Patents promote creativity and motivation
The protection of innovations and patents is an important issue for Stockach-based Sensovation AG in terms of the company’s proprietary developments. According to Paul Hing, Chief Technology Officer of the company, which develops and manufactures intelligent detection systems, Sensovation has already filed three patents in 2009 and further ideas for potential patents are currently being evaluated. But how does a medium-sized medical device company such as Sensovation deal with the commercial exploitation of ideas?
"If you develop as many new products and solutions as we do, you will of course want to protect your innovations". For a medium-sized company such as Sensovation, intellectual property protection systems such as patents are very important in order to secure its innovative positioning in the market over the long term. Patents not only offer sustainable competitive advantages (unique selling points), but also strengthen a company's competitiveness because they guarantee high investment security. "Among our employees, patents also promote creativity and motivation," explains Paul Hing adding that the information research carried out as part of a patent application process is another, very useful side effect, because it "provides us with important information about state-of-the-art technologies" and hence with information about novelties on the market.
The patent application is always a costly process for companies with own research and development departments. This also means that the length of time required for successfully filing a patent is a huge obstacle or even impossible for young companies when it comes to directly assessing the efficacy and profitability of a product. “It is our strategy and an integral part of our financial planning to set aside an annual budget for patent applications,” said Paul Hing. This budget depends for example on the number of employees working in development and the number of projects being carried out. In general, the patent claims, which define the boundaries of patent protection, are kept quite broad in order to be able to cover as many markets and market segments as possible.
Excellent ideas as drafts in the laboratory book
Before a patent is filed and the necessary preparations started, Sensovation needs to have a good idea. “Anybody in our company who has a good idea communicates this idea to one of our members of staff who is in charge of patent applications,” said Paul Hing. The idea will then be turned into as many as possible creative versions and simply documented, for example written down by hand in the laboratory book. The invention will then be evaluated, taking into account factors such as the degree of innovation, novelty, concordance with product development, cost and profitability objectives. If the decision is positive, the member of staff who has invented the idea, together with Paul Hing himself, will start to look for information. “Before starting to search databases and other sources for information, we will typically prepare a list of keywords and search terms that are indispensable when searching for information from external sources,” said Hing who also includes a general Internet search in order to find companies, products and publications that might be related to the company’s own potential patent.
“The information research leads to the identification of a patentable area, i.e. helps us to find out the potential gaps for a new patent or in order to identify dependencies and potential violations of existing patent rights,” emphasises Paul Hing. Sensovation tends to avoid fee-paying databases in the initial phase of patent research. The majority of public databases such as those run by USPTO, EPO and DPMA, which are continually being updated, are usually sufficient for the technical research done by the patent applicant. In a later phase, fee-paying databases will be used along with other resources (e.g., patent attorneys, INSTI patent research, etc.) in order to carry out “more comprehensive, quicker, more effective and more complete patent searches”. Once this has been done, Sensovation prepares a patent application: “The objective is to make our invention clearly stand out from the current state of technology,” said the CFO. Once the application is ready, it will be checked by a patent attorney, optimised and made “bulletproof” before the final application strategy is determined and the application filed by the attorney.
Patents – between time and effort and benefit
The patent application process is not only costly but also requires a lot of time. International patent applications filed by medium-sized life science companies such as Sensovation might occasionally take up to six years. However, Paul Hing points out that the quick granting of a patent is not really the goal. “Claims that remain as broad as possible and worldwide intellectual property protection play a far more important role. In addition, the time taken to file a patent can also be used to better adapt the patent claims to the actual situation,” said Hing. In its early establishment phase, it was important for Sensovation to protect a priority date (filing date) for important founding ideas as quickly as possible without using up the company’s scarce financial resources.
Sensovation chose the German Patent and Trademark Office (DPMA) for its first “local” application. The priority date was then later used when filing the patent application with the European Patent Office (EPO) or the Patent Cooperation Treaty (PCT), which also meant that the costs arose at a later stage than usual in the process. However, the company was able to cover quite a large geographic area. According to Paul Hing there have been cases where the quick granting of a patent became necessary in certain countries where the products had to be protected. He also pointed out that the translation of the required documents is usually not a problem, although it obviously adds to the costs involved.
The development of an idea into an initial patent application costs roughly 5,000 euros. A US patent costs about 12,000 euros, a German one 3,000 euros and an international patent (PCT) filed with the EPO costs about 9,500 euros. The transfer of the patent to a selected country costs around 2,000 euros per country. Annual fees, which rise constantly until the final, 20th year, of up to 1,000 euros will arise in the countries where the patent was granted. A patent registration always involves the disclosure of the know-how on which the patent is based. Sensovation also has certain intricate manufacturing processes, algorithms and software processes that have not been patented. “This means that our competitors need to use a kind of “reverse engineering”, i.e. need to figure out the manufacturing process from the final product in order to obtain the know-how required to manufacture the product,” said the CFO of Sensovation AG.
Broad formulation of claims
The Stockach-based medical device company has recently expanded its market to the area of environmental technology. Its scientific cameras, which were originally developed for biotechnological applications, are perfect for the inspection of solar cells and modules as they involve an electroluminescence measurement method. From the point of view of measurement technology, this image-processing task (detection and identification of tiny defects in a silicon wafer) is similar to the detection and identification of tiny, labelled DNA molecules. "Due to this overlap between the biotechnology and photovoltaics market, the patents are assigned to the area of intelligent detection, which means that it is wise to formulate the patent claims as broadly as possible," said Paul Hing.