Law, Manufacturing, and Technology

Region’s patent activity climbs

Filings, procurements up over past half-decade as West Michigan economy stabilizes and companies add projects and products.

July 28, 2017
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Graphic art by Kristen Van Oostenbrugge

It’s not cheap to procure a patent. It can cost thousands of dollars in application fees, attorney billings and maintenance costs to defend a patent once the federal government grants it.

But entrepreneurs and manufacturers in Michigan, particularly in West Michigan, aren’t letting the price tag deter them from going after the right to exclusively produce and/or license their innovations for profit.

According to the U.S. Patent and Trademark Office, the number of patents requested in Michigan in 2012 was 8,956, and the number in 2016 was 10,481. This compares to nationwide numbers of 565,566 filings in 2012 and 650,411 in 2016.

Of those requests filed, the USPTO granted 5,967 patents to Michigan applicants in 2015 and 6,511 in 2016.

The most recent USPTO data available for West Michigan shows that from 2011 to 2015, the number of patents granted in the Grand Rapids-Wyoming Metropolitan Statistical Area (MSA) went from 189 to 217, from 140 to 174 in the Holland-Grand Haven MSA, and from 16 to 15 in the Muskegon-Norton Shores MSA.

Aaron Wong, a patent attorney at Grand Rapids-based intellectual property law firm Price Heneveld, said he witnessed the upward trend of patent filings in his practice.

“With economy improvements, we are seeing clients taking on larger projects. Specific projects always generate a lot of buzz within organizations, and that leads to more filings.”

Wong primarily focuses on patent procurement and enforcement for the automotive, appliance, medical device and office furniture industries, as well as in various technological fields, such as horticultural industries, thermoplastic and injection molding procedures and products, and food science-related technologies, which generally are the industries in West Michigan with the most patent activity.

The number of patents filed in the past half-decade is not necessarily a function of how many new businesses have been established, though.

According to Robert Macomber, chief deputy county clerk for Kent County, there has been a consistent number of “doing business as,” or DBA, business registrations in the past five years.

In 2012, the county tracked 2,584 DBA registrations in Kent County, compared to 2,461 last year.

There was a “slight decline, but mostly steady over that time period,” Macomber said.

Wong said instead of the patent activity coming from an increasing number of businesses, companies are increasing the number of patents they file.

A common misperception, he said, is the idea of one product, one patent. Companies often file several patents for various parts of one object.

“For a chair, it will have numerous patents on the adjustable features, the rolling base, the fabric, the cushion materials. Things like that can be new and novel to the market, so all those different features call for a lot of different patents.

“If a company has a new design for a new product, that one product alone can generate a lot of buzz for the company and put patent filings up overall because of that single project.”

He said it is common for a region’s patent activity to continue under the radar during a recession and then bubble to the surface once the economy improves.

“When the economy goes down, you might not have as many new filings, but a patent firm can stay busy because companies are trying to protect their existing patents,” he said. “They also seek to monetize and license them to generate revenue.”

He said West Michigan is rich with forward-thinking executives, which might be why the region’s business climate continues to flourish.

“Upper management can really drive patent filing. If a company has a CEO who values innovation and sees what it can do for a company, that upper management can put a focus on patent budget and make sure what’s going on the marketplace is protected.

“It is an expensive line item to seek patents. People who have had experience with patent litigation know the cost of maintaining a patent portfolio and how expensive that is. But they also know the value of a well-managed portfolio and the value of seeking licensing.”

It can take two to three years for the USPTO to review and accept or reject a patent application. In the meantime, manufacturers tend to take their in-development products to trade shows, Wong said.

“If you’re going to show something at a trade show, you want to have patent-pending protection so people know you have protection — or at least it puts people on notice that protection is being sought.

“When people don’t know what patent you’re going for, people will stay away from any production of that product, until they see what you’re going for, and then they can start their design around that.”

Wong said patent filings and a healthy economy are often but not always correlated.

“Sometimes, poor economies inspire innovation,” he said. “People need to make a change. What they’re doing is not working. … Those industry-leading innovations can be born of necessity or because a company is putting a lot into research and development.”

A patent lasts for 20 years after the date of filing. Many of the patent requests Wong sees come from the technology and pharmaceutical industries — even though for the former, the technology will be long out of date by the time the patent expires.

For drug makers, an expired patent means the active ingredients or drug composition can become public domain, opening the door for generics.

“You don’t have to have a product in the marketplace to file a patent,” Wong said. “A drug manufacturer may have filed a patent well before they have a product on the market, so seven or eight years may be left on the patent when it comes to market.”

Just because an entrepreneur or manufacturer is granted a patent does not mean they will produce a product, Wong said.

“You could be sitting on the technology if you want to. More sophisticated clients will have a pretty good plan in place once we get the patent. They’ll be off and running to the market.

“On the other hand, small production companies may have no plan to bring the product to market, but they can sell or license it to another company that is interested in making the product.”

Wong said it’s difficult to measure a region’s entrepreneurial health solely based on patents issued because successful businesses sell their products often without getting them patented.

Being denied a patent “doesn’t mean you can’t go forward with your product; it just means you can’t exclude others,” he said.

“Especially with smaller clients where their budgets are tight, fighting it may not be an option, it may be time to do the best you can to be the first to bring it to market and get your name established.”

He said West Michigan entrepreneurs are a special breed.

“I have a lot of clients coming to me inventing in areas outside of their traditional discipline. For example, doctors coming to me with nonmedical inventions. The entrepreneurial spirit is certainly here in West Michigan.

“We have a lot of innovators tinkering and figuring things out and not afraid to pursue ideas that are different, new and not in their wheelhouse, per se, but can be a very practical solution to an everyday problem.”

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