Patenting vs. Not Patenting PDF Print E-mail
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Wednesday, 31 March 2010 10:37

Many companies struggle with Intellectual Property and in particular patents. The typical conflict arises between

  • Technical staff who want to see their work used or business people who view patents as an expensive ineffective distraction and
  • Investors who want some comfort that the company they have / are about to invest in has some kind of locked in advantage or advisors to the business trying to help them create a defensible position.

The fundamental cause of this conflict is a mutual lack of understanding around patents and strategy. Get the mix right and a good strategy with the appropriate use of patents can capture and create a lot of value in a business. Get it wrong and the potential exists to waste a lot of money in fees or to leave the business exposed to a competitor who knows what it's doing.

The way one resolves this conflict is to create direct tangible links between strategy and the technology in question. This needs to be done on a case-by-case basis and really should involved a trained and accredited patent attorney.

To help people have a product conversation here are some thoughts to consider:

1) Patents should be viewed as a tool to protect your company's revenue streams.

  • If your revenue streams are more dependent upon your relationships, ability to execute, or brand then the answer to the following question should be no:

"If someone had the same or similar technology to us, could they still knock us out of the market?"

There's a lot of generic technology out there these days, which is why it's so inexpensive to take a lot of consumer based plays to market. In these cases patents are distraction from executing to get adoption up in what are usually "winner takes most" markets. The one catch here is that you want to be sure that your business couldn't be prevent from doing what its currently doing if someone filed a patent on the same idea.

2) Can your invention be reverse engineered?

If it's not possible to work out what's inside the black box around your invention when product or service is used publicly then you might want to consider keeping it a Trade Secret. Make sure that your employees only have access to it on a need to know basis, and are trained in not revealing information to others, and are under iron-clad non disclosure agreements, and that you keep an internal register of all your secrets.

3) Can people work around your invention?

If people can work around it relatively simply with only a minor loss of functionality / time / utility then is it really worth protecting?

4) Patents should also be viewed as options: you can be lean/frugal and defer costs if you know what you are doing.

Inventors who know what they are doing can self file provisional disclosures at very low costs (couple of $100). This locks in protection and gives the company time to try the idea out in the market to see if it can generate revenue. If ti does then the full costs of engaging an attorney to draft claims can then be incurred. If not the inventors can let the application lapse. Should this happen the idea is in the public domain and no one else can patent it and prevent you from using at a later date.

CAVEAT: to self file you need to know what you're doing and if you don't, you should probably fork out the $1,500 - $3,000 required to get an attorney to help you do a proper job.

5) Patents are weapons of business.

If your business operates in a litigious area where there are some other players throwing their weight around suing people, get a couple of patents in your back pocket: you don't want to show up to gun fight with a knife! Each patent you have adds about $1m to the cost of a big player coming after you.... provided you've got a well drafted patent AND either the money to protect yourself or a big customer who uses your product /service that would step in on your behalf. One of the reasons VC's like patents is that a big player will often by out the little guy rather than sue them: it distracts management less from the real business, removes a competitor, and brings smart people inside their own company.

6) Patents do cost real money, will you get a benefit from them?

Expect to pay anywhere from $30,000 - $120,000 to get a patent filed and granted depending on complexity, which attorney you use, and how many countries you want protection in. Given this is the case:

  • Will you generate at least a couple of $100,000 of revenue to justify the cost in both $ and staff attention?
  • Will having patent make it more likely that you can get serious funding (if you need it)?

7) You need to be big enough to be worth suing

When I was in Motorola there were lots of companies who infringed Motorola's patents. Motorola simply didn't bother to go after them since they weren't worth enough to get a big win out of. If your business is gong to be a lifestyle business and remain relatively small chances are you will be fine for at least a little while. Should garner publicity or grown and become big, then expect a knock on your door with at least a cease and desist demand and probably also an open hand asking for back royalties.

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written by max tn, August 05, 2010
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lui faire ces choses. Lorsque j'étais en prison dans l'Ohio, elle a écrit pour moi, ce que vous avez fait pour moi. Je suis très Déplacé, vous avez toujours voulu voir. Quand j'entends quelqu'un veut tabasser PUMA CAT vous, "il a dit, je l'ai dit je tuyau jeu démarre, donc Après cela, ils laissent vous. ”
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written by Jay Casin, August 14, 2011
I agree with getting a couple of patents in your back pocket: you don't want to show up to gun fight with a knife! More people loose out on their products because they never get patents.
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written by Papa Locksmith, September 12, 2011
I agree with this article, getting patents are for your own good.
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Last Updated on Wednesday, 31 March 2010 12:50