I am often asked when patent protection should be sought. There are many variables to consider in determining the answer to this question, including:
- What are your commercial goals
- How do your competitors respond to patents
- Do your stakeholders (e.g. investors) care
- Is it likely that your invention qualifies for a patent
- Does it fit into your budget.
Here are what I think are the most important considerations in increasing order of importance.
Number 5 – Patent validity. Surprisingly, in my experience the least important of these is the last, legal, question – is it likely that your invention qualifies for a patent. It may be easy to rule out some inventions as being inherently not patentable (e.g. recipes, information, mathematical concepts, inventions that are not new). But in most cases the question of patentability is subjective and can be argued. Even if it is eventually discovered that a patent can’t be granted, in the meantime it’s often worthwhile just having a patent application because it may satisfy other commercial needs. Performing more than a preliminary patent validity investigation may not be productive.
Number 4 – Cost. Patents can be expensive, however their cost can be keep proportional and reasonable. Useful outcomes can be had with modest budgets. The cost of not having a patent may greatly exceed the amount of money spent on them. Don’t make the mistake of thinking that patents are too expensive. At the same time, being overly ambitious with patent scope and global coverage can be a significant drag on a business.
Number 3 – Industry behaviour. When people first become interested in filing a patent they believe that stopping competitors is the primary reason. I’m often not of the view that stopping competitors is the most important reason to seek a patent – satisfying stakeholders by filing one or more patent applications is often more important for business survival and growth, for example. Once businesses become bigger and successful, however, imitation can be a problem. In some industries, competitors have an eye on each other’s patent portfolios and try to avoid patents where possible. If you are in one of these industries, then patents can provide a powerful commercial advantage. Other industries (for example industries involving the mass production of commodities sold by many vendors via eBay), may take a more cavalier approach. It’s best to know how the patent game is played in your industry.
Number 2 – Stakeholders. For many smaller and growing businesses, stakeholders are critical. Many businesses have investors or research partners. Stakeholders may place great weight on patents. Investor returns are maximised if it is hard to reproduce the business the investor has invested in. Many investors, particularly for higher risk projects, will not invest unless there is some form of barrier to competitors. A patent can be a significant barrier, and are generally a prerequisite for some types of government funding mechanisms. Research partners are also a type of investor, although they are investing in a joint outcome rather than in each other. Research partners also want to know that there are barriers against competitors. Patents also provide something for a research partner to license to the other, and form the basis of a trade or exchange that may underpin the research partnership.
Number 1 – Commercial goals. Patent protection should only be sort when it supports your commercial goals. While easy to state, it is rare to find a company that has well-articulated and thought through commercial reasons to seek a patent or not. Every company has different commercial goals, so it’s hard to be specific without knowing more about your business. I can state, however, that unless you have a well thought out commercial plan, it’s going to be impossible to work out whether you should file a patent application. Your first task when determining whether to seek patent protection is to think hard about your commercial goals, how you’re going to get there and then write them down, preferably in detail and with specifics. Your second task is to define what the invention is – write it down. Once you have well thought out statements of your commercial goals, what the invention is, and how the invention fits in with your commercial goals, it’s going to be much easier to consider whether patent protection is appropriate.