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 do their larger corporate counterparts, meaning that the low return on investment from patents is often exacerbated for smaller businesses.
In order really know whether they need a patent to capture the value of their validated business model, entrepreneurs require a better understanding of how patents and patent information can be integrated as part of one’s overall business strategy. Of course, this means that these entrepreneurs must expend the time and effort to learn the basics of the somewhat arcane and opaque world of patents. In other words, you don’t become fit just by hiring a personal trainer, just as you don’t create patent value by hiring an attorney to obtain a patent for you. You have to do the work to create and realize the value to get the results that matter to you. Certainly, it would be more helpful if experts like myself were better able to explain patents in ways that didn’t make most entrepreneurs immediately want to fall fast asleep. But the use of seemingly unintelligible language by patent attorneys is no excuse for entrepreneurs failing to step up and understand whether and to what extent patents will (or will not) make it “cheaper for competitors to go through you than around you.”
So, be forewarned–asking a patent attorney if a patent is the right thing to do is a bit like “having the fox guard the hen house.” The mere posing of the question often starts entrepreneurs down a path of patent action that is difficult to undo, especially in the face of expert opinion validating such action. At a minimum, the failure to hold enough knowledge to assess the appropriateness of patents in your situation will lead to second guessing and confusion that wastes your entrepreneurial resources. It is therefore incumbent on entrepreneurs like yourself to better understand in general how patents and IP can be leveraged to create (or not) business value. Only when you are armed with this basic knowledge can you be sure that a patent is the right thing for both your attorney and your company.
I will continue to write about IP and patent strategies in future posts here at my IP Asset Maximizer Blog where I have been writing about creating winning IP strategies since 2008. For those interested in topics specific to startups, you can visit my author page at Hypepotamus.com.