Reduce Your IP RisksBy
Innovators need to recognize that there are numerous IP risks that their new products and services may face. Sometimes a little attention to your supply chain, packaging, and business model can greatly reduce those risks. An excellent resource on this topic, from which I have drawn a couple of suggestions, is “IP risk assessments – a pragmatic approach
to avoiding problems” by Richard Baker in Intellectual Asset Management (November/December 2011), pp. 72-77.
One approach involves considering and segregating the risk that various aspects of your products and services expose you to. For example, if you are offering a product that includes wireless functionality, consider providing the wireless aspect as an optional add-on that can be purchased separately. If it’s part of the product, you could be sued for infringement of numerous wireless patents and risk paying a royalty of some percentage on the entire product. By moving the wireless features into a separate add-on, the risk becomes much lower, and if you are found to infringe, you’ll be paying a royalty on the sales of the add-on and probably not the sales of the primary device.
You can also reduce risk by exercising caution in how much you disclose (outside of confidentiality agreements) to the public on the details of your products and manufacturing methods. The less you disclose, the less likely someone with a patent looking to sue will spot you as a candidate.
Baker also advocates careful examination of your supply chain and consideration of the jurisdictions that might be involved if there is a suit. If you are shipping internationally, for example, you might want to avoid assembly and shipping from the US where you could be exposed to US lawsuits. Bakers observes that having operations elsewhere can greatly reduce risks. In England, for example, patent infringement suits are successful only about 6% of the time, and in Italy, IP lawsuits move at “glacial” speed through an inefficient court system that often takes longer than the life of the patent to be decided. The US is a great place to be a patent owner looking to sue an apparent infringer, compared to other nations, so take that into account.
Of course, a good patent clearance assessment and care to avoid infringing other patents should be part of your IP risk reduction strategy in the first place, but there is always uncertainty.
Reducing IP risks can help you have a higher chance of succeeding in the market place and overcoming innovation fatigue.