Editor’s Note: José Cortina is a member of the Research Triangle Park law firm of Daniels Daniels & Verdonik, P.A.

RESEARCH TRIANGLE PARK, N.C. – The typical early stage company often commences development of a product without much thought about the patent landscape surrounding its creation. This can result in peril on two fronts.

A first front is ignoring the possibility that what is being developed may embody one or more patentable inventions. While one may decide to ignore the possibility of patenting such inventions, in the absence of a patent, competitors are free to copy and market competing products without risk of being sued for infringement, damages and a possible injunction.

Even if the developer of the new product is of the opinion that the product being developed does not contain patentable inventions, it is still always prudent to conduct a patent search. Depending on how extensive a search is conducted, the results can aid in the decision of whether to pursue patent protection and/or focus on specific features of the product under development which may be patentable.

The search may uncover patents which show “broad” aspects of the new product. This result is not wholly bad, however, in that it then becomes possible to focus on specific details of the product, as opposed to “broad concepts,” to determine if any specific aspects yield an improvement, competitive advantage, etc., and are thus prime candidates for patenting. This is especially important in technology areas where many patents have issued, because in such a situation (which is known as a “crowded art”) even minute improvements may be considered patentable.

If a decision is made to pursue patent protection, the designation “patent pending” on products may have a “chilling effect” on potential competitors because of the uncertainty about whether a patent will issue and what scope of protection such a patent will provide. Thereafter, if a patent issues, it can be used to stop competition either through threats or through lawsuits seeking an injunction. Alternatively, the patent can be used in licensing activities to derive revenue from potential competitors.

Patents are assets and should be treated as such. Thus, assembling a comprehensive patent portfolio can be considered a strategic part of the operation of the business. Patents can be used to inhibit competition. They can also be used as bargaining chips in negotiations which result in “freedom of action” in business to the patent holder.

On a second front, if the patents of others are not searched and analyzed, it is possible that a product under development, when completed, could infringe patents owned by others. This requires a more comprehensive search in order to uncover such patents early, allowing appropriate analysis. If a conclusion is reached that the product under development will infringe a patent, an early decision can be made to attempt to design around the patent or to seek a license from the patent owner. Often if a patent owner is approached early, before a license becomes a necessity, more favorable terms can be obtained.

In contrast, if no search and analysis is conducted, a developer may find after a product is introduced that it infringes one or more patents. While licenses may be available, it is also possible a patent owner may wish to seek an injunction. In such case, if a patent owner is successful, a court order could issue barring the developer from selling the product and forcing a possible redesign, all of which could be fatal to the business.

Thus, in product development, ignore patents at your own risk.

A. José Cortina is a registered patent attorney with the law firm of Daniels, Daniels & Verdonik, P.A. He focuses his practice on the intellectual property needs of small to large technology companies, including providing patent, trademark, copyright, counseling, licensing, conflict resolution and transactional services. He is experienced in a broad range of technologies, including electronics, communications, computer hardware and software, biomedical, materials, and selected chemical and chemical engineering technologies.