Strategic Patenting Part 2: It’s Not Your Patent Attorney’s Job to Get it Right

From the last post, we see that it is very rare for patents to create value for their owners.  Moreover, if the “big guys” with pockets deep enough to hire the best lawyers can get it right only 5% of the time, there should be no doubt that smaller companies and individuals should re-examine the advice they are getting from their IP counsel.  This is not to say that smaller companies and individuals cannot be successful in creating market-defining patent protection.  To the contrary, it is my strong belief that small companies can create solid patent protection at a reasonable cost, but to do so will likely require patentees to recognize that their IP counsel likely has no clue how to do what you need done.  And, even if she does, it is not her job to make you money from your patents.  Instead, her only job is to get you a patent.  Period.  End of story. Smaller organizations or individuals should not assume that that your attorney does not have your best interests in mind when doing patent work on your behalf.  Certainly, the vast majority of patent attorneys are ethical and have their client’s best interests at heart. Continue Reading →

Strategic Patenting Part 1: Why So Few Patents Create Real Value

Many business people are surprised to find out that all patents are not created equal.  A recent study of Fortune 500 companies reported in Suzanne Harrison’s Edison in the Boardroom Revisited indicates that only a very small number of patents–namely, 5%– obtained by these top patent filers created strategic value for their owners.  If only 5% of the most sophisticated companies, all of which have veritable armies of patent professionals on their teams, can get patent protection right, it must follow that less resource-rich companies have an even lower probability of gaining strategically valuable patent protection.  This and the next few blog posts will aim to help improve the odds for business people seeking to learn how to generate more valuable patents. The first issue to clear up is what “strategic patenting” means.  Those of us in the IP Strategy business define a “strategic patent” as one that is “market making.”  In other words, a “strategic patent” is one that effectively prevents a competitor not only from making the same product, but also from playing in the same market space.  When a company holds a strategic patent, the competitor must expend efforts to innovate around the incumbent patent owner, which is, at a minimum, Continue Reading →

Do Startups Need Patents? Rigorous Study Presents Real Data on Startup Company Patenting Behavior

As an IP Strategy advisor, I am often asked by the leadership of startup companies what the return on investment is from patenting.  While I can confidently provide recommendations as an expert, my opinions are anecdotal based on my almost 20 years experience as an IP professional.  Certainly, I have advised a number of startup companies over the years for which comprehensive patent coverage was critical to financial and market success.  On the other hand, I have advised a much larger number of startup companies over the years where patenting made little difference to their fortunes. The subjective nature of IP advice holds for other patent professionals.  Our respective years of experience results in tacit knowledge that becomes “expertise.”   This expertise guides clients to us for advice and allows them to trust in our counsel.   Missing from my knowledge base–as well as that of my IP attorney peers–have been data-driven assessments of whether, when and to what extent patents really matter to start up success. Similarly, startup companies are typically inundated with the advice of peers, mentors and investors about whether patenting is recommended in a particular business situation.  Such non-specialist expertise is even more fraught with subjectivity Continue Reading →

IP and Intangible Asset Strategy: The Easy to Deploy, 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 Continue Reading →

Enhancing Innovation ROI by Adding Patents at the Front End: Some Resources

A new client has asked for some information on how consideration patents and IP at the front end of the innovation/product development process can enhance business value.  Readers of this blog might find this material informative, also. This is a published article from Innovation Management article entitled “How to Improve Innovation ROI with Early Stage Patent Expertise.”  In this article, I discuss how IP can help orient innovation teams in a direction that can enhance value capture.  Practical steps to implement such a program into innovation processes is included in this article. Here is a YouTube video that explains my process simply.  In short, including IP at the front end of a company’s innovation process allows one to enhance their calibration with respect to the IP rights of others to better ensure that they will achieve the desired ROI on innovation investment. This blog post describes how a large company failed to capture the full value of its deep investment in a new product innovation.  These folks (the name has been changed to protect the not-so-innocent) failed to grasp that their innovation was not a product, but a customer solution.  This first-to-market Fortune company did not understand that the customer Continue Reading →

Hey “Patent Experts”: How Do You Like Groupon’s Patent Now? *Crickets*

Yesterday’s announcement of the firing of Groupon’s CEO and the hope for a rebirth of the company’s business model brought to mind a post that I wrote a couple of years ago railing against the self-interested opinions of “patent experts” on why Google offered $6 Billion for Groupon in late 2010.  Re-reading the post in the rear-view mirror, it is more clear than ever that Google made the offer for the precise reason I set out below in December 2010: Google, and other acquirers, buy business models, not patents.  As we strategy-focused IP people have been saying for years, a patent is worthless unless it covers a viable business model–either yours or one you want to own.  Google is interested in Groupon because it offers them an established business model in an area that fits into their long term business strategy.  Are the patents nice to have? Of course, but if Groupon didn’t have the patents, Google would still want to own them, and likely for a price in the same neighborhood as it bid.  At the end of the day, the Google’s offer for Groupon was a “build vs. buy” decision:  Google ran the numbers and believed that it would make more money buying Groupon than by building something Continue Reading →

Patents–Who Needs Them? Not Most Startup Entrepreneurs.

A recent article in TechCrunch indicates that entrepreneurs are less likely to file patents than in the past.   Nonetheless, there remain countless patent lawyers and agents who will argue convincingly that an entrepreneur must obtain a patent in order to succeed and who will take their $5-15K to file a darned good patent application that won’t provide them a bit of business value in the long run. Even worse, the resources expended in the patent process robs the entrepreneur of needed cash that will allow them to gain customers, and of their most valuable asset: time.  But when the only tool you have is a hammer, everything looks like a nail–which is why those still in the business of writing patent applications will continue to make their case to entrepreneurs (and investors) who lack the domain expertise to know better. Now that I no longer make money obtaining patents–instead, I am the CEO of a startup battery charging company–I understand that patents are generally a poor way for a startup company to expend scarce resources.  I rarely, if ever, recommend that my startup colleagues file for patent protection for any tech/web-based ventures. Further, when asked what they should do Continue Reading →

How to Improve your Innovation ROI with Early Stage Patent Expertise: In Depth Management Article

This article, How to Improve your Innovation ROI with Early Stage Patent Expertise,  was published in late 2010 as a pay for download article in Innovation Management Magazine.  It later became free for download, and I can share it with readers in this link.  I hope those responsible for creating value from IP in their organizations can find the insights in this article helpful.  Here is a synopsis: Innovation teams are often removed organizationally from a company’s patent matters. This can mean that corporate innovation processes move forward with little or no consideration of whether competitors can legally “knock off” the resulting consumer offering. Companies may then not attain expected ROI because competitors can legally copy the innovation—be it a product, technology or otherwise—without incurring legal liability. It may not always be necessary to protect innovation efforts with patents, such as where a product has a short shelf-life or where the company may desire to maintain trade secret protection for the technology. However, for innovation endeavors where go-forward financial models assume exclusivity, companies often require patent protection. Also, the absence of patent insights at an early stage frequently means that innovations are not properly scoped for potential infringement risk until significant Continue Reading →

It’s Time for Your R & D Team to Stop Inventing and Start Innovating

In a recent post on his 15 Inno blog, Open Innovation guru Stefan Lindegaard presented the ostensibly nonsensical hypothesis:  R & D leaders are often a “threat” to innovation.  Stefan’s post resulted from an interaction he had with a senior R & D person at a mid-sized tech company, who apparently adhered to the outdated notion that he and his scientists and engineers know more about the company’s business than anyone else could possibly even try to know.  As a result, this R & D leader believes that they cannot maximize (or even create) value for their organization by looking outside the confines of their existing R & D infrastructure to solve the company’s pressing business problems. Reading this, R & D professionals might likely think:  “What’s this guy smoking?  How can R & D be a threat to innovation?!  We’re the reason this company has any innovation at all.  We’re scientists!  Inventors!  Innovators!”  But, unless their companies are consistently experiencing year over year growth coming solely from sales of innovative new products and technology or cost reductions resulting from process innovations, such protestations prove Stefan’s point:  many R & D leaders kill their organization’s ability to innovate due to Continue Reading →

Companies Adopting Open Innovation Must Incorporate Patent Information at the Front End

(Editorial note:  This is a repost from this blog over 2 years ago, but the content is more relevant than ever.  On January 20, 2010, I am participating in a Yet2.com webinar with Ben DuPont and Jason Lye where we will be sharing our thoughts about marketing technology to “non-traditional” technology buyers, many of whom come to the table because they are adopting Open Innovation into their product and technology development processes.  I thought this “classic” post would be a good overview for anyone of my viewpoint for those who find my blog as a result of this event.  For regular readers, well, I hope you enjoy this too.  I will post a link to the recorded webinar when it is available. ) Open Innovation is unquestionably becoming a “hot” area of focus for U.S. companies, especially in the current economic climate in which businesses are more than ever focused on smarter ways of doing business. And, why wouldn’t Open Innovation be an intriguing business model when companies can fill their product and technology pipelines for significantly lower cost and with more variability of ideas than typically is possible from their own R&D infrastructures? As a result, more and more Continue Reading →