Why do Patents Matter?

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Patents are critically important to many kinds of businesses, particularly businesses that rely on technology and innovation for effective competition with others in their industry. The evolution of products in these types of industries tends to be so rapid and perpetual that it can be quite challenging just to keep up with the momentous progression, much less protect the ingenuity in a timely manner along the way. But the timely procurement of the protection a patent offers can provide businesses with five major benefits.

  1. First and foremost, patents enable limited monopolies for their owners. These monopolies often allow a company a quiet period of up to two decades or so to reap the exclusive benefits of resources invested in research and product development.

  2. A second benefit of patents is that patents protect the invention from unexpectedly leaving the business. Like a ball and chain tethered to the technology, the patent prevents ex-employees, customers, and competitors from taking the innovation and marketing their own competing products.

  3. Third, patents provide a tangible measure of research and product development output. Patents allow companies to keep score of how effectively their research efforts are producing innovative ideas and provide an excellent way of memorializing and organizing these inventions.

  4. 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. This is often referred to as the defensive use of patents. Since patent owners may completely exclude others from practicing their inventions, the mere payment of money to a ptent owner may not be sufficient to enable an 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 in a shark tank with a nosebleed.

  5. Finally, patents allow sophisticated entrepreneurs and businesses to exercise offensive control over their markets. With well-planned patent filings, a company may be able to control its own destiny and greatly impact the future of its competitors. This process, called “Strategic Patenting,” looks at a company’s product plans as well as the product roadmaps and patent portfolios of key competitors. For examining the company’s own product plans, the initial questions asked in this process may include:

  • 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? and

  • Where can we get missing technologies needed to extend the product plan?

Contact John Ferrell at if he can further assist you. 


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About the Author

John Ferrell is a founding partner of Carr & Ferrell LLP, one of Silicon Valley's foremost technology law firms, and specializes in patent and intellectual property law matters. He is the Chair of the firm's Intellectual Property Practice Group.