ip & patent strategy for startups

© 2013 IPStrategy.ca

A Business Perspec9ve on IP Strategy

for Startups and Early Stage Companies

Peter Cowan, P.Eng, MBA. www.ipstrategy.ca

@noremacc


Agenda Focus: Strategy in the Context of a Startup

• Lessons Learned • Ac9ons for Success

• Exits & Growth Plans •  Investor Protec9on

•  IP Toolkit •  Innova9on Cycles • TALCs, MVPs and Pivots • Planning and Budgets • Filing Strategies • Quality vs. Quan9ty • SoRware Patents

• Business Posi9oning • Technology Mapping • Lean Startup Methodology

Business View

Opera9onal View

Ac9on Plans and Successes

Investor View

The HOW

The WHY


Why: The Business View

Business View


Why do (smart) startups need an IP Strategy?

Business Posi*oning •  Prepare for future

acquisi9on •  Prepare for future defense •  Prepare for hyper-‐growth •  Business Partners &

Investors •  You have to play the game

Poor Business Drivers •  Enforcement & Cross

license plans •  Compe9tor preven9on •  Thinking ‘You have to play

the game’

Risk & ROI, for both short and long term, before a startup implements

the Strategy of Patent Filings.


Why IP Strategy strengthens the Business Strategy

•  Map business to technology –  Validates whitespace tech analysis –  Compe99ve monitoring & posi9on

•  Lean Startup / Canvas interac9on –  Ins9gates a Technology Pivot –  Defines Unique Value Proposi9on & Unfair Advantage


Why: Investors Perspec9ves

Investors & Exits


Investors & Exits

Exits, Growth Plans & Investor Considera*ons •  “Just get something filed” •  Early stage technical acquisi9on vs. SME acquisi9on stage •  Technical Buyouts vs. market acquisi9ons •  Investor Perspec9ves change at:

Startup à Small à Medium à Large à Mul9na9onal En9ty

When talking with investors, Infringement & Protec9on are not the same conversa9on


How: The Opera9onal View

Opera9onal View


IP Strategy Toolkit

Analy*cs & Analysis •  Technology Landscaping •  State of the Art searches •  IP Landscape analysis •  Compe99ve IP pormolio

analysis •  Whitespace or Overlap

analysis

Internal Processes •  Harves9ng à Evalua9on à

Filing –  Idea Ranking & Priority –  Review Comminees –  IDF (Disclosure Forms) –  Business / Strategy Valida9on

•  HR, Culture & Climate

Analy*cs – Informa*on & Knowledge Process – Deliverables & Ac*ons


Inside the Innova9on Cycle

In Prac*ce: Where IP integrates into the work cycle

Evalua9on & Design MVP / Launch

Team (People)

Technology Customers

Product Ideas

Pain Points

Market Needs

Deployment

Idea Capture

Validate the Idea: Novelty and Freedom to Operate

Posi9on in the market: Technology & IP Landscapes

Filing: DraRing & Filing 9ming Timing of Ac9on

s

Harvest: Idea review & Rank

Evaluate: IDF, Validate & Rank


Filing Strategies

Filing Strategy Depends on Market: •  Offensive

–  Disrup9ve Technology –  Early Adopter & Market Leadership –  Founda9on IP

•  Defensive –  Pre-‐emp9ve destruc9on –  Design Freedom

•  Patent Trolls •  Mul9na9onals vs. SME’s •  The posi9on of Startups in the IP Value Herarchy

Visionary

Integrated

Profit Center

Cost Control

Defensive

For Further Reading:


TALCs, MVPs and Pivot pimalls

Patent Scope & Timing of Filings:

•  Early Market protec9on •  Main Street coverage •  Beachhead and Bowling Pins

•  MVP: Bar Dates for release •  MVP: MVP 2.0 coverage •  Pivots: Timing and scope of filings, provisional filings

Risk & ROI again: Most startups have mul9ple pivots, and IP needs to adjust each 9me.


Planning & Budgets

Basic Legal Budgets •  Novelty Assessment or PA

searches: $1-‐2k •  FTO: $2-‐5k •  Invalidity / Validity: $5-‐8k •  Provisional: $2-‐4k •  Filings: $7-‐15k

Basic Business Budgets •  Landscape: $5-‐10k •  Analy9cs: $5-‐20k+ •  IP Strategy: $10-‐20k •  Drivers:

–  Advisory Boards, Investors –  CTO/CEO, etc.

IP Strategy for generally the cost of filing one patent

Rules of Thumb: Timeline: 3-‐4 months lead 9me People: 10-‐40 hours Budget: Y1 @ $10+k Y2-‐4 @ 4k/yr + global expansion


Quan9ty vs. Quality

Relevant IP à Reducing the Patent Value Gap

Percent (%) of Patent Pormolio

Value of Paten

t Pormo

lio

5% 75% 100%

Leverage Protect Divest

Patent Strategy Focus

Patent Value

Gap

Single or Mined Product Ideas may fit here


Quality Predictors

Filing Predictors of Value: •  Provisional Filings •  Family Size •  Breadth across IPC classes •  Claim Counts

Quality Thinking:

Idea aligned with business goals and technology direc9on

Legally Enforceable and Licensable

Economic Value


SoRware Considera9ons

Do you really need IP @ the startup phase? •  Resources & cost alloca9on in the overall business •  Speed of product and market change •  Speed of Lean Startup itera9ons vs. patent costs •  Long game benefits •  Pure soRware vs. integrated with technology

Not filing IP is a viable strategy if alternate planning is done


How: Ac9on Plans & Successes

Ac9on Plans & Successes


Lessons Learned

•  Growth: Facebook’s $500M pormolio acquisi9on •  NDA’s: Techforward vs. BestBuy •  Posi*oning: Datum Telegraphic & PMC-‐Sierra •  Disrup*ve Technology: Honeywell vs. Nest •  Essen*als: i4i vs. MicrosoR •  Lost Opportunity: GoPro & sports cam industry


Ac9ons for Success

•  IP & Accountability: Board of Advisers •  CTO / IP: Planning Cycle •  Culture imprint •  Project Impacts: Development Process

•  Legal Points: Ownership, Publica9ons, IDFs, Log Books, NDA’s, Bar Dates, Filing Plans…

ip & patent strategy for startups

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