Archive for February, 2015

Business Insight – Patents – What Value anyway?

Friday, February 27th, 2015

Patents – what value anyway?
By Roger La Salle

In short, a patent is an instrument of entitlement provided by a government to give an inventor monopoly rights to sell the patented product free from competition in the jurisdiction in which it is granted. Patents generally refer to physical products but patents can also be granted for business processes.

But note, you cannot patent just an idea. For example, I have a wonderful idea that I would like anti-gravity shoes, but I cannot patent this because I don’t know how to do it.

A granted patent can provide up to 20 years of protection, providing annual maintenance fees are paid, or for a lesser grade of patent known as an Innovation Patent, the coverage is eight years.

Should you seek a patent?
One of the biggest mistakes inventors and entrepreneurs make when they have what they believe is a great idea is to patent, patent, patent and seek protection in as many countries as they can afford.

In reality the percentage of patents that actually end up producing “pay dirt” is very small indeed. Unfortunately in many cases inventors spend all their money on patents only to find that in fact nobody wants the products anyway, and/or they are underfunded when it comes to the real and very demanding business of commercialization.

Whilst having a patent may be a great emotional fillip, the real fact is that a patent is only as good as your willingness and ability to defend it. Further, if you really do have a great idea, these days, even if it is patented, you can almost guarantee that soon after you have done the hard work of winning a market, an identical or similar product will soon be there to challenge you.

Most people are unwilling or unable to embark on the expensive and complex legal journey that goes with trying to enforce patent rights. There is an interesting film called “Flash of Genius” about an American inventor, Robert Kearns, and his lifetime battle with the US auto maker giants to enforce his granted patents. This story of trial and heartbreak is truly engaging and although perhaps not rated as a stand out box office success, is well worth seeing.

Finally, one consideration often overlooked with patents is that a published patent discloses all your work and thus allows potential competitors free access to your thinking. In many cases where knowhow and intimate knowledge of a product or process is your competitive edge, it may be better not to patent and trade on the knowhow you prefer to keep secret.

So why bother?
In small vertical niche markets patents can certainly keep potential competitors at bay and may in some cases even make larger companies think twice before deciding to run the infringement gauntlet. In still other cases good corporate citizens may do the right thing and contact a patent owner seeking a licence arrangement.

In the case that your preferred commercialization model is to licence the invention then a patent is all important, as why would anybody pay you a license fee when a competitor could make the identical product free from the encumbrance of paying such a fee?

One way to have your “patent cake and eat it too”, may be to obtain a patent then immediately seek a licensing agreement with a large company that would be prepared to defend it.

Protecting a product, service, design or trade mark on the surface may seem pretty straight forward, in fact the reality is that the subtle nuances of IP registration are far from straightforward.

What now?
1. Seek advice – Many patent attorneys will usually give you brief up front free guidance
2. IP Australia “” has an excellent web site full of information
3. Carefully and frugally select the jurisdictions in which you seek protection
4. Understand that even if patented, a good product will almost certainly attract competition
5. If you do have a good product, seeking a licence agreement with a major company may have a lot of advantages.
6. Remember, few products do actually end up making money for the inventor; this is a very tough business.
7. If knowhow is your competitive edge, then maybe a patent that discloses intimate knowledge may be a disadvantage.

Roger La Salle, is the creator of the “Matrix Thinking”™ technique and is widely sought after as an international speaker on Innovation, Opportunity and business development. He is the author of four books, Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies both in Australian and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panelist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast. Matrix Thinking is now used in more than 26 countries and licensed to Deloitte, one of the world’s largest consulting firms.

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