Mar 12 2007 by Jason

Should Entrepreneurs Avoid Examining Patents? – The Sequel

The best thing about having a blog is writing about a topic and then watching the email comments and questions flow in. I especially love the comments that disagree with what I write, as I usually learn more than I expound.

My post yesterday regarding whether or not entrepreneurs should review patents in broadening their knowledge of their ecosystem definitely struck a chord. If you want to see the full comments, check out the original post. In summary, though, I got a lot comments similar to these:

Investors are not going to put money into your company if you face potential litigation, and you are unable to tell them if you infringe or not. This will definitely be covered in due diligence. Likewise, you would be doing your shareholders a disservice by not understanding and evaluating your risk.

The problem with this approach is that you look uninformed when VC’s ask you to explain the IP landscape when they are performing due diligence.

Further, you need to get comfortable that you have freedom to operate, and the only way to do this is to review other’s patents.

If you know and understand the patents in your field, you can frequently design around the narrow patents, making sure you don’t infringe.

As a biotech entrepreneur, intellectual property is a major part of my day-to-day work. You need to monitor patents (and journal articles) in your ecosystem. Many strategic decisions are based on if you believe you can get protection for a certain idea. The only way to know that is if you have done your research and know what else has been patented.

These are all good points. Let me make something clear: just because I advised not to become a patent searcher, does not mean that you don’t have to know what’s out there. You can know a ton about your IP situation by monitoring other companies in your ecosystem, trying out their products, talking to their customers, reading reports, etc. This is all very different than personally searching through the patent filings.

I wholeheartedly agree that one should be knowledgeable, but if you are going to do this, do it before you start the business, make sure it’s clean than go full speed ahead. If you are worried, then get patent counsel involved, have them (not you) review the patents and write you a non-infringement letter to give you comfort. By having counsel monitor, this work is privileged and can’t be used against you later. Again, what we are trying to protect against here is willful infringement, not trying to keep you completely blind.

As for bio-tech, I’ll admit it’s a different animal and one, frankly, that I’m not an expert on. If this is what is standard in your industry, this is news to me. In the software / tech world, most patent attorneys that I know don’t want their clients out there searching around.

Thanks to everyone who has participated in the conversation. I also got support to blog again (call it a rant) on what is wrong with the patent system in our country. Stay tuned…