ORIGINALLY POSTED MAY 10, 2005 BY kURT P. LEYENDECKER
A few weeks ago I posted an entry concerning controlling your IP. This entry pertains to protecting your IP.
PATENTS
By obtaining patents for your inventions, you can prevent others from making, using or selling them. Inventions aren’t just mechanical or electronic devices, but include methods as well. Under the current laws, methods of doing business can be patented and computer software can be patented. Simply anything under the sun made by man can be patented so long as it is “useful”. And usefulness is measured very broadening. For instance games and novelty items primarily for amusement purposes are typically patentable.
What does a patent do for you? Simply, it gives you the right to make, sell and/or use your invention as defined by the patent’s claims. If the coverage provided by the patent is of sufficient breadth, it can impart a significant competitive advantage to its owner or a licensee of the patent.
individuals should only patent those inventions that can be protected broadly enough such that the patent cannot be easily designed around. This way if the individual goes into production of his/her product, the competition (especially those with deep pockets) cannot make a competing product that undercuts your efforts. Patents are often the great equalizer for startups over their well heeled competition. And if the intent is to license the invention to a company already in a particular industry and generate a royalty from the license, a company typically will not license a patent if its competition can easily design around the patent, because such a situation would put the company at a disadvantage relative to the competition to the extent of the royalty it must pay the patent owner. However, if the patent is both sufficiently strong and broad, a company licensing the patent can afford to charge more than the amount of the royalty since the competition cannot make, use or sell an invention similar to that covered by the patent.
One thing for the inventor to always keep in mind when pursuing patent protection is that patent applications are not commodity items. Going for the cheapest patent application will usually get you what you pay for. If you truly want a patent that is strong and hard to get around shop carefully and consider things other than price. What is more expensive in the long run: (1) a patent that ultimately costs $10,000 and generates a regular royalty income from being licensed to a company; or (2) a $5,000 patent that hangs on your wall but won’t licensed because it was too easy to design around the patent? I can easily draft patent applications for $2000-2500 as some of my online competition by cutting corners, BUT I won’t because the resulting product will not be something I am proud of. Our firm offers quality and value and we believe we could deliver neither if the proper amount of time is not spent preparing your patent application. It really is that simple.
Companies should be concerned with all of the factors discussed above for individuals, but other factors should also enter into their patent strategy. Specifically, many if not most companies that make and sell potentially patentable products or services would be best served by pursuing a patent portfolio instead of a single patent. The reason is simple: more patents are more difficult for your competition to design around. Accordingly, any one patent may not be extremely broad or strong but in combination with a number of others, the portfolio will be a formidable obstacle for your competition. While the costs of pursuing a patent portfolio strategy can be expensive, the benefits in terms of your competitive advantage in the marketplace will often more than makeup for the expense especially when your product or product line is generating hundreds of thousands to millions of dollars in annual revenue.
Another advantage of a patent portfolio is that it may make you less susceptible to being sued by a competitor for violating one of their patents. This strategy is employed by many of the larger high tech companies such as IBM, Microsoft and Intel. Consider what would happen if your competitor accused you of infringing one of their patents, perhaps a patent you did not know they had: (1) if your company has its own portfolio, you could examine the accuser’s product line and hopefully find one or two patents of your they might be infringing and the two of you could sit down and cross license the respective patents to each other and avoid an expensive litigation; or (2) if your company does not have a patent portfolio to assert defensively against the accusing company, you will either have to settle with the accuser or litigate.
Wow, this entry is getting a bit long and I haven’t even got to Trademarks. Well that will have to wait until Part III.
