patents are not as easy to invalidate as some might assume. Therefore, at the initial stage of implementing the patenting strategy, an application for a utility model may be filed for certain products with a short lifespan and quick technical renewal in order to enhance the volume and stability of the patent portfolio. In addition, applications for both utility model patents and invention patents may be filed on the same day in order to obtain more stable and comprehensive protection.

Infringement litigation

Patent infringement litigation is highly technical. In order to determine whether an infringing product falls within the claims of its patent, a patentee must conduct a detailed analysis using technical expertise and a clear explanation of the claims. Patent attorneys are often involved in this process and will use all their powers to convince the court that the product at issue does in fact infringe the client’s patent.

When competitors send a warning letter or initiate litigation, a patentee also needs to analyse whether its invention falls within the competitor’s claims and then decide whether to respond to the litigation and/or file a request for invalidation which might prompt the competitor to make explanations that limit the features or expressions in the claims. Such explanations may be used as evidence to prove non-infringement.

Further, where a patent involves a method for manufacturing a new product, the burden of proof in infringement litigation is reversed. Patent attorneys should draft method claims for such patents with this in mind.

Nevertheless, in view of the difficulties in providing evidence during litigation, it is not recommended that only method claims be drafted when a new filing is being prepared. Instead, product claims – for which it is easier to provide evidence – should be drafted, even for method claims.

Right from the start of the patent strategy process, patent agencies should not only consider that the application documents should satisfy the general requirements and avoid deficiencies which might later prove to be grounds for invalidation, but also consider special provisions and requirements in any subsequent invalidation procedures or litigation and the complexity of providing evidence in the event of infringement. Any experience gained in subsequent procedures should be applied in the drafting and implementation of patenting strategies. The strength and stability of patents, especially essential patents, can be greatly enhanced in this way, leaving the enterprise in a much stronger competitive position.

Conclusion

Given the intense competition in the international market, drafting and implementing an effective patenting strategy is now vital. Patent agencies can play a crucial role in implementing such strategies. Where enterprises develop a deep cooperation with a patent agency, this can prove a win-win situation for both sides.

Liu, Shen & Associates

PO Box 9055

Hanhai Plaza (1+1 Plaza), 10th Floor

10 Caihefang Road, Haidian District

Beijing, 100080

China

Tel +86 10 6268 0066/1616

Fax +86 10 6268 1818

Web www.liu-shen.com

Xiaozhang Lu

Partner

[email protected]

Xiaozhang Lu is a partner at Liu, Shen and Associates. She is also a patent attorney and a qualified attorney. Her special interests and expertise include patent prosecution, patent invalidation and client counselling with a focus on electrical engineering, telecommunications, computer science, and internet and e-commerce.

Ms Lu has a bachelor’s degree in electrical engineering from the Central China University of Science and Technology, and a master’s degree in electronics from Wuhan University. She is a member of the All China Patent Agents Association, the China Lawyers Association and the International Association for the Protection of Intellectual Property’s China group. Ms Lu is fluent in Chinese and English.