Money flying out window
NOTE TO READERS: Since I am on vacation this week (well, sort of), I have asked my friend Scott Garrison to pen a piece about IP Strategy for me. He has been so gracious to do so, and the post follows. At bit about Scott: Scott Garrison is Chief IP Counsel and Assistant General Counsel for Scientific Games which, among other things, makes scratch off lottery tickets. Prior to joining SciGames, Scott was a senior IP attorney at Kimberly Clark and, prior to that, was a law firm patent attorney. Scott Garrison is a true IP Strategist and I am pleased to present him a forum to express his views on this blog.
Scott’s blog post:
A short while ago I had an interesting conversation with an out of town acquaintance named “Mike” who works at a large international B2B (“business to business”) corporation. I was interested to find out that his opinion was that patent protection was useless in the B2B field. It seems that since his consumer base is much smaller than a B2C (“business to consumer”) business he believes the nature of the business requires deals to be cut and IP is often a nuisance to be worked around.
As we continued to talk I learned that he was the lead inventor on a couple of critical and groundbreaking patents in his field. In fact, it seems that a few years earlier he had been a major shareholder in a relatively small corporation when he received the patent grants. At that time he believed they held great value to his company. As he tells it, his present employer acquired his former company predominantly in order to procure these very same patent rights.
I at first assumed that his opinion was driven by feelings real or imaginary of being slighted by his present employer with respect to these patents for any number of potential reasons. However as we continued our discussion I was shocked to learn what had actually happened. It seems that the company which had bought the patents for the purpose of building value for itself and carving out a niche it could wield against its biggest competitor in fact had inadvertently destroyed the value of the patent family. As we discussed the details the following story unfolded–
In the B2B category where Mike and these companies exist, it was quickly recognized that the patents were a revolutionary and innovative gem. Mike’s current employer, Big Co. did successfully acquire his former company and hence the patents for a sum in the high 7 to low 8 figures. At once Big Co’s patent attorney added them to the company’s patent portfolio and the business leaders began to push the technology onto their customers. Continue reading