Successful companies recognize that a comprehensive intellectual property portfolio could represent their most valuable asset and the key to future growth. A core component of the intellectual property portfolio is patents. In essence a patent gives a monopoly to the inventor of the patent holder for a limited time. This system encourages people to create businesses and develop new technologies and methods. It does so by removing the prospect that someone else could steal their ideas and harvest the crops of their inventions.
Companies which develop patent strategies tend to have several goals in mind. These are:
Patents can assist the growth of a business and development of a specific technology in the industry. If the invention is novel, it is likely eligible for patent protection. Patent protection will give an exclusive commercial right over exploiting an invention for a specified period. There are three main types of patent searches that can be performed to determine novelty before lodging an application:
Those desiring a patent may want to consider a “patentability prior art search” for their invention or a wider landscape study. Knowing the patent landscape in the particular field of invention can be important for a number of reasons. It might be discovered that the invention reads on another patent and, as such, there might be a need to assess a potential infringement or to consider taking a licence from the existing patent holder. One might also discover whether there are prior art patents/applications that anticipate the invention or render the invention obvious. This step is very important in pre-empting any surprises that might arise during the examination of the patent application(s).
Once it has been determined that the invention is likely patentable, a draft patent application can then be prepared. Since the costs of drafting a patent application vary widely among patent agents and firms, a survey of available options prior to selecting a firm or a patent agent/attorney is always recommended. It is also highly advisable to select a patent agent/attorney with a technical background that relates to the field of invention.
In addition to their technical background, it is also highly advisable to select a patent attorney who understands the unique needs and situation of the entity (individual / start-up /company). A business-aware patent agent/attorney who understands the company can help craft an overall strategy that takes into account, not just the technology and the law, but also what is possible with the available resources and long-term goals of the company.
The second goal is to generate a source of revenue by selling or licensing the patents. If an entity developed a technology, which doesn't fit in their business strategy, they could sell it and get a return on the investment. Licensing a patent is a good strategy, when production capabilities are too low or financial situation is weak to invest more money into new production facilities. Having other companies in the same market using the patent and paying royalties for the technology can conquer the whole market faster and can earn extra money without investing any.
Patents are an important part of the commercial value of a technology company. Patents offer value to a company because:
Sometimes, an idea or technology is developed which can't be used at the time of the invention, because other technologies are not mature enough but are needed for a product, the market is not ready to adopt the technology, or laws and regulations must be changed to introduce or sell a new product. In this case we can file a patent to protect our business for the future. If the circumstances change and the product is launched, one can have a legitimate monopoly from our old patent.
The holder of patent gets many benefits if holder patents the invention. The act of patenting gives legal right to the patentee to exclude others from using the invention. The sole right vests with the patentee to exploit the invention.
Considering the economic and commercial point of view, patenting helps the start-ups to grow. If we look at previous research, it can be seen that the firm value increases with the number of patents.
With competition tightening across the globe, there have been bigger and bigger initiatives by companies and organisations to protect their products and assets from the prying eyes of their competitors. In the past, physical assets have been the priority, but nowadays the prime focus is also on the protection of the ideas i.e. intellectual property. Intellectual property is an invisible asset which when utilised intelligently has been known to bring back companies from the verge of bankruptcy to market leaders. This is why intellectual property has become an integral part of companies which not just want to mint money but want to grow so that they leave a legacy for well into the future.
Read our Ultimate Guide to Intellectual Property if this applies to your business.