Every business owner, innovator, and inventor knows the importance of securing patents to protect their ideas. And while that is an important factor in patent ownership, there are other business benefits that make it more than worth the time and effort required for a patent application.
The Power of Patents
Excluding competitors from your market may seem to be the ultimate power of patents. However, there are other reasons why a patent will help improve business. There are four aspects of patent value that make them useful as business tools. These aspects are strategic, defensive, offensive, and leadership. The strength of these aspects can make your company attractive to investors and be an indication of the potential for future growth.
1. Strategic
A patent plays a strategic role in the growth of your business by improving your negotiating position. If you have patented your next great idea, thereby limiting competitors, you have better and stronger arguments for investment with venture capitalists. Likewise a patent helps you make better deals with an IPO or mergers or acquisitions. If you need to partner with another company you’re in a stronger position for cross-licensing and contract negotiations. It’s always a good idea to discuss the effect of patents on strategic business planning with a patent attorney Utah.
2. Defensive
Obtaining a patent has the immediate benefit of deterring others from copying your ideas. In theory this gives your business time to develop the product further without the concern of potential infringement. In reality, it can take a few years from the filing date until the patent becomes enforceable. In today’s highly interwoven, global market, it is crucial to understand exactly what your patent will protect and whether that patent can be used to open doors to collaboration and partnering.
3. Offensive
The offensive aspect of patents is perhaps the best well known. With a patent in your pocket you can establish a monopoly, at least for a time. You can protect your market with litigation, if necessary. Most importantly for your company’s bottom line, you can generate revenues from patent licensing. This lets you transfer patent rights to another company that may use it to develop a product or service.
If you opt for exclusive licensing, you, as the patent owner, will transfer all the ownership rights to the other company. With non-exclusive licensing, you, as the patent owner, can still produce products or services in addition to the other company. Either choice can provide a strong income stream for your business. Before signing any licensing rights, be sure to discuss the options with a patent attorney.
4. Leadership
Owning one or more patents helps your business assume a leadership position in the industry. A strong patent portfolio lets your company have the top position in a merger discussion. It also establishes your company as a key player in the innovation culture. As technology increases its reach into all aspects of business, growth, and development, ownership of that technology becomes ever more important.
Businesses that are able to position themselves as leaders in their field have easier access to greater amounts of funding. They are sought out for more collaborative options, such as licensing and access to third-party technology. They can also more easily pursue joint development projects with other companies. There can be confusion and concern about building upon open-source software or platforms. Consulting with a patent attorney before beginning the application will save time in these situations.
Obtaining patents is typically a time-consuming task that requires diligence and effort. Many businesses don’t pursue their patent options for those reasons. However, with a patent attorney by your side, applying for and receiving patents is an important part of developing your business. Having a patent portfolio will increase your company’s standing in your industry, invite greater amounts of funding and investment, and open doors for successful collaboration. Patent ownership is good for business.
