Sometimes when we have an idea or a way to do business, people forget to protect themselves regarding intellectual property rights. I will like to clarify what a Patent is, why it is important and how to get value out of Patents.
What is a Patent?
A Patent is the exclusive right to benefit from an invention in exchange for making the details of the invention public knowledge.
In order for an invention to be patentable it must satisfy several basic requirements. It must be:
- Patentable subject matter: in the US this includes processes, machines, compositions of matter;
- Novel: some aspect must be different from publicly available ideas, inventions or products;
- Non-obvious: sufficiently different such that is not obvious to someone skilled in the field;
- Useful: functional and provides some industry or real-world benefit.
Intellectual property vs. Patents: Intellectual property (IP) includes many types of innovation or creative activity for which governments will grant exclusive rights. IP includes trade secrets, copyrights, trademarks and patents. IP is a broad category that includes patents.
Patents are Property: Patents, like all intellectual property are just that: property. Although they can’t be touched or held like a car or house they possess monetary value and are owned by an individual or organization. As with tangible property, patents can also be bought, sold and traded.
Why are Patents important?
Keys to business success: ideas and innovation are becoming the foundations for business success. Organizations that own the distinctive parts of their business that create value are better able to serve customers, run more efficiently, and command higher prices for their products.
Level the playing field: Relatively small but innovative companies that develop ground breaking IPs are able to compete with larger more established organizations for revenue and market share. In some cases, the larger organizations are forced to buy or license IP from smaller companies to stay competitive.
Encourage innovation: The legal monopoly inventors get by filing patents gives them an incentive to develop new technology. In addition, because patents make their underlying inventions public knowledge, other inventors are given the opportunity to design around or improve on patented invention.
Provide a competitive edge: Companies that control the innovation in a market get better products to market faster and have higher profit margins.
How do Organizations Get Value from their Patents?
“Whoever owns the IP owns the profits”
Offensive patent strategies:
- Developing technology related to targeted markets (weaken competitors, gain market share);
- Finding infringers and asserting patents (block competitive products and business processes);
- Licensing strong patents to other organizations (generate revenue from other companies).
Defensive patent strategies:
- Protecting products and technology (command higher prices);
- Blocking competitors from market (reduce competition and maintain market share).