Avoiding the Top 5 Potholes for Autonomous Transportation Startups

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Autonomous transportation technology was widespread at the 2019 Consumer Electronics Show. Advances in object identification, mapping, machine learning, sensing and communication will continue for years as startups and original equipment manufacturers (OEMs) work to make autonomous transportation a reality.

Startup companies are well positioned to address some of the problems in the industry but should be careful to avoid the following potholes:

1. Developing cool technology before identifying the market

Some autonomous technology startups have strong technology that the founders want to develop. Startups can make the mistake of developing cool technology before figuring out how it can be used in the market. An example may be a robotics company that decides that it has a clever way of autonomously moving in any direction. The passion and development of this interesting technology may come before identifying the problem to be solved and the scope and feasibility of the market. This results in innovative technology that may not have a strong enough addressable market to warrant further investment.

TIP: Determine gaps in the market where a real need exists and then develop solutions and technology to address them. These gaps can be discovered by talking with potential customers and honing in on their pain points.

2. Publicly disclosing intellectual property prior to executing on a strategy

Innovative companies are understandably eager to publicly announce their ideas. However, without proper advanced planning, a public announcement may adversely affect the ability to secure intellectual property rights. For example, public disclosure of confidential information may result in a loss of trade secret rights. In addition, public disclosure of inventions may immediately result in a loss of patent rights outside the United States and can also potentially compromise U.S. patent rights.

TIP:  Develop a marketing plan and preview public disclosures with your attorney to determine the impact they may have on your ability to protect your intellectual property. Use these opportunities to map out the steps you will take to secure your intellectual property rights prior to public disclosure.

3. Contaminating intellectual property at origination

Founders frequently presume that coming up with an idea equates to owning it. This is a mistake and can be very costly for a startup. If the idea originated or was worked on while at a prior employer, the prior employer could potentially assert rights to the intellectual property. Such a claim could arise from seemingly harmless activities, such as using an employer’s copier or network and even using an employer’s computer to access a personal email account. During diligence for a potential investment or acquisition, this could result in the investor or acquirer walking away because of the risk that you do not own the core technology of your business.

TIP: Do not use your employer’s resources when working on your new idea. It is best to work on such ideas outside of your normal hours, at your home, and using your own equipment and services (computer, phone, copier, internet, etc.). If the new endeavor does not relate to the scope of your responsibilities at your current employer, these risks are further reduced, but are not necessarily eliminated. Check your employment agreements for intellectual property assignment provisions. If you think your idea may relate to the scope of your responsibilities at your current employer, you may need to stop working for the employer to minimize the chance of contaminating the intellectual property.

4. Focusing intellectual property strategy only on difficult technology solutions

Startups often feel obliged to protect the key differentiating technology that took significant effort to develop. While the instinct to protect inventions that were difficult to develop is often correct, there are many situations where the technologically difficult solutions are poor patent application candidates. For example, there may be many ways to solve the same problem, enabling others to work around your inventions. In other cases, it may be difficult or costly to detect infringement, or the shelf life of your solution may be only a couple of years given the rapid pace of changes in the technology.

TIP: Identify solutions that can effectively block your competitors, even if they were not particularly difficult to solve. This can be done by examining how competitors are trying to solve the problems that you are addressing in the market and identifying bottlenecks where, if you can obtain patent protection covering the few effective solutions, you can block competitors from implementing those solutions.

5. Having intellectual property that is only based on the current market implementation

A related problem is that startups focus the description in their patent applications only on their current implementation, which limits flexibility during patent prosecution that may occur years after filing. Technology and solutions change, and preparing a patent application that only covers the current solution—in particular where you are continuing to develop the technology—may lead to a patent application that is not relevant in a few years.

TIP: Put yourself in your competitor’s shoes and strategize about how the competitor can design around your patent after issuance. Then you can include those design-arounds in your patent application. For example, you should imagine different ways to approach and solve the problems that your startup’s inventions address and include descriptions of such alternate approaches in the patent application. The additional material provides support for alternate prosecution tactics several years after filing and may also describe the evolved product/service, which allows the patent claims to cover the evolved solution.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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