Why Do Patents Matter for Your Business?
Patents are critically important to many kinds of businesses, particularly businesses that rely on technology and innovation, for competing effectively. The evolution of products in these types of industries tends to be so rapid and persistent that it can be quite challenging just to keep up with that evolution, not to mention protecting the ingenuity in a timely manner. Nonetheless, the protections that a patent offers can bestow five major benefits upon businesses.
First and foremost, patents establish limited monopolies for their owners. These monopolies often allow a company a quiet period of up to two decades to reap the exclusive benefits of resources invested in research and product development.
Patents often enable product monopolies and allow inventors to control markets.
A second benefit of patents is that they protect inventions from unexpectedly leaving the company. Like a ball and chain tethered to the technology, the patent prevents ex-employees, customers and competitors from taking the innovation and marketing it in the form of their own competing products.
Third, patents are a tangible measure of research and product development output. Patents enable companies to keep track of how effectively their research efforts are producing innovative ideas and are an excellent way of memorializing and organizing these inventions.
Fourth, patents provide a business in a competitive industry with a defensive bargaining chip to exchange, in the event that the business finds itself the target of someone else’s patent. Since patent owners may completely exclude others from practicing their inventions, an infringer’s mere payment of money to a patent owner may not be sufficient to enable the infringer to stay in business. Often the threat of a patent counterclaim, and the resulting exchange of patent rights, is the only way that aggressive competitors can coexist. Without patents, operating a technology business in a crowded market is akin to swimming with a nosebleed in a shark tank.
Finally, patents allow sophisticated entrepreneurs and businesses to exercise control over their markets. With well-planned patent filings, a company may be able to control its destiny and greatly impact its competitors’ futures. This process, which I call “Strategic Patenting,” looks at a company’s product plans along with the key competitors’ product roadmaps and patent portfolios. For examining the company’s own product plans, this process may include the initial questions:
■ What are the key technologies needed to extend current products into the future?
■ How can we control these technologies and prevent others from hijacking our roadmap?
■ Where can we get missing technologies needed to extend the product plan?