John McNelis at Fenwick & West

Autonomous transportation technology development is accelerating rapidly and advances in object identification, mapping, machine learning, sensing and communication will continue for years as startups and 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. Coming Up with Cool Technology But Not Thinking Through 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 cool 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: Identify gaps in the market where a real need exists and then develop solutions and technology to address the gaps. These gaps can be identified by talking with potential customers to identify their pain points.

2. Announcing Your IP Too Soon

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 U.S. and can also potentially compromise U.S. patent rights.

TIP: Develop a marketing plan and coordinate public disclosures with your attorney to determine the impact that the disclosure may have on your ability to protect your intellectual property. This coordination allows intellectual property rights to be secured prior to a public disclosure.

3. Assuming You Own an Idea

People frequently presume that coming up with an idea equates to owning it. This mistake, although unintended, can be very costly for a startup. If the idea was originated or worked on while working at a prior employer, the prior employer could potentially assert rights to the intellectual property. Such a claim could originate from seemingly harmless activities such as use of an employer's copier or network; it may also occur from using an employer's computer to access a personal email account.  During diligence for a potential investment, this can result in the investor walking away because of the risk that you don't own core technology.

TIP: Do not use your employer's resources when working on your new idea. It is best to work on such ideas off hours, at your home, and on your own resources, e.g., computer, phone, copier, etc. Also, if the new endeavor does not relate to the scope of your responsibilities at your current employer, such risks are further reduced. 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. Having a Very Limited IP Strategy

Startups wanting to protect their inventions may be drawn to protecting the interesting technology that took significant effort to develop. While wanting to protect the inventions that were difficult to develop is common, 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, it may be difficult to detect infringement, or the shelf life of the solution may be only a couple of years given the rapid pace of changes in the technology.

TIP: Startups should identify solutions that can effectively block competitors. This can be done by examining how competitors may try to solve the problems that you are addressing in the market and identify bottlenecks where, if you can obtain patent protection covering the few effective solutions, you can effectively block competitors from implementing those solutions.

5. Limiting Your Patent Flexibility

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 occurs 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: Startups should put themselves in their 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, startups should imagine different ways to approach and solve the problems that their 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.

John McNelis is the co-chair of Fenwick & West's Autonomous Transportation and Shared Mobility Practice and is the Chair of the California Technology Council's Autonomous Vehicles Group.