As an IP Strategist, I am fascinated by stories from which declining business fortunes can be traced directly to failed patent strategies. Often, the failures can be traced to patent attorney errors that limit the effectiveness of a company's patent to prevent competitive knock-offs, but, often, the problems can be traced to the lack of accountability for IP strategy within an organization. For those companies where IP is a primary driver of competitive advantage, the absence of someone who "owns" the job of making sure IP is properly captured and protected can result in unrecoverable errors that opens the innovator to unwelcome competition. In this regard, the recent loss of patent protection to a popular drug product should serve as a useful case study on why the C-suites of innovative companies should consider strategic in-house IP counseling to be a
The prevailing view of patent experts who advise innovators--be they individuals or companies--it that patent filings should occur as early as possible. This advice, which is even more prevalent now that the US has moved to a "first to file" system, exacerbates the significant problem of worthless patents that I have written about previously. To summarize, by "worthless," I mean that the innovator's patents will not cover anything that consumers desire to buy. Logic thus dictates that patents will be irrelevant to the startup, as well as expensive wastes of time, unless protection aligns with a validated customer demand for the innovator's product or technology. This is where a key difference falls out between the patent filing strategies for established companies and startups where each is developing innovative products or technology. The former already have products in the market and customers that
An IP Strategist like myself spends considerable time "Monday Morning Quarterbacking" patent strategy for medical devices and other inventions for the purposes of valuation, commercialization and otherwise. In this regard, I am frequently asked to review medical device patents to provide my opinion regarding claim coverage in relation to commercialization potential. Most of these reviews indicate that the medical device patent fails to create a scope of protection sufficient to justify the investment needed to fully realize the value of a new market opportunity. Alternatively, I will provide a "freedom to operate" opinion to a competitor that wishes to enter the market with a non-infringing alternative but which nonetheless leverages the key insights that formed the basis of the patented medical device innovation.
To this end, a medical device investor recently engaged me to conduct a preliminary review of a
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
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
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
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.
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
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,
"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