Who Needs a Patent?

My response to the question posed in the title of this post is typically: “the only person who needs a patent is a patent attorney.” Indeed, if a patent attorney fails to convince clients like you that they need to obtain a patent, she will quickly lose her livelihood. You should therefore be skeptical if a patent attorney recommends that you move forward with a patent without also advising you to first fully evaluate your business model, your go-to-market strategy and the competitive landscape and determining along with you how the available patent protection may allow you to realize your company’s revenue and exit goals. This is not to say that patents are never the right thing or even often the right thing for entrepreneurs. To the contrary, examples abound for companies where patents served as a primary means of value creation. Studies nonetheless show that only a small percentage of patents become valuable business assets, even when the filers are sophisticated companies with large patent portfolios that retain expert internal staffs to manage their IP strategies. This reveals that most companies miss the mark when it comes to protecting their innovations using patents. Moreover, early stage companies pay 3 times or more for patents than Continue Reading →

Strategic Patenting Part 3: Why (Almost) Every Innovator Fails to Maximize Patent Value

The Take Away:  Those seeking to generate market-making patent coverage for new innovations must recognize that patent coverage should focus not on how the problem is solved but instead on the benefits provided to the customer.  Most patent coverage is directed to a specific solution to a customer need that is characterized in the form of an invention.  Patents that cover only one solution to a broad customer need will permit competitors to solve the same customer need with a non-infringing substitute product, thus leaving the patent holder with no legal recourse against their competitor.  On the other hand, market-making patent coverage focuses on the benefits provided to the customer, which means that competitors cannot sell the same benefit.  Accordingly, patent coverage that emphasizes benefits over features will make it more difficult for competitors to provide the same solution to the customer.  Innovators must heed this warning or they will end up being one of the many examples of companies that innovated to successfully solve a consumer need but that did not successfully prevent others from competing in the same market. The Long Story:  As I discussed in a previous post in this multi-part series on Strategic Patenting, those of us 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 →

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.) [slideshare id=29609113&doc=huttergoodbaduglyipstrategypresentationoctober2013-140101073032-phpapp02] 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.  Additionally, commonly overlooked forms of intangible asset business value are highlighted.  A case study of a poorly designed and executed IP protection strategy where a significant (and arguably disruptive) innovation is highlighted. Recommendations for business relevant IP and patent protection strategies to create and maximize business value Continue Reading →

A Branding Lesson for the Lean Startup Entrepreneur

I recently spoke to 2 different startup entrepreneurs who explained to me that each had “a brand that needed protecting.”  To each, this meant that they intended to focus their sales and marketing efforts on customers who fit image they saw as befitting their respective products.  While I was intrigued by the products and the amount of work each had done to date, I am afraid to say that if these entrepreneurs stay with their present mindset that only certain customers are desirable, each will fail.  Full stop. For one of these entrepreneurs whose product had already launched, brand protection meant that he was trying to dissuade “undesirable” customers:  apparently truck drivers LOVED his product and it was flying off the shelves at C-stores in which the test launch was conducted.  This entrepreneur perceived these sales as a huge problem because he saw his product as high end and “above” the truck driver market.  Indeed, in its marketing collateral and packaging the product was presented as high quality and upscale.  When placed in front of customers, however, it was apparent that the upscale buyer to whom the product was directed showed little interest, but that less affluent consumers—here truck drivers—found 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 →

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 which were paid to me in my former life as a patent attorney).  Moreover, if we were to track the number of patents held by successful startups and those held by failed startups,  a poor correlation would certainly exist between successful exits and the presence of IP protection.  An adherent to Continue Reading →

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 the vantage point of an entrepreneur, not as a lawyer whose business model centers on patents.  My viewpoint has been further honed in the last year as I have become a practitioner of the Lean Startup Methodology, a startup business framework that, in short, states that if an 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 →

A Startup Company’s Experiences with Open Innovation-Part 1: Dealing with a Large Company Having Small Innovation Goals

For the past several months, I have been at the helm of Evgentech, a startup company with game-changing battery charging methodology.  Our technology was developed by young men who did not come from a traditional engineering background and, even then, their discovery was a serendipitous result of the co-founders’ recognition of a new principle stemming from investigations initially directed toward something wholly different from battery charging.  Put simply, Evgentech’s technology would not have been found if anyone–outsider or not–would have been looking for it.  We are now bringing to market the first truly new battery charging paradigm in over 100 years.  To put things in perspective, with Evgentech’s technology, you will be able to charge your batteries in a fraction of the time possible with existing battery charging methodologies, which means you can charge your iPhone to “full” in as little as 20 minutes, as compared to the about 3-5 hours it takes today.  Moreover, our technology is scalable to large format batteries, as well as a wide range of battery chemistries. Not surprisingly, when companies with footprints in battery power find out about us, they are interested in finding out more.  We have recently begun preliminary discussions with a number Continue Reading →