The Two-Path Trap: How Startups Quietly Destroy Their Own Patent Portfolios

By Babak Akhlaghi on September 14, 2026.  Most founders think patent risk comes from the outside. A competitor copies your technology. Someone files an IPR. Someone designs around your claims.

In my experience advising startups, the more dangerous threat is internal. It comes from decisions you make and from people who leave.

There are two paths into the same trap. One is a deliberate business decision. The other is normal human movement. Both end at an obviousness-type double patenting (OTDP) problem that a terminal disclaimer cannot fix, because common ownership is gone.

Here is how each path works, and the playbook for avoiding both.

First, the Ground Rule: One Patent Per Invention

US patent law gives you one patent per invention. The government grants you 20 years of exclusivity in exchange for disclosing your idea to the public. You do not get a second bite at the apple by filing an obvious variant of the same invention and extending your term.

That is the core of OTDP. The standard fix during prosecution is a terminal disclaimer, a filing that makes two related patents expire together and requires them to stay under common ownership.

Read that last part again. A terminal disclaimer is only possible when both patents are commonly owned. It prevents future ownership splits. It cannot repair a split that already happened.

That single condition creates both paths of the trap.

Path 1: The Deliberate Split

Your startup holds a core foundational patent plus a continuation, a CIP, or an improvement patent. A buyer wants the improvement. You sell it and keep the core. That sounds smart. You monetized an asset and kept your crown jewel.

Here is what actually happened. If the transferred application claims an obvious variant of your core patent, an examiner can apply it as an OTDP reference against the patent application you kept.

You cannot file a terminal disclaimer. You no longer own both assets, so you cannot make the required common ownership statement. That leaves you two options.

Option one: negotiate to buy the transferred patent back. Expensive, and the other side knows you need it.

Option two: amend the claims of your core patent application to distinguish over the improvement you sold. You give up the broadest scope you were entitled to on your own foundational invention.

Neither option is acceptable. This risk shows up in real corporate structures too. When a parent company assigns application-focused patents to one subsidiary while foundational patents stay with another, the terminal disclaimer fix disappears the same way.

The practical rule: never transfer a subset of your portfolio without a full OTDP analysis first. If the patents you keep and the patents you sell are obviously related, you may be building the trap yourself.

Path 2: The Invisible Exit

An inventor leaves your startup. They join another company. They file a patent application on an improvement to the technology they worked on for you.

That application is filed by someone else and owned by someone else. Under current USPTO reasoning, it can potentially be cited as an OTDP reference against your original patent because it shares a common inventor.

You had nothing to do with that filing. You cannot file a terminal disclaimer. You are stuck.

There is no perfect fix for this scenario. You cannot force an employee to stay with your company, any more than you can prevent them from inventing after they leave. However, you can minimize the risk.

Get a broad assignment from every inventor before they leave, and ideally before the application is even filed. The assignment should cover the invention described in the original application, as well as any continuations that may later be filed from it.

This matters more than most founders realize. In Stanford v. Roche, the Supreme Court confirmed that patent rights initially vest in the inventor. Your company does not automatically own an employee’s invention simply because it was created on the job. You own it when the inventor assigns it to the company, either through an assignment provision in an employment agreement or through a separately executed assignment. In practice, it is often better and more secure to obtain a separately executed assignment.

A broad assignment does not prevent former employees from innovating at their next company. It simply ensures that you own what was invented on your watch and that you can continue building around your core application by filing continuations, even after the original team is long gone.

The Common Thread

Both paths share one root cause. The startup optimized for the decision in front of them. The deal. The departure. Nobody asked what that decision does to the patents they kept.

Every portfolio decision has a tail. The deal closes in a quarter. The tail runs for the life of your patents. Think about the tail before you sign.

The Playbook: 5 Rules for Avoiding the Two-Path Trap

Rule 1: Get broad assignments before anyone files or departs

One assignment per inventor, covering the application and every continuation filed from it. Sign it early. Investors will ask for these documents first during diligence, and a missing signature can stall or collapse a round.

Rule 2: Never transfer a subset of your portfolio without an OTDP clearance analysis

Before you sell or assign any patent, ask whether it claims an obvious variant of anything you are keeping. If it does, restructure the deal or accept the consequences with open eyes.

Rule 3: Map staying versus going before any deal closes

List every patent and application. Mark which assets transfer and which remain. Run the OTDP question across that line. This takes days when done before closing and years of pain when discovered after.

Rule 4: Treat an OTDP rejection as urgent

An OTDP rejection during prosecution signals a structural issue in your portfolio. It tells you two of your assets are tied together. Resolve it while you still control both sides.

Rule 5: Treat terminal disclaimers as a lien on your portfolio

A terminal disclaimer permanently ties two patents together for enforceability. So, if you transfer one without the other, then you risk both of them becoming unenforceable.  Track every terminal disclaimer in your portfolio and disclose them in every deal conversation.

The Baurin Decision Made This Real

The USPTO Appeals Review Panel’s 2026 decision in Ex parte Baurin did not create these risks. It clarified that they exist and that examiners will enforce them.

The panel confirmed that OTDP rests on two independent rationales: preventing unjustified term extension and preventing harassment from separate owners of related patents. The second rationale can apply even when your patent expires first and no term extension is possible.

I think the panel got the outcome wrong, and the panel itself invited the Federal Circuit to clarify the law. Until that clarification comes, you should plan as if the anti-harassment rationale stands on its own. That means family structure, filing dates, assignments, and ownership all belong in your prosecution strategy from day one.

Find the Trap Before the Deal Closes

The question for every startup is simple. You will find out about this trap either before or after you sign. One of those moments is cheap. The other one is not.

If you are heading into a licensing deal, an acquisition conversation, or a key employee departure, bring in a patent attorney for startups before the papers move. A short OTDP and assignment review now protects the patents you plan to build your company on.