Patent Strategy

BlueIron IP – Financing Patents

BlueIron IP finances patents for companies where the cost of capital is high.

Your capital is very expensive as a startup, and needs to be used to develop prototypes, marketing, building inventory, fulfilling sales, and general expenses. When capital is expensive, it makes much more sense to rent rather than buy.

BlueIron IP gives you full control of your patent assets so you can keep competitors out of your marketplace, but the financing arrangement manages your expenses. Your patent expenses are fixed, smooth, and predictable, so that IP is a manageable budget item.

BlueIron’s financing arrangement is similar to a commercial lease-back arrangement, where you have a buy-back option that can be exercised at any time, yet BlueIron is providing the capital for obtaining and managing your patent portfolio.

The Net Present Value of BlueIron’s financing can be less than the up front cost of paying for a patent, especially when your cost of capital exceeds 10%.

A huge side benefit to using BlueIron: professional portfolio management that has a vested interest in the *business value* of your patents.

Check out BlueIron IP for more details or contact me at russ.krajec@blueironip.com.

Patents for Defending Your Company

Many entrepreneurs and business owners want patents that will defend their company against competitors, but few companies actually have a proactive plan for investing their patent assets wisely. BlueIron IP is one way for you to get the benefit of a professionally managed patent portfolio at an affordable cost.

To defend your company, you want patents that are (1) litigation worthy and (2) relate directly to your company’s products and services.

Litigation worthy patents are not the garden variety patents that you get from your local patent attorney. The primary goal of the litigation worthy patent is to get a good examination. This means presenting the invention clearly and succinctly so that the examiner grasps the invention and can do a good search. The second goal is to avoid all of the many pitfalls that can sink a patent in litigation, such as avoiding patent profanity, providing too little (or too narrow) support for variations, and many others.

Provisional Patent Applications are Wrong for Your Business

In almost all circumstances, an entrepreneur or startup company should NOT get a provisional patent application. The main purpose of the provisional application is to *delay* the patent process. A delay is very useful for circumstances, such as pharmaceuticals, where most of the value of the patent is at the end of the patent term. This is not the case for almost all startup companies.

First, having a patent application quickly will add value to the company. It makes business sense to get patents as fast as possible, since the company’s valuation will go up if you are raising money, and it gives the startup company at least some protection in the marketplace. I suggest using the Patent Prosecution Highway or Track One to expedite the patent to try to get a patent within 1-2 years, not the sometimes 5-7 years without expediting.

Second, a “thin” provisional application does far more damage than it helps. Many people file a 1-2 page provisional application, then think they will come back a year later and pay an attorney to write a “full” patent application. Entrepreneurs often think that they are “protected”, so they go out and freely discuss their inventions with customers, investors, and the general public during the one-year period.

This creates a situation where you have two filing dates: a first one for the provisional and a second filing date with the rest of the material.

Most Patents are a Waste of Money – Patents Need to be Curated

Most patents are a waste of money. Why is it that Apple and Samsung each have many thousands of patents, but when they start a patent war with each other over, they only assert a small handful of patents?

For a small business with limited resources, judiciously selecting ideas for patenting can make the difference between having a valuable portfolio and a worthless one. The key factor on the value of an idea is not the ‘coolness’ of the technology, but whether or not the industry is likely to use the technology at some point in the future. This vision is much, much wider than the typical entrepreneur struggling in the trenches to build a business.

Curating a patent portfolio requires looking past a product going into production, past the immediate, short term business goals of your business, and into the future of your industries as well as other industries.

One Example of When Taking a License Makes Sense

Licensing technology from other sources makes sense in several situations, even when the licensee does not practice the technology.

Remember that patents are merely business tools, and they are useful when they give your business an advantage over a competitor. Taking a license, even when your company may not currently infringe, may be appropriate in some cases.