start-up business strategy 4 - IP Asset Maximizer Blog

9 Out of 10 Patents are Probably Worthless: Why and How to Prevent this from Happening to You (Part 1 of 4)

January 2, 2010January 2, 2010 by Jackie Hutter, IP Strategist 5

I decided to start 2010 with a controversial premise: what if 9 out of 1o patents--or 90 %-- issued in the US were worthless? Believe it or not, but this probably is not too far off the mark. By "worthless," I mean that it is likely that only 10% of patents in force today meet each (and every) of the below criteria:

1) The patent directly or indirectly protects a product or technology that is being sold in the market today;

2) The patent covers a product or technology where there is or likely will be viable competition in the marketplace such that a patent is needed to legally restrain competition; and

3) The patent owner is ready, willing and able to bring a patent infringement suit against an infringer or it is likely that your competitor believes that it will possibly do so.

Unless

The NY Times is Wrong: Patent Auctions Do Not Provide Indendent Inventors with “Protection”

September 21, 2009September 22, 2009 by Jackie Hutter, IP Strategist 10

: Patent auctions will do little to help independent inventors sell their patents

Those seeking ways to generate revenue from their patentable ideas will find the recent NY Times article entitled "Patent Auctions Provide Protections for Inventors," written by Steve Lohr, to be an interesting read. However, as someone who works with entrepreneurs and corporations wishing to monetize their patent rights, I find it necessary to comment on the assertion that patent auctions can operate to "provide protections" for independent inventors, as well as the underlying premise that these it is generally possible for non-corporate inventors to generate value from their patent rights irrespective of the underlying subject matter of the patents.* As an initial matter, the NY Times article states that "[independent inventors] can often find themselves in court, battling

Start-up Entrepreneurs & CEO’s: If Your Goal is Investment or Acquisition, You are Probably Patenting the Wrong Things

July 3, 2009August 1, 2009 by Jackie Hutter, IP Strategist

Do you treat your patents as a fence or a tollbooth? If you wish for your start-up technology company to obtain investment from or acquisition by a bigger player, you had better understand the difference. Most start-up technology company entrepreneurs and CEO's understand that patents can be key to establishing the value of a new business idea. Typically, entrepreneurs and CEO's such as yourself will engage patent attorneys to build an IP portfolio that protects the start-up's technology and products to the fullest extent possible. The motivation for this effort and expense is, of course, to to protect your start-up's idea from use by others. As management of a start-up you may be seeking to build an ongoing business around the patented technology, but often the goal of building a solid patent portfolio is to make your business an attractive target for investment or acquisition by a larger company. I believe that

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

April 2, 2009August 1, 2009 by Jackie Hutter, IP Strategist 1

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

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

February 13, 2009August 1, 2009 by Jackie Hutter, IP Strategist 2

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

Technology Start-up Entrepreneurs and CEO’s: If Your Goal is Investment or Acquisition by a Big Company, You are Probably Patenting the Wrong Things

August 2, 2008August 1, 2009 by Jackie Hutter, IP Strategist

Do you treat your patents as a fence or a tollbooth? If you wish for your start-up technology company to obtain investment from or acquisition by a bigger player, you had better understand the difference. Most start-up technology company entrepreneurs and CEO's understand that patents can be key to establishing the value of a new business idea. Typically, entrepreneurs and CEO's such as yourself will engage patent attorneys to build an IP portfolio that protects the start-up's technology and products to the fullest extent possible. The motivation for this effort and expense is, of course, to to protect your start-up's idea from use by others. As management of a start-up you may be seeking to build an ongoing business around the patented technology, but often the goal of building a solid patent portfolio is to make your business an attractive target for investment or acquisition by a larger company. As an intellectual

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