The BizFilings blog covering business tips and trends.
The Big Question: To Patent or Not to Patent
Published on Apr 30, 2013
Some entrepreneurs may not see it, but a patent is essentially a business asset and can dramatically increase your company's value.
Some entrepreneurs may not really see it like this, but a patent is essentially a business asset and can dramatically increase the value of your company. This is an asset which gives you, the business owner, the right to hold, sell or license an invention or process. But even before deciding what to do with a patent, it is important to decide whether it makes more sense to your business to patent or not to patent.
Possibly the most important benefit of a patent is that it gives entrepreneurs the time to actually bring their idea and/or product to market. By law, your rights to that product or process will be protected against others who might try to duplicate your idea. This would be most important if you are actually planning on manufacturing and selling the item or even potentially, valuating your company.
Another excellent benefit of a patent is that it can be strong leverage in negotiations if you are planning on licensing or even outright selling the idea or invention. For example, with a patent in place, a company would be more willing to deal with you, knowing that their legal costs will be reduced.
However, a disadvantage to having a patent is that it must be enforced. No one will send an email notifying you that someone is violating your patent, unless you have gone to the time and substantial expense of retaining a patent attorney. In other words, the entrepreneur is entirely accountable and must “police” your invention.
Additionally, what happens if you find someone trying to copy your idea or invention? Then you would need to invest time and money into its defense, without having enough actual evidence to know that it will be profitable. Unfortunately, if someone really wants to copy your idea, they will. A patent is very specific, so the essence of your idea or invention may be imitated in a fashion which is very similar but without actually violating the patent protection.
Considering the pros and cons of pursuing a patent, instead of going through the entire patent process, which can be very costly and time-consuming, you may wish to consider another approach. It may be easier and more cost effective to simply obtain a provisional patent, which gives entrepreneurs 12 months before making the decision to put forward the final patent application. The main advantage to this approach is that business owners gain the flexibility and time to test out their invention at much less expense.
Ultimately, every entrepreneur and business owner will be faced with a patent decision. A good case can be made in either direction, but many entrepreneurs forget that all patent choices should be a pure business decision. For example, when it comes to patents, entrepreneurs should always consider the following:
How valuable the idea is from a business opportunity standpoint?
Who is the target audience?
What does this audience need?
Who is the competition ?
What is the market size?
What is the profit potential?
How fast can you go to market?
Clearly, the decision of whether to patent or not to patent is not easy and should be based on solid business considerations and not just personal opinions or feelings. Everyone dreams about patenting the next pet rock, making a few million and riding off into the sunset. With these guidelines, answering this big question should hopefully reduce stress and be an easier process.