Properly deployed, IP and intangible asset strategy is the not so secret weapon for capturing business value
IP and intangible asset strategies are a critical feature of ALL businesses regardless of size, product or customer. But why? Put simply, leaders need to be comfortable that their companies have the mechanisms in place to capture the value that you see possible from the venture. Without foresight and action, other businesses will be able to capitalize on the first/early mover’s advantage.
This happens often when a US company develops a new product, as well as the market for the product, and ex-US companies come in with a lower priced product to take the market away from the first mover. I have also seen customers (that is, big box or other consumer facing retailers) actually instigate the knock-offs: when the first mover demonstrates that a market exists for a product, the retailer will reach out to an Asian manufacturer to create a private label product with the same consumer benefits as that of the innovator’s product. The retailer is motivated to do this because it can gather all of the profit margin associated with a successful product, instead of having to share the proceeds with its supplier. If the innovator does not have some form of legally enforceable protection, such action is not only legal, it makes good business sense for the retailer.
Sometimes (but not as often as people think), patents are the strong way for the innovator to capture value in the long term. Other times, we look at alternate forms of IP and intangible assets like trademarks/branding, contracts, employee incentives etc. In the product example above, effective patent protection that prevented or greatly restricted the retailer from making an non-infringing alternative would have likely done the trick because in a cost benefit analysis, the retailer would see reduced profit margins for the product as preferable to the costs of redesign and/or patent litigation.
However, patents are not the only source of protection for product innovators like those in my example. If the innovator had a supply or other form of contractual agreement in place, it would have been more difficult for the retailer to outsource to an alternative manufacturer even in the absence of strong patent protection for the innovative product. Although not many patent lawyers would admit to this, it is far less costly and complex to litigate a contract claim than a patent. It follows that a strong and enforceable supplier contract may be a preferable form of intangible asset protection if the goal is to capture first mover advantage found in strong product placement in a retail environment. Continue reading →
Google Changes the Game Again–This Time for Patent Owners and Those Who Serve Them
When used correctly, Google’s tool can help “democratize” the patent analysis process by putting more power in the hands of those who are not part of the closed “guild” of patent professionals. For example, before spending money on a search (and the opinion that most patent professionals will insist on writing to put context to the search), an inventor can herself get a feel for not just the patentability of her invention, but also how broad the claims will likely be and how easy or difficult (e.g, expensive) it might be to obtain a patent given the amount of prior art cited by Google.
Of course, the inventor can ask the patent attorney these same questions, but asking someone who makes her living writing patents if it makes sense to file a patent application is a bit like “the fox guarding the henhouse,” n’est-ce pas? I liken this new Google tool to a home improvement show on HGTV–I am never going to build an addition to my house on my own, but having access to professional-grade advice certainly allows me to ask better questions to my contractor and, perhaps, possess a stronger BS detector than I would have without being able to first conduct some self-learning to ground my go-forward actions in the face of “expert” opinion.
While Google ostensibly created this tool to help find prior art (e.g., to invalidate actual or potential patent claims), Patrick correctly notes that this product can also be used to help identify those who might be playing in the same space that is covered by another’s patent. The new Google patent search can provide the owner of an existing patent with insight as to whether another person or company might be building on technology that first appeared in her patent. This could illuminate whether potential licensees and/or infringers exist, an inquiry which to date has typically been one big question mark except for circumstances of obvious marketplace infringement or for entities with sufficient resources to pay a team of patent professionals to conduct the requisite investigation.
A word of caution, however. As detailed in this blog post from 2008, analysis of patent claims is not a trivial process. Before any patent owner acts on a belief that another party is infringing on her patent, it is imperative that an experienced patent lawyer be contacted so as to ensure that one does not end up in a declaratory judgment lawsuit as a defendant. Google’s tool can thus serve only as a signal of potential infringing activity, but I have no doubt that this new product will serve as yet another disruption to the patent profession. And, that is a good thing.
* Yes, Google has had a patent searching tool for sometime, however, I have found it fairly difficult to use–perhaps because it was built without reference to the parts and content of patents. When clients came to me with patent search results from Google, it was ALWAYS the case that a search of “real” patent databases turned up wholly different results. With the emphasis now on patent claims–and the ongoing partnership with the USPTO referenced above, I strongly expect the quality of Google’s patent search to now be improved. The addition of European in a search with US patents will also be a plus (however, I have always liked the search quality of the European Patent Office’s tool for searching ex-US documents).
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