By Rudolph P. Darken and Nelson T. Rivera
Agtech entrepreneurs have a lot in common with the growers they serve. Just as a grower plants, nurtures, and harvests products for their market, the agricultural technology (agtech) entrepreneur takes an idea, grows it into tangible goods and services, developing products for their market. All agtech startups are concerned with value of one form or another: the value of their products and services and ultimately, the value of their company. But there’s a lot more to consider that is often overlooked. A better understanding of the intangible assets your company has—that is, your intellectual property (IP)—can be a critical factor in building value for your organization.
Your company’s intangible assets are many. Your products may have unique features that you should protect either by patenting them, or by securing them as trade secrets. As you gain customers and grow your reputation, you’ll want to consider trademark protection for your company name, as well as for your products and services, to assure that customers can’t be confused by some other company with a similar name or with similarly named products and services. If any of your products are packaged in a particular way that is an important part of your brand, you can consider protecting them as trade dress and/or with design patents.
One of the many advantages of owning rights to IP is the ability it gives you to license or sell your rights as part of your business development strategy. For example, if your company has limited resources or needs to get to market faster, you might choose to license the development, manufacturing, or distribution of your protected IP—this further monetizes your IP and enhances the value of your company. But that only works if you legally own the IP! This strategy might help you get your products to market faster while sharing risk with your partners, and ultimately obtaining a competitive advantage over your competitors. There’s a lot to consider beyond just the value of your products and services in the marketplace!
An often-overlooked aspect of agtech is that almost all agtech startups are software-intensive, meaning that an important part of the value you create for your customers is in the software that you provide. Certainly, there are startups focused on sensors, fertilizers, energy, water, and other tangible elements, but commonly, a key concept behind agtech startups is a source (or sources) of data that flow into a software product that manipulates, correlates, or otherwise transforms the data into something new and useful that produces some unique output or effect.
This raises an interesting issue with regard to protecting your intellectual property and adding value to your company. Since the Alice v. CLS Bank decision by the Supreme Court in 2014, patenting software has been challenging, and the United States Patent and Trademark Office has continued to revise its guidance on how to patent software inventions. First, it is important to know that software is patentable. There are those who will say that because of Alice, you can’t patent software. That is incorrect. But software inventions tend to fall under an exception to the rule called an “abstract idea” that can make them unpatentable.
As an example, let’s consider a food security application that tracks source data from the specific location where a product is harvested through packaging, shipping, and final distribution. Your company has invented a new algorithm that can locate a container with increased speed and precision and can identify other containers that could be compromised. Now you want to patent your invention.
On the surface, this appears to be an abstract idea of data collection, data storage and data transmission. We would address this by showing that your invention is more than just the abstract idea—that you are claiming a specific implementation with meaningful limitations to the abstract idea. We would ask you how your invention collects the data, manipulates it, stores it, and transforms it, resulting in the end product. We would then write the specific implementation details into your claims, also showing that what you are doing is neither a well-understood, routine or conventional activity in the agriculture industry. Of course, there are no guarantees of success, but this is the general approach we take to get software-intensive patents issued for our clients.
When you are successful, you have a patent that can protect your idea from others who might try to copy it. That has value in and of itself, but when coupled to your other products, your business strategy, your customers and your workforce, it could make an enormous difference in the value of your company. And that’s what you work so hard for, isn’t it?
Rudolph P. Darken is an intellectual property attorney and is also a professor of Computer Science at the Naval Postgraduate School.
Nelson T. Rivera is an intellectual property attorney. JRG Attorneys at Law is a full-service law firm on the Central Coast with a team of attorneys specializing in intellectual property law.
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