Protecting Robotics and Drone Innovations Before the First Fundraise

Founders of robotics and drone startups have a lot on their plate. Building a prototype, recruiting engineers, and preparing a pitch deck all compete for attention. Potential patent and other IP protection is often postponed, but this can have serious long term consequences.

By the time investors begin due diligence, the startup may have publicly demonstrated its technology, disclosed essential details to potential partners or contractors, or failed to obtain signed employment agreements (with assignments) from everyone who contributed to the invention.  Even worse, a competitor may have filed a patent application covering the same technology.

For a robotics or drone startup, intellectual property should therefore be addressed before, not after, the first serious fundraising effort. In fact, you should start a conversation with a patent attorney immediately, even if you are not ready to make any filings, so you can learn what issues you face, what deadlines may exist, and how to avoid common mistakes that are often catastrophic later in the life of the startup.

Public disclosure is one of the most common problems. Founders naturally want to demonstrate their technology at pitch competitions, trade shows, customer meetings, and industry conferences. They may post videos online, describe the system on a website, begin a crowdfunding campaign, or send detailed materials to possible manufacturers.  A disclosure prior to patent filing can harm and even destroy your future patent rights.

The United States does provide some leeway, it provides a one-year grace period for certain disclosures made by an inventor. Many foreign countries do not. In those countries, a public disclosure before filing a patent application may immediately prevent the company from obtaining a valid patent in that country.  Foreign rights can often be very important to the company valuation, so these rights should not be thrown away carelessly. 

Even in the United States, relying on the grace period can create many critical problems.  It can cause conflict (and potential legal actions) about what was disclosed, when it was disclosed, and whether another party filed first. The safer approach is to evaluate the invention and make any necessary filing before the disclosure occurs.

An NDA can help, but it does not solve every problem. Investors often refuse to sign an NDA before hearing a pitch, and a confidentiality agreement is only useful if it covers the right information and can be enforced against the recipient. A patent filing gives the company a different form of protection because it establishes a filing date and allows the company to describe its invention to others without depending entirely on confidentiality.

Ownership is another frequent problem. Robotics and drone systems are often developed by founders, employees, independent engineers, software contractors, industrial designers, university researchers, and outside manufacturers. If the agreements with those contributors do not properly assign intellectual property rights, the startup may not own all of the technology it plans to sell. Investors will look closely at this issue because uncertainty about ownership can interfere with financing, licensing, enforcement, and a later acquisition.

The company should identify every person who contributed to the inventive concepts and confirm that the relevant agreements are in place. This review should include invention assignments, confidentiality obligations, consulting agreements, employment agreements, and any university or former employer obligations that may affect ownership. These documents are much easier to obtain while relationships are positive than after the company becomes valuable or a contributor leaves.

A third problem is filing an inadequate provisional patent application. Some founders believe that any provisional application provides broad protection for a year. It does not. A provisional application protects only what it adequately describes. A short document that states the general idea but omits the system architecture, operating steps, technical alternatives, drawings, and implementation details may provide little support for the claims the company later needs.

A powerful utility patent application should explain how the invention works and describe reasonable variations that competitors might use. For a robotics or drone system, that may require a discussion of sensors, processors, communication links, control logic, machine learning models, mechanical components, payloads, safety systems, power systems, and the sequence in which the machine performs its task. The application should also explain what technical problem is being solved and why the proposed solution improves on existing systems.

Robotics companies sometimes assume that their invention cannot be patented because they are using commercially available components, a conclusion that is frequently wrong. An invention may be patentable even when it uses an existing drone, robot, camera, sensor, motor, and artificial intelligence platform. Patentability may arise from the way the components are arranged, the way information moves through the system, the way the software controls physical equipment, or the new task the system can perform.

For example, a company may create a new method for navigating a difficult environment, coordinating several machines, attaching and operating a specialized tool, responding to sensor data, conserving battery power, or safely completing a physical task. The individual components may be known, but the complete system and method may still be new and nonobvious. The patent application should focus on the features that create the company’s actual commercial advantage.

Artificial intelligence inventions require particular care. A broad statement that AI is used to make a decision may face eligibility problems under Section 101 and may also fail to distinguish the invention from prior systems. A stronger application explains the data received by the system, how that data is processed, how the resulting output controls the robot or drone, and what improvement occurs in the operation of the machine.

The improvement might involve more accurate movement, faster response, reduced processing requirements, safer navigation, better object recognition, lower power consumption, or successful operation in conditions that previously required human control. Connecting the artificial intelligence to a specific technical process and physical result can make the patent position considerably stronger.

Before fundraising, founders should also perform critical research, such as a patentability search and a freedom to operate search, and what the difference is between them. Patentability searches ask whether the company may be able to obtain a patent on its own invention. Freedom to operate asks whether selling the product could infringe someone else’s patent. A company may obtain a patent and still face an infringement claim from the owner of another patent. 

A startup does not need dozens of patent applications before speaking with investors. But a Founder does need a rational plan, and he must be aware of common pitfalls he or she may face. 

Karich & Associates helps robotics, drone, and physical AI founders identify protectable innovations, prepare for investor intellectual property diligence, and build patent portfolios before their first fundraise. To discuss a Robotics and Drone Pre-Fundraise IP Review, contact Karich & Associates at eric@karich.net (800-949-0255).