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"
Strategic Patenting Part 1: Why So Few Patents Create Real Value
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
Presentation: IP and Patent Strategy for Business Value Creation–The Good, The Bad and The Ugly
While postings have not been frequent in 2013, I have nonetheless been very busy with my IP Strategy counseling and speaking engagements. In 2014, I will commit to being much more diligent in updating my blog with relevant content for those seeking to use IP and intangible asset strategy to create and maximize business value. In the meantime, here is the deck from IP Strategy Overview I presented at a conference of innovators at Georgia Tech's College of Architecture in October 2013. The summary is below the presentation. (To view the Slideshare presentation you view the full post in IP Asset Maximizer Blog.) This deck includes the basic overview of IP (patents, copyrights, trademarks, trade secrets). However, this presentation goes beyond the usual lawyer-generated content to highlight not only the positive business aspects of IP, but also to give a reality check as to the likely ROI of investment in protection.
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
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
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,
Is Traction the New IP for Startups? Maybe Not for Yours.
"Traction is the new IP." This emerging mantra results in many startup CEOs eschewing the traditional path of patent and other forms of IP protection. While I am aware of no rigorous studies conducted to date, anecdotal information indicates that startup entrepreneurs are increasingly saying no to patents, and likely to other forms of IP. Instead, these entrepreneurs first seek to validate their business models and then follow business plans focused on generating recurring revenue, often avoiding altogether the step of protecting their business idea or product with IP. From my own interactions with startup CEO's, I can confirm that the pendulum has swung very far to the "IP is worthless" side of things. But, is this emerging conventional wisdom actually correct? There is no doubt that over the years far too many startup company resources have been spent on patents and other forms of IP protection (many of
Do Patents Matter? Lean Startups Should Ignore Expert Advice and Let Their Data Drive Patenting Decisions
Many hold strong opinions on the value of patents to business. Both in person and online, there are any number of "experts" who stridently insist that without patent protection, a company's business goals are doomed. With about 350,000 new patent applications filed in 2012, there is no question that many agree that patents create, and are even critical to, business value. But, as the 2012 US presidential election cycle demonstrated, actual data can illuminate how expensive experts are often flat out wrong. So where's the "real data" that will allow business people to know whether a patent is the right decision for their company? This information is likely even more critical for startup entrepreneurs, most of whom have no choice but to rely on self-interested expert opinion regarding the value of patents to their business.
Entrepreneurs who follow
Lean Startup Methodology: How Patenting Decisions Fit into this New Business Framework
One of the first questions start up entrepreneurs usually ask sounds something like this: “Is it worth the effort and expense to get a patent on this business idea?” In countless conversations with clients in my years as a patent attorney, I could usually articulate multiple reasons why the person seeking to to start a new business venture unequivocally needed to file a patent application as soon as possible. Moreover, I could recite a litany of ills that could follow from failing to follow my advice. Following this conversation, I could typically expect a fat check from the client, whereupon I would dutifully draft strong patent on the subject invention. It was a nice living. These days, I work as a startup technology company CEO and look at patents much differently than I did in the past: as a consumer of patent services myself, I now examine patenting issues from
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