Creative ways to protect your IP without broad patents
Are firms who create their products and services on open source software just building their houses on the sand?
Several innovative business leaders who attended TheBusinessDesk.com’s round table in IP strategy found they were unable to apply patents or other traditional forms of legal protection to their product. That in turn made it harder to attract investment as they could not explain their processes in any detail.
Eleanor Merrett, a partner at event sponsors CMS who specialises in IP issues among early stage SMEs, said many challenges could be overcome with advance planning.
“It’s really important to have these conversations as early as you can, and then come up with a strategy that might involve placing landmines around your core business, because it might be that the crux of your business can’t be protected by registerable IP – because we can’t secure a patent for that particular type of software, or, because it’s based on open source or whatever the underlying challenge might be.
“But if you strategically place protection around that idea that makes it difficult for somebody to actually copy it, then that can be the best overall strategy. And it might be that you protect your brand, because you’re getting a lot of customer loyalty that way, or you might have registered for a particular crucial element of the tech and to navigate around that makes it much more difficult. And it’s more likely that somebody’s going to want to license it or buy you.”
Simon Langdale, engineering director at Harrogate-based Synthotech, which makes robots to maintain and clean gas pipes, endorsed that approach. Synthotech uses both open source and vendor-specific tech.
“We just try and find the bit that is specific for us,” he said. “We look for the elements of the offering that we can get patented or trademarked or we’re doing a lot of registered designs at the minute in the UK, because they’re very cheap.
“We try and pick out the bits where we’ve got that novelty. Maybe we can’t protect the overall offering, but we can make it much harder for somebody so it’s not commercially advantageous for them to try and work around it.”
Merrett added, “There’s a bit of a shift at the moment in terms of seeing IP, particularly registered IP, as just a sink for money. You’re investing in an asset because you can do various things with it, you can license it, you can sometimes get tax relief on it, you can mortgage it, you can get funding off the back of it. And there is a whole industry around that.
“So that shift is potentially making it slightly easier to navigate from a funding perspective, when there are people out there who are actively looking to fund startup business’s IP journey.”
For some businesses though, the IP is not so defensible. Harrogate’s Merlin Burrows locates lost treasures through studying satellite imagery.
Chief executive Bruce Blackburn said, “The challenges for us from an IP point of view is that we use open source software that nearly everybody has had a copy of in the whole the world, going back to when used to get a CD, when you want to go on the internet – remember that from AOL?
“What we do is we read, we reorder components of mix of software, methods, technique, and just from grunt work on what order to put our research algorithm together.”
Merlin Burrows keeps its methods a trade secret. “IP for us could be a real credential builder,” Blackburn said, demonstrating “integrity, provenance, that we’re authentic and reliable, trustworthy. But on the other hand, it would completely provide everyone with X-ray vision. And we can’t do that.”
Satellite start-up Ambasat aims to encourage STEM studies by offering people the chance to put their own micro-satellites in orbit. They crowdfunded their operations, and ship the satellites in kit form.
“The commercial aspect of our business is we provide a system where people can test technologies that they want in space, a fraction of the cost of what it would ordinarily be,” said operations manager Khurram Hussain.
“We are very much in the realms of figuring out how to what our IP protection is because this thing is actually open source – albeit It’s been adjusted to our needs but it’s still not enough to be patentable.
The trick with this is that we have a software dashboard element that is protected by copyright.
“But the rest of the system which were developing the onboard computer, the integration trees, they are the things that will be protected under IP. But we need to build it and then make sure that it falls within the criteria to ensure that it’s a universal bus that anyone can just integrate with.”
William Fish, founder of Manulytica, specialises in retrofitting IoT sensors to legacy machinery. While he has a patent pending on the core device, he is otherwise very open about methods.
“One of my principles is that I like to use open source where possible, and when we do something that is not that important we share.”
One of Fish’s challenges is avoiding infringing other companies’ IP. Despite extensive searches, he said, operating over standard networks involved the use of multiple external patents and determining fair and reasonable use was complex. “I deal with the physical hardware, I deal with networking, I deal with artificial intelligence, I deal with data storage and applications. Every trip wire that’s out there, it’s just wrapped around this, any direction we go.
“If we take off in the next five years, we’ll be worth £20, £50 million. And Samsung go, ‘Oh, they’re doing all right – that’s ours, that’s ours. that’s ours, pay me.’ And I have to pay. That’s what keeps me awake.”
Angie Cusworth, operations director of IT consultancy and data centre Hardy Fisher, said her worries were not just protecting Hardy Fisher’s IP, but their clients’ as well.
Rather than look to patents, her firm looked at trademarking, largely due to the cost of patenting. “We built it and worried about the IP after, which I know is probably the wrong way to do it. But the cost for people who are self-invested, who don’t have deep pockets, puts people off. But if you don’t have it, you’re not protected.
“I would like to say we did it first, but we didn’t.”
Merrett acknowledges some forms of IP were expensive but said a good IP strategy incorporated the expense. “It’s a really common challenge for startups: the balance between securing that IP and being able to pay to do it. And in terms of having a complete strategy and why it’s helpful to have one in the really early days is to try and build that into the funding lifecycle.”
Simon Glenn, co-founder of business networking service Meeow, said his firm was in a similar situation – their difficulty was finding anything that might be patentable. Their product, he said, was like Gutenburg’s printing press: components in a different order
“We knew that the trademark angle would be easy, low hanging fruit, which we’ve done” he said. “So easy it’s almost criminal. But we were lying awake at night wondering thinking the gorilla was coming.”
Fish compared Meeow’s situation to Skype – without a patentable aspect of their platform, they built a huge client base around their branding.
“I think the most defensible thing you guys have is a really big following. Your product works. I can use it. I don’t have to mess around with it. It just works.”
Firms without patentable IP, Merrett added, could get creative around protecting their brand and their products.