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Want to Obtain Patents to Protect You from Competitors Knocking Off Your Innovative Products or Technology? It’s Easy-Don’t Be "Selfish"

Recently the CEO of a start-up asked me for the most important advice I could give before she filed a patent application directed toward protecting her company's core technology. In response, I said "don't be a selfish patent applicant." Few patent applicants obtain such counsel from their advisers and it shows: the vast majority of patents are written from a selfish perspective. (Note that I am using "selfish," in the context that the term is used in marketing i.e., thinking that others see the same things in your product or technology as you do. When one selfishly markets her product or technology, she assumes that others will buy it for the benefits she sees, not for the reasons upon which consumers will base their purchasing decisions. So when I say that most patents are written "selfishly," I mean that applicants (both individual and corporate inventors alike) approach the patenting process with

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Why Does Your Company Fail to Treat IP Asset a Corporate Asset? A New Article Proposes Organizational Behavior as the Problem

While we can argue about the exact amount, without question, intangible assets form the majority of corporate value today. Matters involving IP are therefore predominately business issues, as opposed to legal issues or technical issues. For example, IP in the form of patents or trademarks (or both) frequently serves as a basis of the premium pricing that can be obtained from a differentiated product line. Also, IP directed toward a competitor's technology can legally limit the ability of a competitor to expand its offerings, thus decreasing its ability to compete. There are many other examples of the business value of IP, all which when strategically obtained and managed can greatly increase the overall financial position of the corporation using IP as a business tool. Notwithstanding the substantial dollars associated with corporate IP decisions, most organizations leave questions of IP in the hands of their legal and technical teams. Of course, many

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Innovative Methods for Corporate Legal Managers to Reduce IP Counsel Costs

The Slideshare presentation that follows is an excerpt from a class that I am teaching to in-house legal managers about innovations in IP management. The topic of the presentation is innovative methods to reduce IP legal procurement and management costs. The goal of my presentation is not to get corporate IP types not to think outside the box but, rather, to think outside the truck the box came in. As such, many people may think these ideas are "way out," but if you start with small ideas, you end up with small improvements.

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The "Dirty Little Secret of Patents" is that Most are Worthless to Their Owners. Here is Why.

Notwithstanding the vast corporate and entrepreneurial resources expended each year to file, prosecute, manage and maintain patents, a significant majority end up having little or no business value to their owners. Patents can end up being worthless for any number of reasons, most of which center on the fact that the claims do not cover a product or technology either currently or in the future being made, used or sold by either the owner or a third party. And, when a patent does not cover a current or future product or technology, one might argue its only residual value is as the attractive government document on the right. No doubt exceptions exist to my bold assertion that most patents end up as worthless to their owners. That is why I used the

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Entrepreneurs: Ask 2 Simple Questions to Determine Whether IP Strategy is Critical to Your New Business Venture

Intellectual property ("IP") is often a subject that is "out of sight, out of mind" for entrepreneurs who are launching new business ventures. And, why shouldn't it be: business schools rarely teach much about law in general, let alone about the highly specialized world of IP law. Since non-business school trained entrepreneurs generally take their cues from the methods of their colleagues, it follows that a significant majority of entrepreneurs likely do not consider IP to comprise a necessary step when they are formulating their business plans. My conversations with entrepreneurs from all backgrounds over the years bears this out. When IP does form a fundamental basis of an entrepreneur's new venture, it is likely because scientific or technical subject matter forms the basis of the business. In this context, it makes sense that the scientific or technical core of the business model must be protected by seeking patent coverage. While

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How a Patent Strategy Focused Only on Obtaining the Lowest Cost Patents May Reveal a Company’s Future Inability to Remain Viable

Commentators like me frequently rail against what we view as the often unnecessarily high cost of obtaining patent protection. In truth, many patents are overpriced and provide questionable business value to their clients. Over-priced patents do not form the basis of this article, however. Instead, this is about the opposite phenomenon, i.e., under-priced patents. Specifically, in this article, I describe a company's desire to obtain low cost patents and what such a patent strategy may reveal about its long term viability. I was recently contacted by a large printer manufacturer ("PrinterCo" for the purposes of this discussion) to see whether I was interested in preparing patent applications for the price of $1300 each. This price seemed somewhat ridiculous to me because even the most "bargain basement" patent preparation prices that pop up on my Google sidebar advertising do not seem to dip beneath a threshold level of $2800. And, as a

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A Consumer Product Company’s Costly Patent Lesson: It’s Not Enough to Protect the Invention, the Innovation Must Also be Patented

A SVP at a large consumer products company recently expressed frustration that he cannot bring a patent infringement lawsuit even when his company holds 18 US patents (and many other foreign patents) on a product that closely resembles a competitor's product. His annoyance is compounded because his company spent several years developing the product and technology covered by the patents. His company also spent several $MM introducing the product, which turned out to be a failure. The company removed the product from the market after several months, but the many patents remain in the portfolio today, and are still being maintained at considerable expense. I estimate that the patent protection for this failed product cost as much as $500K for patent coverage worldwide. Significantly, the product did not fail due to quality or performance issues. Rather, it failed because it was over-engineered and used many expensive ingredients, a fact which made

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How Asking One Fundamental Business Question Can Reduce Expense and Improve Business Outcome of Patent Litigation

While a majority of companies consider the cost of obtaining patent protection an essential element of the product and technology development process, few of these same organizations favor the prospect of asserting their patent rights against potential infringers. Moreover, no company relishes the prospect of being a defendant in a patent lawsuit. That most do not readily welcome patent litigation is not surprising given that the average cost of large case (i.e., over $25 MM at stake) patent litigation through trial in 2007 was about $5MM per party in 2007. For disposition of smaller cases, the total amount per party was about $1MM in 2004 dollars. Why does it cost so much for a patent owner to assert her patent rights against an alleged infringer? Put simply, patent litigation at its core is an adversarial undertaking in which lawyers typically define the meaning of a successful outcome. In this context,

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Confessions of a "Recovering Patent Attorney" and Why I Have Joined the Growing Ranks of IP Strategists

I often facetiously refer to myself as a "recovering patent attorney." This somewhat tongue-in-cheek phrase seems appropriate to my present professional state of mind because, after many years of drafting and prosecuting patents for clients of all sizes and degrees of sophistication, in the end, I became disillusioned with the way the patent business traditionally operates. Too often, I found that the patents I worked so hard (and was paid handsomely) to obtain failed to serve my client's business needs. In searching for the source of the disconnect between my efforts, the client's expenditures and the ultimate value of the patent to my client's business, I realized that those responsible for the client's business often did not participate adequately in the patenting process. Instead, at many organizations, inventors and patent attorneys served as the gatekeepers for most patent decisions. While the relevant client business unit typically held some say in patenting

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The US Patent Office’s Impending Financial Crisis and What Sort of Disruptive Innovations Might be Seen as a Result

My postings have been light for the past few weeks because of the Holidays. I plan on re-posting regular content after the New Year. Nonetheless, I couldn't help posting something this week during my vacation after coming across this wonderful analysis of recent patent issuances post-KSR from Matt Buchanan of the Promote the Progress website and blog. Matt's analysis of PTO issuances over the past several years shows that KSR definitely had an effect on the number of patents issued in the last year. What is obvious from Matt's 2008 issuance data is the fact that the PTO experienced a significant decline in revenue over the past year due to the reduction in issue fees paid by successful patentees. Moreover, this revenue decline will certainly be felt over the next 10 plus years as a result of a reduction in maintenance fees that would have been

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